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A Fiscal Cliff Fable — Or Maybe a Solution?

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Volume 2, Issue 37

They called him the SAP. The kid looked about 12 years old. He was Special Assistant to POTUS — the President of the United States. The President gave him the mission of cutting through the impasse and getting both parties to come up with a plan to get the USA off of the “Over-Leveraged Nation Goes Broke” scenario that most agree is inevitable in time given the present course.

The SAP set forth on his mission and held short meetings with practically every legislator in Washington. He invited a very small number of them to work with him on the solution. Virtually every invitee agreed. They all regretted it because the kid almost never slept.

In the first couple of days they went over the numbers and beat on them to make sure they were right. Some hoped this would reveal that everything was going to be OK. It did not turn out that way. Twenty years or so out, pick any model you want, the US could not keep up paying its obligations to Social Security, China, et al. Someone was going to have to take a haircut, maybe everybody on the planet.

And old habits that were hard to break were going to have to be broken. Wars were too expensive. We were going to have to learn to be better at preventing war and winding it down fast. Paramilitary budgets would probably go up. We would need to link up with all of the nations of the world — excepting the irresponsible ones — to share intelligence information on a scale unprecedented even by the world wars.*

Borrowing would be another bad habit to break, except when growth forecasts became stable again, enough to justify leveraging money cautiously and with set limits.

By Day 3 there was grudging agreement that people who had put money into Social Security had to at least get their money back out again, and if the numbers could be made to work, indexed for inflation and possible including a modest rate of return of say 2% (on the theory that 4% could be maintained going forward and half the gains would go to the government to pay for the administration of the program and as an additional revenue stream to ensure the country would never get into a fiscal corner again). That was the first decision that got locked into the model. Social Security would not be shut down but the government had to find better ways to grow the monies than it had in the past. This planted the seed for a subsequent idea a month later.

On Day 4 there was general agreement to actually invest more money in free retraining for people of working age (and any seniors who wanted it) to be able to support themselves. People capable of giving such trainings would be asked to tithe 10% of their time to conduct such training without compensation. The others looked on in amazement as the SAP dispatched a small army of staff to go work out the details of that program according to the principle the small group had agreed upon — with as much as possible of the retraining to be done by or in partnership with the private sector.

This idea triggered another one that day, to run a government-partnered-with-personnel-agencies master job and candidate database, into which all people out of work would be listed along with their talents and objectives, to be matched with the jobs available that employers would be sure to post on this master database system. The companies with great matching/search algorithms would be asked to donate their time to create together the best matching optimizer on the planet. The challenge itself would attract top technology talent even without money as a factor, the SAP’s team reasoned, pointing to the phenomenon of the quality of the best open-source software.

Late that same day, as energies were perhaps flagging,  the SAP came up with his own  idea of creating the opportunity for people too old or infirm to work outside the home to make money by honestly endorsing the brands they really do like, and giving their reasons. He made a call to a techie entrepreneur friend to get that plan underway as a venture company. Later in the day he laughed at himself for even having the idea. First take away their money, then their dignity, wow there’s a great solution. (Later the friend refused to give up on the idea, which became the next Google. But that’s getting ahead of the story.)

On Day 5 they ran the numbers and calculated how much more tax money would have to come from the ruling class. Half the room assumed a fighting stance. The SAP got up and acted out a role-playing game in which he pretended to have the power to negotiate with the ruling class directly over the conflict. “What do you want?” he asked the legislators of the Right. They didn’t know what to say. Finally one person said “Let our votes count double because we stepped in to save the country.” “After you got us into this mess,” said a legislator of the Left. The room devolved into temporary chaos at a high decibel level.

By Day 6 the horse-trading had reached close to the reality horizon. But it was really on Day 7 that the ideas began to sound practical. By day 30 the ideas were actually ingenious and showed what Americans are made of. The government would partner with the rich to co-invest in America and around the world in companies doing basic scientific research and/or innovating new technologies with great upside and not just economic. In addition to a tax shift to be fairer to everyone, resulting in additional support from the wealthy, this co-investment idea would turn out to yield profit shares to the government far exceeding tax revenues.

By Day 60 the deal was struck and by Day 120 it was written into Law. Other countries took the clues and adapted the ideas to their own cultures and situations.

A fable? Or what we must do, when we stop fooling around?

Happy New Era!

