Here's an interesting article by Kurt Cobb over at the The Energy Bulletin. It's about an article by Nassim Nicholas Taleb and Mark Blyth. While I haven't yet read Taleb's article, Cobb gives some insight.

I've read one of Taleb's books (Fooled by Randomness: The Hidden Role of Chance in Life and the Markets) and found it quit interesting (if not a bit scattered).

The apparent thesis of his recent article is that suppressing volatility creates a worse situation than not suppressing it. As a (recovering) engineer, I can agree and I can cite a number of examples.

The first one that came to mind was the airplane wing. The wing is designed to flex. If it cannot flex, then it will likely break. On a related note, the Wright brothers realized that the wing needed to be flexible for the plane to fly. I have not looked into the physics of this but it appears that the Wright Brothers were right! (pardon the pun).

The more obvious one is in parenting. Imagine you are at a public event (like church) with a toddler and that toddler starts to act up. Sometimes shushing will get him or her to quiet down for a while, but eventually, the restless cherub lets loose.