The Ebb of Ideas

One aspect of the current economic down cycle that nobody seem to care about is the shortage of ideas about the future. People are so obsessed with discussing the dire situation that coming up 5, 10, or 20 year plans for a better future is not in vogue anymore. Politicians generate empty statements about the economy and promise that one day it’ll get better. Pundits spend their time bitching about the economy, blaming everybody and generating predictions of doom and gloom. Chitchats with friends revolve around how the crisis affects our lives and how difficult it must be for Joe who just lost his job and his wife is due in two months. Office banter deals with the sorry state of the industry and the negative effect on the company.

No one, however, seems to spend time and energy coming up with viable and creative solutions that will not only get us out of this mess, but actually create a bright future for are grandchildren.

So why am I telling you all this? Not that I have a brilliant solution or anything. I’m just intrigued by the drought of positive ideas, wondering if it is an effect or part of the cause. The consequence of pessimism in the stock market is well known. But here we deal with a much wider system, involving every aspect of the global economy. Is it possible that lack of productive ideas about the future lead to increased interest in unproductive financial transactions, which in turn got the best brains deeper and deeper into trying to profiteer on the financial spaghetti they created? Once they embarked on creating complex derivatives, repackaging mortgages as securities, and relying on credit default swaps, could they have simply exhausted their ability to think about funding productive enterprises? Did it make them lose their famed ability to imagine and fund a better future? Bright people like Bernie Madoff spent their time and intellectual ability ripping off other people and taking advantage of the booming stock market, instead of channeling this energy into creating a better future.

The gradual decrease in IPOs in the last several years was blamed on many factors. What if one of the reasons for the lack of IPOs, and the fact that there’s no real alternative, is the same one outlined here? What if all brilliant financiers were simply too busy making money they just didn’t have time to do their job?

One Comment

  1. MB

    Humans have always been driven by fear and greed. In the greed phase of last 5 years – “brilliiant” financiers leveraged everything up, took huge bonuses out of the system, declared the economic cycle dead, invested in social NOT working – while the Bush administration and the regulators stood idly by. That doesn’t seem so smart now. Fear has taken over – of course there is no shortage of brilliant ideas now – but financing has evaporated, people are more concerned about the value of their home and if they will have a job next week and that cycle too will eventually be over – but no one knows for sure how long it will take. Obama has the right idea to promote investment in new ideas – but that will be hard to execute in an environment where trillions of tax payers dollars are being given away to preserve capacity we just don’t need. The sooner everything is reset at $0.50 on the dollar and we can get back to work on really productive stuff (not CDO’s) the better for everyone …..

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