Bill

*I recommended this in a speech to the Commandant and Corps of Cadets at West Point in 1982, who invited me because they liked my book Mind Magic. The paper, which emphasized the need for “strategic micro-action”, is available on request. Strategic micro-action would have meant getting out of Afghanistan after Osama Bin Laden was eliminated, winding down troops strengths faster in both Iraq and Afghanistan after punitive demonstrations in both countries sapping the strengths of terrorist organizations, and after removal of Saddam Hussein, without sticking around to try to help with ethnic civil wars or police actions, however maintaining training forces and paramilitary. It would also have meant years of preparation in paramilitary coordination in every region with greater use of the media overtly or covertly (e.g. smuggled smartphones) to tell our side of the story and recruitment of more locals everywhere. Our story is the truth about freedom and democracy and so should find some adherents in even the most brainwashed countries. These are just a few of the implications of a shift in policy away from wars and to far greater use of strategic micro-action. Serious students of military history might want to look up the guerilla techniques George Washington learned from the Native Americans, and the effectiveness of the German maestro of strategic micro-action Otto Skorzeny during WWII.

PS — The first release of this post contained the idea of an optimized surgical multilateral global cancellation of some debt. My lifelong friend since I was 21 Norman Hecht, one of my favorite geniuses, convinced me that this idea is too risky and under-researched to broach it without a ton more research, and that paragraph has been stricken from the article above. Now my curiosity to investigate the option has increased and I will be studying the input-output tables that exist to understand the ripple effects of any such drastic measures before bringing up the subject again.

Now Is the Time to Heal the Rift in America through Creativity in Compromise

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Volume 2, Issue 30

The election is over and Obama has a second term. Both parties’ base constituencies came out to vote, signifying high motivation that their side must win, which means a lot of people feel they have lost. Some of these people are not going to agree to bring the country back together, yet that is exactly what would be best for everyone as we move forward. It is all about how we handle the situation now.

Romney won among white males and in many States. Obama won the popular vote by about three million votes. In CNN exit polls more people want to repeal Obama’s healthcare program than to keep it, possibly largely based on hearsay, some of it purposeful disinformation. The consensus pattern suggests that Obama’s actions to date should not be predictive of what he aims to do from this point forward. His best move would be to acknowledge the arguments of the other side and seek new creative ways to postulate compromise concepts and action programs that can bring both sides together — enabling processes of refinement of initial concepts, where everyone gets to add creative elements to the final solutions so that everyone can feel parentage.

Romney’s speech in accepting defeat for his bid emphasized the right notions of how America can succeed, calling upon job creators to step forward and invest in growth. That would be the right guideline for the Republican Party in the next four years, and starting instantly, a quick winding down of negativity and a pulling together toward creativity and compromise.

Creativity is in fact the one thing that has still been missing. All we have heard are variations in ancient themes. No inspiring new ideas. Exactly the opposite of what is needed. Look at the world around us — it is full of amazing surprises in technology, lifestyles, new ideas in every field except politics. The American people want creativity in public policy too. Both sides need to retrain themselves to think, stripping back to start from fresh sheets of paper, reinventing themselves anew. Think the unthinkable. Pour out ideas without regard for taking credit, without attachment to seeming smarter than the other guy. We are one team, we have real challenges, and we must together devise the real new solutions that lie just beyond a fictitious barrier of our own making.

The real leaders on both sides are the ones that will propose new, positive and healing compromises in the days ahead.

The President hinted at the value of our dynamic differences in his victory speech, saying that people around the world are fighting and dying in order to gain the right to freely discourse their differences in self-governance. True. However, our political discourse has all too often fallen to name calling, and must be re-elevated to a Socratic dialectic that progresses to a commonly supported synthesis. Respect for those whose views differ from yours is the mother from which invention of new creative re-bonding ideas spring. Lack of such respect is infertile ground for creativity. Do not be put off by the extremists on the side you consider to be the other side, listen to the moderates on the perceived other side for inspiration of your own creative ideas that might succeed in bringing us together. Let the American people share in the creative process and bubble up grassroots ideas for leaders to build upon.

In this spirit of America, we will in the very near future add THE DEMOCRACY CHANNEL to this blog, as an adjacent page on which we seek your ideas for solutions to the challenges faced by the country and the world. We will reach out to academics, think tanks, students, writers, and the general population, and we’ll publish the ideas we feel are truly creative and can potentially heal the rifts we have formed out of our genuinely differing perspectives, ideas that can solve the challenges the human race has created for itself.

Please embrace healing in your own life so that it may radiate out — as from pebbles in a vast pond.

Best to all,

Bill 

PS – Next week the Smart TV Summit is being held in San Francisco with over 150 major names registered so far. I’m speaking on a panel about the future of television and also presenting research relevant to the future. Hope some of you can make it, let’s have a drink too. Cheers, Bill

America, the New World

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The name America is widely believed to derive from Amerigo (Americus in Latin) Vespucci, a contemporary and eventual friend of Christopher Columbus who not only explored unknown regions of the “New World” but who also invented a system of computing exact longitude and arrived at a figure computing the earth’s equational circumference only fifty miles short of the correct measurement. Quite a feat in the early 16th century!

