Thursday, April 23, 2009
Something’s bothering us.
How in the heck did so many become experts on economic theory overnight, and declare themselves competent to expound on this tactic or that?
Not only are they economic experts; they can predict the future with certainty.
Lots of us have difficulty tracking a checking account balance.
We here at the Institute aren’t sure of much, other than tequila will make you stupid, vodka will make you delusional, and hanging out with more than one woman will make you broke.
And so with amazement, we have watched talk show hosts, pundits, and just regular folks like us, draw lines in the sand describing what happened, why it happened, and what is about to occur.
Where were these people before things started heading south? And why weren’t they running things?
We’ve operated businesses. Stuff’s tricky. We don’t pass judgment on others, especially those with larger /more complex operations.
One of the Logistician’s partners used to say that business people are happy if they get it right 51% of the time. 60% will make you wealthy.
And yet people with not even lemonade stand experience call others incompetent.
That’s not to mention those who’ve cornered the market on history and claim their view is historically accurate, while others are revisionist in nature, or worse yet, lies.
A symposium on the economy was recently held at George Washington University.
There were roughly 10-13 economists, journalists, former banking officials, and business professionals.
First, the group noted that over decades, our best and brightest were diverted or “distracted.”
Instead of pursing careers in science, bio-tech, and other technological areas, they spent time creating “innovative financial instruments,” and generated huge amounts of money, mostly for themselves, through leveraging.
Second, the question arose as to how the best and brightest from our top educational institutions managed to be at the center of this whole mess. This was not a collection of dullards.
Third, there was some sense that the captains of finance had little sense of social responsibility.
Fourth, no one attributed our economic situation as primarily due to one factor, a short period of time, one party, or one administration.
Even the least sophisticated amongst us should appreciate that:
1) The world hasn’t faced a similar economic crisis in our lifetime. There is no historical precedent. No one really knows precisely what to do;
2) This crisis seems to have been precipitated by an economic situation more or less defined by the availability of more capital than good deals;
3) There is no more “them” or “us.” We can’t get along without Chinese money and China can’t get along without the American market. We need a world wide coordinated effort… which is going to be difficult;
4) The economic policies of the last 8 (or 15, or 20, or 30) years got us to this point and did not produce the desired results;
5) When you find yourself in a hole, the first thing to do is stop digging;
6) There is no drug as addictive or powerful as easy credit and the promise of instant wealth;
Finally, we’ll pass on something from a buddy who should know. The main reason why Tim Geithner is flailing in the wind is he can’t consult the Street and the Big Banks because there are horrendous conflicts of interest. Treasury is also inadequately staffed for this reason, along with the fact that few have the guts to take on a task of this magnitude.
Much of the wailing and brow beating can largely be attributed to a few who became very rich during the last decade exploiting easy credit and nonexistent regulation.
They became hooked on the most powerful drug extant.
The rest of this public viciousness is nothing but political finger pointing.
Hunter Thompson once observed of Washington: “In a closed society, where everyone is guilty, the only crime is in getting caught, and the only sin is stupidity.”
Mark Twain, 100 years earlier, noted: “Few things are harder to put up with than the annoyance of a good example.”
We elected this man on the promise of change. Lord knows our economy is in desperate need of something different.
We at the Institute of Applied Common Sense ask only that those both for, and against, this change “get with the program.” If you have a better idea, let’s hear it.
If not, let’s tamp down the fervor, and give a new approach a chance.
After all, the stuff we did before obviously didn’t work.
Except, perhaps for the benefit of a few.
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