Taleb and Me Part 5

I need to be more consistent in 2012 reflecting on readings I consider important and feel a need to share. Let's see if I can be more consistent. only time will tell.

Today I venture into Principle #5 of Taleb's "The Ten Principles for a Black-Swan Robust Society" from the 2nd ed (2010) of his "The Black Swan."

"5. Compensate complexity with simplicity.
Complexity from globalization and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage.  It's the leverage of efficiency.  Adding debt to that system produces wild and dangerous gyrations and provides no room for error.  Complex systems survive thanks to slack and redundancy, not debt and optimization.  Capitalism cannot avoid fads and bubbles.  Equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious."

"Slack and redundancy" mean some wiggle room with my budget or discretionary funds on a month to month basis and some savings or another pot from which to draw in the case of immediate needs.  I often use my credit cards for redundancy at the point of immediacy and pay the card off at the next billing cycle by using the money set aside in savings.  However, I know many people have access to neither for various reasons.  Keeping one's tastes simple and not going with the crowd at every turn helps to stay the course.  However, I've read elsewhere from Taleb and others that my position in life is a matter of luck or as I prefer blessings rather than due to my abilities or talents.  I am very thankful for the luck or blessings and give thanks daily to God and the heavenly hosts for their blessings.

In our house, we have flashlights for a power failure and we have many of them so if the batteries don't work in any of them we have others that we can possibly use. This is redundancy and simple.  We also have extra batteries.  It would probably be better to have flashlights and a generator but we have not done that although I know many who have and have had to use theirs.

We have extra blankets and warm clothing too if the heat should go out as well as dried food if needed for a few days.  We have a landline and cell lines.  We have a radio that runs by being wound up every so many minutes.  So we do have some redundancy and we are fairly simple tho not as simple as we might like to believe.  So maybe that should be a goal for me in this new year to be even more simple in my style of life than last year.  I'll have to reflect on that some more before I begin any simplifying.  Later!