Yes, people in usually bad at understanding negative feedback loops. The current economic crisis reminds me of some of the problems with climate models and global warming; as the earth is warming much faster than anyone anticipated again due to not taking into account negative feedback loops.
I agree that time lags are a huge issue. I’ve said for the last year that October ’08 would be a watershed month for our economy. Why? It was six months past the peak of subprime ARM resets. Ergo, that is about when the shockwave would hit the financial markets. I think many, many folks are going to be deeply surprised at the breadth and depth of the downturn over the next few years.
Re: casual observations.
I’ll disagree. I live in Hillcrest and it seems much less busy than usual for this time of year. Highway traffic also seems light and I park closer to the entrance at CostCo everytime I shop there. Plus they only have a few registers open and I still don’t have to wait long at all.
