Of the myriad of issues that presently plague humanity across the planet, there is only one so dire to affect even the most developed states with a furor that could topple the globe. The global financial crisis grips the entire world by the throat, without any intention of backing down. Every state from Iran, Russia, Bolivia, Germany, the United States, and everywhere in between is suffering the precursors of potentially the greatest international economic meltdown in history.
Naturally refusing to collapse without a struggle, every state has established or is currently in the process of establishing some type of recovery plan. But are the plans working? Will they work? From the feedback shown by economists such as 2008 Nobel Prize winning Paul Krugman, optimistic results are unlikely. Differing ideas – for instance in the US Senate, republicans vying for tax cuts while democrats profuse government spending -- hinder the productivity toward the optimum solution. Now, before the bickering begins on who is right or wrong, why does any government carry differing opinions?
Balanced solutions call for two imbalanced ideas to communicate the pros and cons of each thought, falling in a central, ideally perfect spotlight. While in democratic societies this opposite attraction format is believed to work, and often does, the current time depicts that this is not always the case. There is no middle ground when dealing with economics. The science is just that – a formulaic paradigm bound by a set of rules rather than opinions, of historically proven methods without the freedom to alter. Where does this lead? The answer is in the form of a question. But first, a historical tidbit…
In the educational series “Cosmos” first shown during the 1980s, renowned astronomer Carl Sagan asked the question “Who speaks for Earth?” pondering the situation that extra terrestrials make their way to the planet. With the division between the states of the world, there is currently no single sponsor who would stand up and speak. Sagan went on to say, after an enormous amount of thought, that scientists were the only humans capable of speaking peacefully and knowledgeably, mainly due to their absence of agenda; there are no constituents to satisfy with their findings. Wouldn’t the same outcome ring true for the current economic crisis? The mathematical nature of the situation calls for those that are knowledgeable and wise, without the pressure from non-expert opinions around them. Rather than bi-partisanship which US President Obama stands steadfastly upon, economists form a sort of non-partisanship – which brings this inaugural blog to its finish line.
Why is the world relying on politicians to solve a financial crisis? Why not place the reins into those hands that know what is required: economists?
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Carl Sagan, the original gangster. Good article. I agree that science provides the best answer, but economics is not really a science on the level of say physics. There are no methods of systematically testing hypothesis due to the fact that no economic event will completely mimic another. This doesn't invalidate the field, but it makes it a bit more shaky. I would settle for politicians who are advised by economists.
ReplyDeletehttp://www.bobcesca.com/ the tax cuts vs spending post. It seems there is a consensus about the solution at least for the mainstream economists
ReplyDeleteWe have no choice but to settle for politicians advised by economists. The problem is -- they're not listening.
ReplyDeleteEven worse, United States President Barack Obama vows to listen to "good ideas" (http://www.youtube.com/watch?v=k4JPSPOp48o), but clearly fails to see the bigger picture. Tax cuts and deficit spending are not compatible. Why must he insist on partisan politics, including dangerous ideas inside the stimulus bill in order to appease senate republicans, especially when they refuse to even vote for it?
I agree Sam. Politicians are the only people that are left to run the country. What are we to do after hundreds of years of Democratic government? But when real thought process kicks in, all countries are subjected to groups of government officials that know nothing of what true quality is. This country now and forever will be controlled through false pretenses and individual induced lying. It's what people of the world are accustomed too and America is no different. Unless there is a way to predict the future, we as people will be subjected to experiments of the social and economic kind. The fact is, because this train of experiments has lasted for centuries, no one is going to change their way of thought or process. Politicians will further lie and have their own judgments about certain ideas. Clearly I've gotten off on a tangent of your first sentence, but I'm sure we know where the point is going. People will continue to argue what they think is the correct way, and "we" the powerless will be rats looking cheese. "You may smell it, but you can never find it through a maze of shit." Secondly and shortly, no matter what action is made and/or maintained the economy will most surely become weaker, and rise again. The crest and trough effect.
ReplyDelete"What are we to do?" in a functioning democracy people would get together to make sure that policy reflects the will of the people
ReplyDeleteWell the US is not exactly anywhere near a functioning democracy. I didn't want to get into socialist sentiment.
ReplyDeleteDarren:
ReplyDeleteOn your first point about democratic governments run by representatives who make policies based on experimentation and advice by those they represent -- I in no way support upsetting that format. Even with the amount of dissent left over following a proposed solution, the opportunity to have a voice in the solution is still priceless.
My point was that they should lend an ear to those they represent that understand the problem, rather than those who just want more money in their pocket. This isn't an easy task for a number of reasons: Because there is no accreditation program to become a knowledgeable economist, anyone could claim this status. Also, the endowed members of the communities that elected the representatives have an agenda -- to keep their money. How many people would vote for a bill that refuses the opportunity to grant them more money, when they know such an opportunity is forcing its way in?
The sine wave theory is correct, but to simply stand by and trust that a package filled with unnecessary additions will succeed is a difficult stand to take.
"Man's own deed becomes an alien power opposed to him, which enslaves him instead of being controlled by him." -K.Marx
ReplyDeleteLast paragraph updated a bit to outline the importance of political vacuum in a situation that is more mathematical than social.
ReplyDeleteUrBetterThanMe:
Care to explain how the quote relates?
