<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> <HTML> The extract below, from Don Winslow's 'California Fire and Life,' features an arson investigator named Jack Wade as its protagonist.  (Winslow himself, according to the novel's blurb, worked as an arson investigator in Los Angeles for fifteen years.)  Jack Wade's assessment of economic cycles in southern California is just a trifle jaded and has only tangential relevance to this discussion, but here it is anyway. <<Jack knows that there are about eighty-six thousand arson fires a year. That’s about one for every hour of the day and the motive for most of them is money.      Or more properly the lack of it.      Fire makes all things new again.      A fire in nature burns off the old to make way for the new.  Same thing in business—it burns off the old investment to make way for the new.  It’s an ancient cycle, and the fact is that the incidence of arson directly corresponds to the economic cycle.  In boom times, arson goes down.  In a recession it goes up.  In boom times, people buy a lot of stuff on credit because they’re making the money to service the debt.  Then the recession hits, the money ain’t coming in like it was, but the debt is the same.     It’s the same thing with homes.  Most people buy more house than they can afford.  They buy the house when things are fat, thinking they’re going to stay fat forever.  then things get lean, but the mortgage is still fat.  The mortgage doesn’t go on any damn diet.     Most people walk away from the house, say good bye to their equity and try to start over.     Others say, like, fuck that, and get proactive.     Let their insurance company pay off the mortgage.     It happened a lot in Orange County, Jack thinks.  In the Reagan years everyone was fat.  The whole economy was betting on the income.  Then reality hit, and what everyone bought on credit during the Reagan years they burned down during the Bush administration.  The Orange County treasurers got caught on the slide and the county went bankrupt.  So the real estate market collapsed, the building trades went down the chute and the only industry that was booming was the arson business.     Out with the old, in with the new.     Nature’s eternal cycle.     Sometimes nature does it on her own.     It’s weird to contemplate, but Jack knows the reality is that the eventual Southern California economic recovery was fueled by disasters, first fire, then earthquake.     It’s 1993 and the economy sucks.  The real estate market and building trades are moribund and everything else comes to a standstill with them.  Then the fires hit.  Laguna, Malibu, Thousand Oaks.  Big out-of-control fires that rise up out of the dry ground and the hot dry wind and burn thousands of acres and hundreds of houses.  A lot of people are burned out of their homes and the insurance companies pay out hundreds of millions of dollars in benefits. Which is where the economic recovery comes in, because the fires restore the building trades.  The insurance companies provide the cash to rebuild the burned homes.  Contractors get hired, they hire workers, they buy materials from the suppliers, the suppliers start hiring people, the people take their salaries and buy stuff . . .     The cycle goes on an upswing.     Then the earthquake hits.     Nature comes to the rescue because it forces the insurance companies to lolly up billions.  Billions of dollars of new money gets pumped into the So-Cal economy and it gets things started again.     So sometimes nature touches off the cycle.     More often, though, it’s people.     Touching off their own economic renewal with a match.>> Copyright © 1999 by Don Winslow / Alfred A. Knopf  / pages 166 - 167  </HTML>