Feedback and Self-Regulation

From p. 75 of Permaculture

The process of attempting to obtain a yield can also create long-term problems. If we have ways of responding to these problems, we can correct or adjust the system to make it more efficient or stable. For instance, if we grow a woodlot to supply our firewood, wasteful use will have an obvious negative impact. If, on the other hand, we buy our firewood, we might never consider how much forest or woodlot is required to provide for our heating. If we get our heating at the flick of a switch and don't pay the real cost of power, then the impacts of our choice will seem remote and abstract.

If we live a typical modern urban lifestyle, where electricity, water, salary and so on arrive in a remote way, it is often hard to know when we are making unacceptable use of or exploiting common resources, whether water supply, peace and quiet, or the honesty of our neighbors.

The above might sound confusing if you're not used to thinking in terms of true costs, and in our society, the true costs are usually hidden in plain view. For example, we pay for coal subsidies with our health since lobbyists have successfully persuaded our government that the coal industry doesn't have any long-term problems that need any kind of response.

This is obfuscation, a splitting of hairs so that one cannot clearly perceive what the long-term problems might be because the impacts of burning of coal has long been remote and abstract.

Applying this principle to the sub-prime mortgage mess, the investment banks have simply gambled that the value of home would continue to increase. As long as they increase then the investment banks can obtain a yield, that is they can buy huge blocks of mortgages in expectation that they will be able to sell them at a profit to someone else who will in turn gamble that they too can skim enough profits from selling it.

As you know, this wasn't the case, and in fact these mortgages were structured in a way to actually cause failure in such a way as to be able to blame the victims who were in fact enticed by the banks in the first place.

The sustainable solution: get your mortgage from a local federal credit union. They cannot sell your mortgage to an investment bank. They won't even offer you a sub-prime type of mortgage. Like you, they assume the risk of you failing to pay your mortgage for whatever reason. And like you, they also reap the benefits of successful mortgage payments: your credit rating remains good which can increase the energy-related resources and the yields of of those extra efforts, your money stays local, allowing the bank to make investments locally and distribute the profits back to you and your community.

The above assumes the system in which you and your credit operate contain locally established and operated political, cultural and religious enterprises that keep most, if not all, feedbacks local so that there is efficiency and stability. If one of the four are not local, then the true impact and costs on the community cannot be calculated and thereby is not stable and not efficient, both factors predicated a sustainable future.