Cyreenik Says
Here is an editorial in the Oct 22nd Wall Street Journal entitled Our New Paymasters. It is talking about the Obama Administration's new plan to regulate banker pay. I agree with the editorial that this is a bad idea, and it isn't fixing the problem.
It is, in fact, a good example of emotionally satisfying solution trying to fix an analytical problem: it is... A Blunder.
As with all blunders, this solution is going to be much more expensive than it looks to be at the time it's implemented -- at least ten times more expensive.
As the editorial points out, the most obvious workaround for this bad fix is for gifted people to walk away from this solution.
The problem with that is that there are a lot of competitors for financial busines -- it's big business for a reason. It is also a fungible business -- you can do finance anywhere in the world.
The big damage I see coming is that the finance business will not migrate from one Wall Street building to another one down the block, but to Shanghai or Mumbai.
I say this because recessions are times when dreams change. And the American government, media and people have been distracted from thinking about Growing America by a decade-long obession with protecting America from terrorists.
If Americans don't return to thinking long and hard, every day, about growing America, about doing things in new and better ways, then we will become an average nation, not a special one, and this recession will be looked upon as the signal that America was ready to become average, no longer outstanding.
Adding extra penalties to bankers for taking risks is not a good choice for making an outstanding America.
On October 15th all of America's news channels were mezermized with the Balloon Boy incident. Richard Heene in Colorado called 911 reporting that a balloon had taken off from his backyard carrying his six-year-old son, Falcon Heene, into the wild blue yonder. The balloon came down empty, and half a day after the drama started, the boy was found at home in the garage attic.
Hoax? Maybe. Hoax or not, two days later, as I write this (Saturday), people that watched this drama and the media that couldn't look away while it was happening are looking for blood. Jim Alerden, the local sherriff said, "We were looking at Class 3 misdemeanor, which hardly seems serious enough given the circumstances. We are talking to the district attorney, federal officials to see if perhaps there aren't additional federal charges that are appropriate in this circumstance."
Why all this bad blood? Two things are powering the emotion in this situation: The first is photogenic, heart-strings grabbing novelty -- it was great news because it was strange, easy to report on and had children in danger. The second is embarrassment. Now that it no longer appears that this was drama, the news and government people who reacted so dramatically to it are embarrassed.
Is it Blunder Time?
It is, indeed.
Lets watch and see what kind of big expensive mistake falls out of this.
This is a splashy but textbook example of personal panic in action. Joe Halderman needed money for some reason, from what I read, a divorce settlement was looming as a huge money pit that he didn't think he could crawl out of. This was a scary, novel, and stress-causing situation for him. He reacted by panicking, which lead to his ill-planned extortion attempt: A Blunder. It was clearly a blunder because he was so easily and deeply discovered to be involved, and it's going to be hugely expensive for him.
This is also a good example of a blunder chain. Not only is he getting damaged, Letterman was faced with a scary novel situation as well, and he is getting damaged by the blunder, too. We will have to see if the blunder chain ends here, or not.
Human communities share a tendency to get over-excited about something. What to get excited about varies from community to community, but having one or two panic button topics seems to be common.
When the community chooses to act hastily on these panic button topics, it is engaging in witch hunting. In America, a good sign that a witch hunt is in progress is when media bring up a new scary or outragous topic, that is also an emotional hot button topic, and politicians take action on it within weeks. That action is often a blunder.
One of the places emotions consistently run high in modern America is over children. Shout "Save the children!" and watch blood pressures soar and analytical thinking turn off.
A Wall Street Journal editorial entitled A Destructive Toy Story made in Washington gives a good example of a blunder that grew from the saving-the-children emotion and the novel food-taint and lead-in-toys from China scare of 2007-8.
In a nutshell, the blunder was the passing of hasty legislation that is resulting in a lot of surprising and unnecessary expenses in activities ranging from manufacturing and retailing through library book choices.
The health care debate has gone on for months now, and as it goes on, the points being talked about and suggested are changing constantly. Let me hold this up as a good example of a not panicking and not blundering situation.
In this case, we are dealing with a complex issue, and dealing with it slowly, in a reasoned fashion. There is lots of emotional heat, there is a lot of name calling and cheap shots being taken, but there is nothing involved which is driving the community to a hasty decision. These are the conditions under which judgement thinking and business as usual ways of solving an issue do their best.
This is also the way enfranchisement on the issue is best preserved -- many people are involved and have had a chance to make their voice heard. Whatever comes out, much of the community can buy into the solution and support it.
All in all, this is kind of decision making that is the best at avoiding blunders.
Let me add, as some personal advice to the people deciding this issue: When a project gets this complex and messy, it's best to break the issue down into smaller parts and deal with those on a one-by-one basis. Health care is too big and complex to be dealt with as a single topic.
-- The End --