Our mainstream media has been in panic mode for a couple of months, and in its continuing consternation, has clamored for the President Elect to rush, first and foremost, into naming his economic team. “Hurry up, and you better be picking some guys who understand numbers and the economy. We want experts. The best money can buy.” You turn off the news, and head off to bed confident that although a gloomy, almost mystic storm is brewing outside your window, all will be well. An Economist will figure it out. Some hours later your wake up call is the dawn sending rolling thunder that jolts your home to its foundation. You jump, wide awake, and in a cold sweat. “What the hell is an economist?” The sun is actually attempting to cast light through your drapes.
Once upon a time, "economist" was a term applied to an individual who enjoyed a certain conservative frugality to all human endeavors. Vestiges of that connotation remain with today’s definition, although these cannot be assigned to the modern economist in whose hands we appear to entrust our economic lives, those of our children and those of our grandchildren. Not that some of our more illustrious ancestors might not be addressed today as economists. Certainly Xenophon, Aristotle or Adam Smith wore the mantle well, in addition to being philosophers. Doubtless, each would probably be perplexed by the current definition, and even embarrassed by its most modern incarnation.
Our best known are too often staggering egos, rooted in analytical methods far from the disturbing notion of public discourse and sensibilities, but readily capable of pontification on the state of everything economic. Aided by the most powerful computational powers the world has even known, they interminably scrutinize the minutiae of fractions, macroeconomically dissecting our lives, creating hypotheses felicitous of one theory, or another that each might have subscribed to. The new breed of economist hopes that the consequence of his or her efforts might eventually dissolve into public policy. All struggle to be heard in one way or another, and a few get lucky.
Alan Greenspan for example, was much more than lucky. He was feared. He was clearly not as competent as he believed himself to be, but he was feared, as well as venerated. So discombobulated were four American Presidents on the state of their economies that Reagan, Bush Sr., Clinton and Bush Jr. each capitulated, leaving him insulated, permanently ensconced in office as 13th Chairman of the Federal Reserve. For 19 years Greenspan was arguably the most powerful man in the world, if you place money at the top of the human existence food chain.
Who preceded Greenspan? Paul Volcker, who will now be Obama’s eminence grise.
Aristotles, they are not, but let’s cast a slightly more discerning inspection their way, and toward the state of their art. Economists are human with any of the frailties the rest of us might also endure. They are also products of their educational systems, and environments limited by the very nature of economics. It is a vast endless field of study. Some concern themselves with wide global movements of goods, people and money. Others might specialize in capital ratios, dealing with banking regulations and interpretations on depository requirements, or the standards of capital and asset risk measurements, with specializations within each area. Others are preoccupied with inflation, and just to complicate matters all countries have individual methods of calculating capital within their boundaries, though they are confined to internationally accepted guidelines. Unfortunately, they either specialize, or they really don’t know anything, and become really, really dangerous.
It was anomalous that a few economists, during the bubble’s inflation, indulged quietly on the more dire economic possibilities, but their squeaks were obscured in the noise of the herd.
We assume that society’s Greenspans can not only be visionaries with insights into mathematical models, but can hover above the fray issuing profound prognostications on the state of our malaise. We assume a dream team of economists crowded around a new Commander In Chief of Change will blend their discordant mix of views into a powerful amalgam. One capable of charting a methodical path out of a labyrinth no one really understands, and no one is taking credit for.
Repeating platitudes on the perils of assumptions would be pointless. Through the kaleidoscope of our bank accounts we are witnessing the evolution of our own wreckage in slow motion.
The first clue as to why our modern day Aristotles of economics are not the oracles we sanction them to be, is that they deal with yesterday. They present the past beautifully, and with more clarity than the Hubble’s brilliant and awe inspiring images of distant galaxies as they existed billions of light years ago. As to what will occur tomorrow, or even later today, our seers are particularly inept. Specialization and compartmentalization are dangerous competences, particularly when compromised in insecure egos.
The second clue resides in the box that hides these enigmatic specialists of the statistical tables. They have perceptibly limited understanding of the nature that is human. The culminating pinnacle of their output is theory. Not practical, but obscure and probably intangible methodologies for hopefully enhancing efficiencies, or exploiting short, mid or long term trends and biases. Nowhere in the mix that is the economist’s alchemy, can we find a scintilla of any universal principals that might inject percepts of morality into their mental and computational gyrations. Their inclinations fall short on the E.Q. meter, and human nature is not in their catalogue of, “Things I’m An Expert In.”
Now for the third clue. It is not in the nature of the economist to be an entrepreneur. Time spent in research, and analysis also do not allow for long term commercial endeavors. Unfortunately, this limit understanding of where the proverbial rubber meets the road.
The most effective presence at the round table carving a new path out of the maze America is trapped in, would be an entrepreneur. One who has had extensive success in the commercialization of goods or services to the broad market over a sustained period of time. One who has demonstrated vision and creativity, as well as capacities to motivate individuals other than himself to reach unexpected productivity. One who in practice and not through vicarious imaginings, has been drenched in all elements that fuel the economic engine driving an economy.
Drawing the curtains to let the sun’s warmth fill the room, you remain hopeful, but know that as the morning news will announce yet another bailout package, you will look elsewhere for telltales of contemporary Voltaires in our midst.