Kall: Yeah, Malcom Gladwell; talked about the tipping point, and he talked about leaders too, and then there's that Piretto's Law, or the "Power Law," that's that "80/20 Law" and that kind of plays into this then, would you say?
Schwartz: Oh absolutely, but again I think that regarding this as a problem that there are some opinion leaders who set the table for the rest of us, really misunderstands that it's the solution to the problem, not the problem.
Kall: What do you mean? You just lost me there.
Schwartz: Well, having opinion leaders who set the table, so that not everything is on it, is for the rest of us the solution to the problem of having too many options. We get to see six or seven options, not six or seven thousand, and that's what saves us.
Kall: But the rub is in how those leaders make those decisions, which choices to present.
Schwartz: It's true, that's a problem, but that's a better problem to have than not having anybody do the filtering for you.
Kall: I'll tell you where I've been frustrated with Obama and his economic approaches is he does not seem to have really gotten into the full sense of what it means to take a bottom up approach; he's still really using a top down approach with handing over billions and billions of dollars for a few decision makers to sort out where the money goes, and it just seems to me that there ought to be better ways that those choices can be done. And then you've got your paradox of choice concept there...
Schwartz: And also a problem that he is facing is that timing matters and you're not going to get the infusion of assets into the economy fast, bottom up. To the extent that the experts and I'm certainly not one, agree on anything, they seem to agree that whatever you're going to do you've got to do it soon.
As confidence erodes, the problems just get worse and it feeds on itself, so you need to turn the ocean liner around as soon as possible and that probably means putting massive resources into the hands of a small number of people and the best you can do then is look over their shoulders and make sure they are not buying antique trash cans for their offices, that they're actually using the money in a way that will make things better for everybody.
Kall: Well, they killed any expenditures that look beyond a year, so maybe what they need t do is another plan that looks out two, three or four years.
Schwartz: I'm sure that's coming; I think were getting this stimulus in stages. No one says the current one is enough. Everybody seems to think were going to need at least another go round of roughly this magnitude. That is a problem and I think that rather than hit us over the head with a huge price tag all at once, we're going to get it in stages, and that's probably not a bad thing. I don't think that's an effort to deceive us, I think it's really that you use the evidence of the first pass of what seems to be working and what doesn't to shape what the second pass is going to look like.
Kall: And also to kind of shake the legislators into reality, because they sure didn't deal with it on the first round of that 700 billion under Bush, and they got a little bit better at it and put some accountability into it, but with all the prognosticators suggesting that things are going to get a lot worse, it's probably a good idea to have a wait and see and then take a real deep breath, (demonstrates) and then, (laughs) go after it another time...
Schwartz: Well, I think that's right and everyone was sort of frustrated that Geitner's plan was too vague and it wasn't focused; it seemed like there were lot of different things that they were going to do, but it may well be that that's the right way to be proceeding, frustrating as it is not to know exactly what the plan is. And are we going to nationalize some banks or aren't we? And what does it mean to nationalize exactly and once you've nationalized it, what do you do to unnationalize it? They are not answering those questions until they have to. I think.
Kall: I like the idea of nationalization; the way the Scandinavians have done it, where they take a company and nationalize it, clean it up, get rid of the toxic part of it and then break it up and then sell it and privatize it again makes sense to me not just for banks but we've got a number of different industries where the diversity has disappeared.
And one in particular for me is radio and the media. Look at what happened to the Tribune, the way it was acquired and it got so big, the whole process of acquiring it created such debt that it basically destroyed it, or it looks that way. And the same thing's happened with clear channel radio, with twelve hundred stations where they merged and merged so that you've got I think in Philadelphia here, where you and I are, there are half a dozen clear channel stations and we should go back to that rule of one station owned per metro area, but how do you get rid of the current situation? How? Nationalize it and then break it up and sell it.
Schwartz: Well, we can once again thank the surge of deregulation for all of this. I agree with you completely that this monopolistic control of the media is a disaster. It used to be-prevented, regulated out, but now these companies can do whatever the hell they want and so it's going to take a very heavy hand to reassert some kind of control and produce diversity in the media. I am more concerned with the demise of newspapers than I am with radio and I think that what makes that problem so bad is I don't know that anyone knows any more how to make money publishing a newspaper.
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