Michael Caputo of Minnesota Public Radio's Insight Forum started a discussion thread around our post on how to create jobs. On our off day here (we typically blog Monday, Wednesday and Friday) I wanted to share with you a comment I weighed in with as the conversation evolved. You can join the conversation yourself by going to the Insight page.
Right now our economy is trying to tell us something - our current approach to creating prosperity has taken us as far as it will go. Instead of our bi-partisan way of spending more, taxing less and printing more money to induce people to borrow even more money (trickle up, down and sideways too), maybe it is time we come to grips with the fact that Too Big To Fail is a bad policy.
It is a bad policy for banks, farms, energy, shopping and, yes, government too.
Government does have a role in creating jobs, but that role today is to devolve the command and control economy we have created back to a local framework.
This is not a call to return to the 1800's. Instead, it is a recognition that the "web" model works better than the "mainframe" model. Thomas Jefferson's vision of tens of thousands of experiments taking place in local governments across the country has been given new meaning by the degree of connectivity we have in 2010. Ideas can spread quickly. We need our nation to be a machine of innovation, and that is not happening in key sectors as essential parts of our economy are stuck in an inflexible, slow-adapting WW II model.
Legislators and executives in government need to step up and devolve power - both their own and the interests they protect - down as close to the population as they can. They then need to put their energies into strengthening connectivity of our systems so that the ideas and innovations that bubble up can migrate through society, be refined, improved, customized and adopted.
Then public officials need to embrace the chaos and creative destruction that comes along with this approach. They will have to resist the temptation to fix all ills, to further legislate a nanny-state solution to every problem, to protect the empowered against change.
Too Big to Fail has made us an homogenized society that lacks resiliency. It gave us tremendous growth for a time, but that's over. Today we're all vulnerable to the same things: higher energy prices, higher interest rates, higher import prices, inflation, prolonged unemployment, bankruptcy by illness, etc.... We've created an "all in" economy with no hedge, and we are paying for that now.
I realize that this is a radical vision of transformation, but it is taking place whether we embrace it or fight it. If we harnessed the strengths of this new approach and started to emphasize resiliency over growth, we'd see a stronger economy and a stronger America, one with more jobs and opportunities than have existed for some time.
If you want more on this type of thinking, there is a really good book I would recommend called The Age of the Unthinkable by Joshua Cooper Ramo.
You can also check out this brief clip from Nassim Nicholas Taleb that contrasts natural systems of redundancy to our modern system of economics.