Economiasma – A Weekly Whiff of Economic Scents – The River’s Backed Up – December 13, 2011 – by Bill Dahl

Here’s my Weekly Whiff of Economic $cents for December 12, 2011:

Pulitzer Prize winning economist Joseph Stiglitz has written in Freefall: America, Free Markets, And The Sinking of The World Economy:

 “This book is about a battle of ideas, about the ideas that led to the failed policies that precipitated the crisis and about the lessons that we take away from it. In time, every crisis ends. But no crisis, especially one of this severity, passes without leaving a legacy. “(p.xii). (emphasis is mine)

As Stephen Johnson says in The Ghost Map:

“The river of intellectual progress is not defined purely by the steady flow of good ideas begetting better ones; it follows the topography that has been carved out for it by external factors. Sometimes that topography throws up so many barricades that the river backs up for a while.” P. 135

I lived in Washington State on May 18th 1980 and distinctly recall the eruption of Mt. St. Helens that morning. The debris laden mudflows and caused both forks of the Toutle River to become raging torrents carrying fallen timber like toothpicks and lifted homes from their foundations – smashing them into one of the few remaining bridges left temporarily in tact.

Clearly, the river of economic ideology  is raging and backing up. There are so many ideas floating around, battling to become the assemblage of strategic economic policy (both globally and domestically) – that what appears to be a breakthrough of the logjam one week – becomes a discarded pile of rubbish beside the swollen banks of the torrent the next.

History is littered with the devastation of comparable, cataclysmic economic events….many of which, just like Mt. St. Helens – were not predictable in terms of timing and scope. Yet, I am reminded that the resolution of these matters is a process, not an event. Of course, we humans have the penchant to believe that the current economic challenges that occur during our lifetimes are both unique and unprecedented.

Ideas about what to do about debt, deficits, taxes, R&D, stimulus, Medicare, immigration reform, defense, budgets, social services, the disabled, Social Security, healthcare, Medicare, fiscal policy – unemployment, homelessness, hunger — all currently creating the logjam – clogging the flow 0f the river of economic progress. Here’s an insight from last week to throw onto the pile:

The OECD – Organization for Economic Cooperation and Development  released a report last week measuring tax revenue as a percentage of GDP.  The United States ranked 27th out of the 30 nations examined. In the U.S., taxes are currently the lowest since the early 1950s.

Hmmm…which ideas will break free from the logjam and unleash the flow of employment, certainty, trust and progress that we so desperately require? During the next several weeks, I will be looking at the ideas of thought leaders about how truly constructive ideas come together to form breakthroughs – when the River’s Backed Up.

This week, I’ll leave you with two thoughts from author and thought leader Stephen Johnson:

“Part of coming up with a good idea is discovering what those spare parts are, and ensuring that you’re not just recycling the same old ingredients.” (p.42)

The River’s Backed Up – I just have the sense that recycling the same old ingredients – just ain’t gonna cut it. If we continue on that course, the outcome may be a history for this period where the folks who write it well after we’re gone characterize this historical epoch akin to Stephen Johnson’s observation in his work, The Ghost Map:

“But the blind spots on the map, the dark continents of error and prejudice, carry their own mystery as well. How could so many intelligent people be so grievously wrong for such an extended period of time? (emphasis is mine – p.15)

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