Random Thoughts About the Economic Mess
I'm not an economist nor do I play one on TV. Nor would I want to play one on TV nor for that matter would I want to be an economist, practitioners of what historian Thomas Carlyle called the dismal science. Frankly, I still can't quite figure out what economists actually do other than spin out fanciful theories about why things do or do not work that seem to have little relationship to whether things do or do not work. Still it must be nice to have a job like that. In any event, here are a few of my own non-expert opinions on what's going on right now with the global economy.
Clearly aspects of the economy have gotten so complex that it eludes understanding of even very sophisticated thinkers. The experts have often been baffled and stood before the public without good or cogent answers or explanations on numerous occasions. Combine the complexity of exotic designer financial instruments with the ability to move money around the planet on a near-instantaneous basis and, voilà, you get the kind of volatility we're seeing today. But here's the thing: The notion of anyone having the valuation of their life savings, retirement money or any huge chunk of personal financial resources moving up and down like a yo-yo is simply not a sustainable economic model. That said, it's surprising to me how many people have accepted this as if there were no alternative.
As I wrote about in Digital Mythologies, I believe that social and economic forces of IT and telecom combined fosters wealth-generating mechanisms that are still not fully understood (rest my case on this one folks -- look around). If you're interested, e-mail me and I can point you to research that documents this phenomenon. But this mechanism has not mapped well into the old "smokestack" economic models. Result: what we're seeing today.
Cure? I have no idea other than the fact that some radical, enlightened and creative new thinking is called for and, once proposed, will most certainly need some sort of global buy-in.
Posted by Tom Valovic on 12/15/2008 at 12:49 PM