Thursday, July 10, 2014

Flexible Growth is Still a Good Strategy

In retrospect, it is becoming clear that economists, policy makers, investors and many in the business realm knew that a better way forward was needed, well before the political "warnings" which were finally issued to the public this year. What do I mean by warnings? Basically, Washington began telling the public to dial down its expectations re growth potential, well into the foreseeable future. Even so, no clear rationale was given, as to why this should be the case.

Why no suggestions from those perceived to be "in charge", as to any change in course? Instead of offering viable alternatives for progress, political constituents are asserting "it's the other side" which is bereft of ideas. For that matter, Washington appears poised to make some of the same mistakes all over again, which were made prior to the Great Recession. At the very least, our government could have taken care of pressing issues regarding immigration, before it finally became such a hot button issue. Life feels quite strange, when our president is forced to return young children to countries of which they were scarcely able to get out alive.

Looking through notes taken just prior to starting the blog, I was reminded of the years when more individuals were actively engaged in the search for solutions. Certainly, many were following both economic events and dialogue closely, because they really believed more could be done. It is sad, that the chance to find new societal direction in an opportune moment, was squandered by those with the proper authority to bring it about.

Yet only with the dawn of the new year, did the expectations of regaining our previous growth dynamic finally die down. At that point, observers began to disengage from the process, as they embarked on what were doubtless more rewarding activities. Economics certainly can feel like a "dismal" science when out of date arguments circumvent the new. Hence it's hard to really blame anyone for giving up and taking their attention elsewhere.

Just the same, the need for better strategies has not changed in the meantime: not one iota. Fortunately there are still some bloggers (and others of course) who are willing to keep putting the message out there: by no means is the job done! I am grateful indeed to those who have not given up. No nation can continue to tread water indefinitely and hope to keep living off of its past "glories". In particular, I am grateful to the market monetarists who continue their efforts for better monetary policy - not just here in the U.S. but in other nations as well.

What was missing in all of the dialogue...which finally died down? No one ever really became serious about overcoming a mass of rigidities, which remain responsible for economic and social gridlock. There is still incredible growth potential that is possible. However, new economic growth needs to be envisioned in terms far more flexible than the present, in multiple respects.

To be sure, first mover problems are inherent. However that is an issue which could be approached gradually. Because so many factors now stand in the way of getting anything done, economic rigidities of all kinds need to be smoothed out en masse, in small and "contained" circumstance. That way they need not pose undue disruption to the general equilibrium. How to accomplish that? First, recognize that initial efforts require experimental settings. This means a unique variety of applied path creation (for overall access) in service options and building component options.

Because such settings are experimental (and with many different path creation imprints), they need to start small and build up gradually, in order to be manageable and discernible for applicable results. If one would go so far as to call this "planning" - it is nonetheless better than the everyday variety of municipal development planning. Why? because people from all walks of life would be involved in the forms of infrastructure which they could maintain and take part in. For instance, suppose a given setting "works out". It may appear particularly desirable and yet be subject to considerable limitation, much as "desirable" cities and nations are, in the present. Therefore more new settings would be generated, to match the capacity of those who would contribute and take part in them.

One way to think of this scenario: people would be implementing multiple versions of exit, voice and choice. While some have tried to imagine how this might work, the discussions I've noted are those where individuals are already relatively happy with the environments they participate in - thus find it difficult to imagine a unique gain from charter cities, for instance. The reality is that people create anew when they are particularly in need of new options - just as the U.S. experienced its own beginning.

The best thing that any nation can do now, is give its citizens new horizons at home - particularly when the marginalized do not have other places to go and start anew. When a nation has the courage to offer exploratory frontiers for its own citizens, there is still hope. Should nations find the courage to commit to flexible growth, people might once again explore new places because they are curious about those places. Not because they are desperate for a way to survive.

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