Tuesday, December 11, 2012

Big Picture

A long time ago I attended a seminar about problem solving and decision making. One of the most important illustrations was that people cannot contemplate more than two things at once. Today I listened to a pod cast of an microeconomics professor discussed his book about the affects of public policy rule changes that he believes are responsible for depressing the economic recovery and extending the recessionary pressures on the American economy.

His opinion is that each rule change is not the culprit which can be blamed but that it is the aggregation of the rule changes that disable the labor market and depress the economy.  A comment made by both the host and author was that many economists are not recognizing this and continue to insist that it is macroeconomic issues that are the single biggest influences.

The point is that the people responsible for the recession and depressed recovery are incapable of recognizing either the problem or the solution because it is the aggregation of rather than the isolation of the problem and solution.

The collapse of the economy does not have a single cause but is the victim of the perfect combination of factors resulting in the collapse. It is also the incompetence of leadership failing to resolve the issues and enacting the correcting legislation.

"What we have here is a failure to communicate" The leadership of this country has failed to represent and inform the citizens and the citizen's has failed to meet their responsibilities as members of a society.

The political class misunderstands it role of representing their constituents in the arena of ideas. The public sector class misunderstands it role of administering the resources.  The private sector class understands it roles but fails to consider it duty to fidelity. The worker class does not relish its role or is willing to acquiesce to the reality of their position in the structure of society. The welfare class unfortuantely embraces its role and expands it reach.

What we need is an understanding of the big picture and the willingness to adhere to the prudent course. The debt and deficit did not come about all at once. However, because of the unwillingness of Congress to deal with the problem the solution is going to be much more painful that everyone hopes. The question is when will the bubble pop?

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