Wrap Up for August '14

There's plenty in this August wrap up - these past weeks have certainly provided "food for thought". Earlier in the month, Time ran an article about the career advice "no one ever really gives you". Among the (somewhat) unsettling suggestions were "Doing your job well is not enough," and "Who you work for is hugely important. So is where you work."

All I could think after reading the above linked list, is that a number of CEOs have been trying to get out the word for a while - particularly since the playing field has changed in some key respects. The message basically goes: "We don't have all the answers, either for employment or economic stability! Sorry...give us a little help, guys!"

Except...the things that could help, still aren't happening. How many growth summits or helpful coordinated strategies between government and business have we witnessed, lately? Instead, policy makers have decided to tell the public that new growth strategies are MIA and "little can be done". Just the same, none of this pretzel logic has quieted the call for fiscal "solutions". "Fiscal to the rescue" stems from the idea that government magically pulls new business formation (along with jobs) out of a hat where business cannot, I suppose. But Washington has too many short term obligations right now, to provide an encore for that special request.

And since preexisting government obligations are too onerous to actually contemplate (let alone do something about), some economists still want to know why governments aren't stepping in, to do what private industry cannot. (Huh??) Since some folk didn't get the memo that fiscal options are mostly off the table, a monetary response - which would at least be capable of stabilizing economic activity - is instead in line for "takeoff" (our "back to normal" economy) with one engine still missing from the plane. However, as Barry Eichengreen recently noted:

...if the US does experience secular stagnation over the next decade or two, it will be self inflicted.

Timothy Taylor likened the recent Vox publication on secular stagnation to the parable of the blind men who all grab hold of different parts of the elephant and describe what they feel. Mostly, those descriptions were a bit too predictable...plus it didn't help that market monetarist were not even represented among the authors. Something else feels missing from these stories of secular stagnation as well: the idea of a complete marketplace, which has been all but abandoned in the struggle to move ahead with no adjustments to existing institutions, whatsoever.

Thinking about the missing marketplace, I find myself returning to a Zen koan which asks: how do you go further from the top of a hundred foot pole? Because that's what today's economy feels like - as though everyone awaits at the top of the pole, trying to figure out how to continue past the limits it imposes. In the meantime, bonuses become the new raises. As one executive noted in the linked WSJ article, the rules of engagement have probably changed permanently.

Living "as fully as possible" is a good response to seeming limitations. Some would just as soon forget about the economy and find new meaning on non monetary terms, elsewhere. However, passive adaptation to these economic circumstance could mean regression and loss. In "Instructions to the Cook" (1996), Bernard Glassman sought entrepreneurial means to generate connections between those who lack economic access, and the world they live in. He knew how important it was for all individuals to understand business concepts and the fact that money matters. He also understood the importance of including the rich alongside the poor, in common efforts for more integrated economies.

When I picked up the link for the book, I also found a related film which some readers might be interested in, which goes through the chapters of the book. Years ago, I was quite fortunate to learn from - and work with - an intuitive Lebanese cook, who utilized the same cooking principles which also apply to social action: use what you have. More than once, I was worried there might not enough food in the refrigerator to prepare a good meal for the guests who would arrive in a matter of hours. And yet - not only was there always plenty, the guests also enjoyed the results. This is the same principle which would allow any community to begin anew, economically: work with the resources which are already in place.

How to think about the 100 foot pole, in economic terms? There has been so much wealth in recent centuries, that for a long time, no one had to worry about the means of redistribution which became formalized as government fiscal activity. Hence people forgot the degree to which redistribution was dependent on the continual gains of the production residual, which paid workers to aid in the reconfiguration of adapted resources. Production residuals were especially helpful, for they sought to continue the monetary flows which provided new possibilities across the entire spectrum.

Production gains still provide tremendous wealth. However, they no longer work efficiently at local levels which need to remain capable of completing economic processes. To imagine moving "beyond the pole", move local services into the private realm, where they can be negotiated locally and individually. Provide greater flexibility and liquidity, for property utilization and ownership. Allow people to govern their own lives for services needs, so that the wisdom of the elders might have a chance to return. Another way to think of services to digital construction, is as a further strengthening of the net.

Today, government and business alike rely on a strong net, which is flung across the globe. Except there's just one problem. Those components are so broadly spaced that many facets of society - hence potential economic activity - fall completely through. Just the same, a stronger net remains possible. In the above linked book, Glassman refers to Indra's net, where each person and event is connected in space and time.

Local communities could generate stronger nets through becoming broader institutional structures for resource use, than today's business formations are now capable of. In effect, this would allow participating communities in knowledge use systems for services, to become supra institutional structures, by including the resource possibilities in their own midst. These structures would generate strong nets, and few would fall through the remaining holes. In short, economies everywhere need the help of their help of their local economies in order to continue moving forward in the 21st century.

...more links, so I'll give the rest of the wrap up over to them:

Jobs are coming back but with lower pay - what every local economy needs to bear in mind as it considers new forms of infrastructure for the future.

http://www.chicagotribune.com/business/breaking/chi-jobs-wages-inequality-mayors-20140811-story.html

An article from Paul Krugman, (India Times)
http://economictimes.indiatimes.com/news/international/world-news/us-crisis-not-over-america-should-learn-from-europes-experience/articleshow/40308766.cms

This county by county map is quite useful for anyone who wants to get a better picture of local economic conditions in the U.S.
http://www.nytimes.com/2014/06/26/upshot/where-are-the-hardest-places-to-live-in-the-us.html?action=click&contentCollection=The%20Upshot&module=RelatedCoverage&region=Marginalia&pgtype=article&abt=0002&abg=0

Of course every group has viewpoints that don't necessarily line up with one's own, and Ryan Long makes a good point about libertarians in this post.

Cross country comparisons are not easy: Dietz Vollrath takes a closer look at GDP.
http://growthecon.wordpress.com/2014/08/29/what-does-real-gdp-measure/

James Pethokoukis highlights slavery in an AEI post: This map shows where slavery and forced labor are happening around the world.

Not so long ago, it seemed that everybody did (Pethokoukis)...Fewer Americans now self identify as 'middle class'

"I feel like a pawn in a moneymaking game for hospital administrators." http://online.wsj.com/articles/the-u-s-s-ailing-medical-system-a-doctors-perspective-1409325361