While no one knows for sure where it came from, the first documented use of the name America was in 1507, when Martin Waldseemüller produced a world map on which he named the new continent America after Vespucci’s first name, Amerigo. More on this fascinating story can be found here: http://www.uhmc.sunysb.edu/surgery/america.html.

Tracing the etymology of Americus, I found the Middle English “yreke”, where its context was something like “as if to rake up the dying embers and thereby release a flame.”

The USA spiritually reawakened the freedoms of belief, speech and assembly associated with higher philosophical/ethical aspirations, among other things. For when people get together and converse openly, wisdom evolves, self-awareness develops, and there is potentially more time spent in the states of Observer and Flow.

We raked up the dying embers of idealism and released the flame in American hearts. While we have no exclusive lock on that product category, America’s purpose was and is to be the house on the hill — the moral high ground. We are the heroes, the good guys in this movie.

Today, having overspent for decades, it is finally catching up with us. Remember all the good times we had? Weren’t they all great? Weren’t they all worth it?

What is “it”? Why, it’s the current comeuppance of suddenly discovering that credit card bills have been piling up in some mailbox we forget we had and now we owe 55 trillion dollars and the number is growing every second.

We are not looking very heroic right at the moment as we use TV and all other media to keep up on how our leaders are solving this crisis.

Most of our leaders and other officials we see head-shots of in the media seem to be yelling at each other and jockeying for position in such a blatant way as to intentionally send the signal to the people that they better get used to it. There is no accountability, it’s all too complex for us so if you were to revolt you would find yourselves back where you are now with nothing more than tragedy as your gain.

The candidates who seem to be different from that norm are the true heroes and many of us vote for such folks whenever we see them. We need to be more informed to vote better, studying more about the lesser players who need our votes too. This will do some good in the long term but will not help with the current economic crisis.

This is a world-wide interconnected economic crisis different from any before, although we like to classify it into the familiar pigeonhole of recessions and The Great Depression. In fairness there are similarities and there are differences.

The important difference this time is in the forecasting of the next 20 years.

Government forecasts have turned out to be too bullish all too often. Happens as frequently there as in business. People make assumptions about how hard they are going to work, how effective they are going to be, how well everyone else is going to help them, etc. After all, what is the alternative? If you put out a realistic (negative) forecast sometimes you lose the investors entirely, or get replaced by other people.

The realistic forecast going forward is that we are going to pull a rabbit out of a hat and get out of relative restriction on our capabilities including enjoyment (that is what economic cutback equates to) in less than 20 years. That is the challenge. That is the game.

If we are in Flow half the time the chances are we could do it in 5 years. Just a SWAG.*

We have to start considering entirely new ideas because we have made the dead horse floggingly unrecognizable on the stale ideas we constantly go try to resuscitate.

Totally new ideas.

If not now, when?

Minds must be opened. Zero-based thinking.**

Examples below are just to prime the pump. Maybe some of what follows could be refined into workability, but my point is to get everyone pitching in with new ideas to get out of the economic hammerlock in the shortest time and with least suffering.

Scenario A: Government creates an innovative plan and assembles the richest people in the USA. Presents its plan. How they benefit. How the people benefit. Reminding them of Thomas Jefferson’s belief in enlightened self-interest. Yes, the richest people bail out the USA. What they get out of it is more than just a fair return — the psychic diet from their citizenry brethren turns from nearly homicidal to respect and nearly awe — because they handle it with grace and turn back a percent of their gain, to the people. Possibly in the form of grants/investments on a Digitally efficient basis (i.e. Internet-based process like Facebook with spreadsheets) to vetted people below the poverty line who have entrepreneurial ventures in mind.

Scenario B: Government creates an innovative plan and assembles the leaders of all of the nations of the Western Hemisphere. Presents its plan. How they benefit. How the people benefit. The neighbor countries and the richest people in them bail out the USA. What they get out of it is more than a fair return — their countries get the highest technology not only today but forever, and their economies and quality of life are destined to shoot up. The individual robber barons do not lose their seat if they and their people can establish fond relations. In a few cases, Cuba for example, they might decide to go their own way and not be part of a new sovereign meta-nation called either THE UNITED STATES OF THE AMERICAS or THE UNITED NATIONS OF THE AMERICAS or simply AMERICA.

It might become known colloquially as The New World for a time in the press until the term is over-used.