I'd like to say that I'm sure President Obama IS lending an ear to the best economists (however qualified) that the nation has to offer, and is hopefully trying his damnedest to take a non-partisan approach to do what's best for the country; I'm convinced the problem is on the Congressional end.
ReplyDeleteWhen it comes to passing legislature, Congress doesn't approach things with the idea of reaching a middle ground. The thought process behind "pork" is if I'm a Congressman, I'll give you my vote if you'll pass the bill with this little clause thrown in that gives my party or my state (insert random thing here). Also, any changes made to bills in Committees are done by Congressmen/women, not economists. Many of these men and women have links to lobbyists, have their own interests, and have their own agendas. This was a huge problem with the Bush administration, as you all know. People with ties to the Jack Abramoffs and people with their own money-grubbing agendas have access to bills that could be potentially helpful to our current situation. Even a President with as much sense and as many advisers as Barack Obama can't save a nation whose self-serving Congress won't pass a bill without touching it. He'll have to pass a bill he supports, even if it builds Nebraska a new rugby arena thrown in the bill by a Committee member at the cost of taxpayer money, for example.
I totally agree with Sam; it's not "Reaching Across the Aisle" that's going to save the nation; It's getting out of the aisle all together.
Well said about congress, Jason. It's unfortunate the system has a few snags. Again though, the presence of such opportunity is humbling.
ReplyDeleteWith that said -- media plays a watch-dog role in politics, and to claim trust in President Obama without incessant observation is dangerous. The press conference held tonight provided a calming sense of security through his attention to giving solid, straight-forward answers to hard-hitting questions, while abstaining from responding to those that he had no clear answer. As long as this nature continues, and the nation holds President Obama accountable to respond in a timely fashion to the questions he doesn't address at that moment, the United States and rest of the world have much less to worry about.
Right, but I have been observing; I don't see anything so far that worries me. He's got a good team of advisers, a good Cabinet save maybe one or two I'm a little wary of, and I'm just really optimistic about the current situation of our Executive Branch. The Legislative Branch is what I believe is failing us and needs the most attention right now.
ReplyDeleteMy post wasn't meant to condescend, just to highlight the importance of constant critique.
ReplyDeleteCheers, Jason.
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ReplyDeleteAlright, Sam. I'm too lazy to critique right now, but I'll give you my current perspective on the Stimulus:
ReplyDeleteMost every journalist — yep, that includes Krugman — has been focusing too much on the current “Stimulus Package” that the Obama administration has so profusely supported in an attempt to counter this financial crisis we are now facing.
The bill isn’t perfect. Nothing is. And anyone who follows politics and thinks for oneself should have an opinion on it. But journalists — both on the right and the left — could learn a lesson or two by simply listening to President Obama’s straightforward explanation of the economic future we face: Yes, the situation is indeed dire. And yes, many of us currently unemployed still won’t have a job in a year, perhaps even two or more. The Stimulus Package is not going to solve everything. But it is a start. And we shouldn’t lose confidence even though things will likely get worse before they get better.
I’ll admit that I am a part of the current liberal economic vanguard. I believe we should be providing more stimulus, not less. And I know that we could have done far more in this package. But Obama has only been president for just three weeks. We should relax. This is the first major piece of legislation he has promoted. Let’s give him a chance. It is not as if we only have one opportunity to get it right before the world collapses around us.
I’m not trying to say things aren’t bad. I’ve been on the job hunt for more than 8 months. Our economy really sucks. For us unemployed, it sucks away our time, our energy, and, for many, our sense of self worth. We certainly need some form of government intervention to mitigate the situation, but to think that a single bill of legislation will determine our fate is ludicrous. No, McCain, it’s not going to trigger an endless budget-bloating spending splurge sparked by the unleashing of some liberal Democratic ‘tax-and-spend’ philosophy that has been suppressed for the past 8 years. Take a look at what your party "achieved" in those years. And sorry, comrade Rush, but it won’t signal the collapse of free-market capitalism nor usher in a socialist society.
On the left, Krugman needs to stop espousing this idea that if we don’t get it right in this first bill, then we have wasted our only shot at fixing the economy. Even if we pumped as much money as his genius brain can calculate into the economy though a single act of congress, it will not be a panacea to our problems. Yes, he does understand that substantial legislation — such as a reformation of the bailout program — must follow, but our current package is not our only shot at stimulus. If we have learned anything from the Bush administration, we can always spend more. There is no reason to get unhinged and start condemning bi-partisanship based upon the legislative process of one (albeit large and important) bill.
Fortunately most of us understand that the Stimulus Package is merely the first step to recovery. It is hard to fathom the depth of damage inflicted upon almost every aspect of American society by Bush’s reign. The suffering was long and hard. And yet W’s most atrocious failure — this credit crisis — was not fully realized until his final year, and just weeks before the election. Right now we are still feeling the aftermath of Bush’s presidency. There is no way to avoid it; the memories and the aftereffects might not recede for a while. As Obama continuously repeats, things are going to get worse before they get better. Let us take solace in the fact that we have a President with open ears who can make practical decisions based upon facts, not ideology. And let us relax for a moment knowing that we have a President who is reasoned in his assessment of our economic situation and is being open and honest to the public. Remember, we almost had Sarah Palin.
"Man's own deed becomes an alien power opposed to him, which enslaves him instead of being controlled by him." -K.Marx
ReplyDeleteawesome. Somebody actually read him and didn't just use the name as a swear word