The name America was after all, first applied to mean the entire landmass with surrounding archipelagos — which in this scenario becomes a single nation — and was on the first map to include the name America, actually specifically applied to what is now Brazil.

The Naming of America

From http://www.uhmc.sunysb.edu/surgery/america.html#vesp-map

Imagine the complementarity of all of the Western Hemisphere united. The economies of every nation in the world would benefit.

The leading question of the New Founding Fathers would be, “Now that we are back into manufacturing, how do we optimize this driver?” Roboticizing plants south of the previous border will be one obvious part of that future choice.

Good companies in other countries will be provided favorable terms to invest in new plants and offices in the new America.

There will be a billion citizens in the new nation.

What a market to sell to! The New China.

Pan-Western Hemisphere networks such as CNN will be the first beneficiary of The New National way of looking at media advertising. The beverage companies will probably be the first to make buys across the Americas with a single deal. Everyone else will follow. Other networks hasten to catch up.

What buying power in terms of taste for foreign goods, and what self-reliance on everything from oil to metals of all kinds. We will be winding down use of oil anyway, in a specifically staged wind-down with tax breaks given to whoever can help it along.

Of course the new meta-nation still has debt. Not just the USA, whose ratio of external debt to gross domestic product (GDP) is 99.9%. Canada’s is 71%, while Mexico’s is only 23% and Brazil’s is only 19%.

The US debt share to the average citizen in the US today is $47,559 and rising every minute. Diluted by far lower debts per citizen in the rest of the “New World”, the average US citizen share after the merger will be probably half or lower.

But those are abstract concepts anyway. What really counts is getting people back to work, and the excitement of new opportunities for business and trade suddenly abounding as there are fellow citizens you never had before who want stuff you have, and you want what they have, and the rest is details to be worked out.

When companies cannot grow by internal revenue growth and increased efficiency, they grow by merger and acquisition. Perhaps there is a lesson in that for nations too. Mergers where all parties are in favor of the merger — in sharp contrast to Imperialism.

These are but the first two crazy ideas. I have more crazy ideas as to how to bail out the US debt.

Scenario C: Individual productivity bails out the US debt. The US government goes on an efficiency tack in all departments and nooks and crannies. Instead of cutting jobs people are able to accomplish much more. New business management processes ensure this is not wheel spinning but instead benefits the people. The efficiency is so great and the desire to not let people go provides opportunities to move people out of cubicles into “the field” where they can become case workers to help other people hands-on — teaching them marketable skills such as computer capabilities even including software development. People go back to work and the jobs problem goes back into the yellow zone again.

Scenario D: Crime bails out the US debt. Just by decriminalizing opiates (a small fraction of the total market for criminal drugs, gambling and prostitution) $65 billion could be diverted out of the underground economy and this would choke off “The Taliban’s principal and most lucrative source of income in Afghanistan [is its control of the opium trade].” † By decriminalizing all “victimless” crimes (drugs, gambling and prostitution) — we would exclude gambling involving animal violence or human violence (beyond pugilism and martial arts, etc.) — the total savings that would accrue for other uses in The New World could be significant.

This scenario could essentially bring our economies back to life much faster than in the current “wait it out” scenario, which is the path we are now walking until somebody has a better idea. It could be you: explore your mind and see what you find. Happy to publish your ideas here unless they are too crazy even by my standards, which would be going pretty far. All ideas contain some seeds of positive possibility, even the terrible ideas we have played with in history — we went there because we saw the germ of good in them but didn’t realize the downside fallouts. The same could apply — must apply to some degree — to all ideas including my scenarios above, which are intended as illustrations more than proposals. Illustrations of how we must take off the shackles and blinders and let ourselves envision many options that otherwise will never be considered.

Let’s step forth and be the ones who start the new positive constructive spirit with open minds and all-inclusive hearts.

Some might see it as a new spirit. Some might recognize it as the original American spirit. It might be the spirit that existed before time.

The spirit that steps out in the direction of the ideal with the intention and conviction of success.

That spirit is in all of us.

Let’s tap it.

Now would be a good time.

Best to all,

Bill

 

* SWAG = Scientific Wild Ass Guess

** Like zero-based media planning, meaning you ignore what you did last year.

† Source: “Warlord, Inc. Extortion and Corruption Along the U.S. Supply Chain in Afghanistan,” Report of the Majority Staff, Rep. John F. Tierney, Chair, Subcommittee on National Security and Foreign Affairs, Committee on Oversight and Government Reform, U.S. House of Representatives (Washington, DC: June 2010), p. 39. [http://drugwarfacts.org/cms/?q=node/38]