CHANGE DOESN’T COME FROM THE TOP

Patricia of Patricia’s Wisdom, one of our favorite visitors to Passing Thru,  has put up two great summaries of ideas from Agenda for a New Economy, by David Korten.  You can find them here (Understanding Agenda for a New Economy) and here (The Case for Eliminating Wall Street).  She found so much that was interesting in the book that she’s planning more, so make sure you subscribe to her blog to get them, if you don’t already.

agenda-for-a-new-economyI’ve not read Korten’s book, but since I was the lucky recipient of a generous Barnes and Noble gift card from Pete’s parents on my birthday, I’m going to go get it.  Those who know me will also realize that’s not going to stop me from commenting and expanding from Patricia’s summaries of the points in the book, though.  🙂

Before I do, a little bit of context.  I pretty much got through Economics 101 in college by the skin of my teeth.  I can still hear the professor droning on and on, and remember the helpless feeling of not understanding the relevance to my world as it was at the time.  Honestly, teaching economic theory to kids who have had little participation in the economy, such as working in real jobs or starting their own businesses, is ridiculous.

midget-mechanic-by-burma-lay Upon just what relevancies and to whom do we assign economic theory’s application?

Here’s what we do in our system.  We, via our colleges and universities, indoctrinate and regurgitate earnest MBA’s and lawyers into the maelstrom of politics, business and finance.  There they are quickly given the keys to drive the machines that comprise the nation, sometimes even with a map but certainly with little to no behind the wheel experience.  And most importantly, while they may be able to identify the various parts of the economic or political engine, they don’t know how to fix it.  In essence, we give our car to a rookie mechanic who can’t do the repair, but still charges by the hour with no end in sight.

I’d never taken an accounting course, never run a business, never even had savings of my own to manage. I stumbled into a job at Salomon Brothers in 1985 and stumbled out much richer three years later, and even though I wrote a book about the experience, the whole thing still strikes me as preposterous… – Michael Lewis

panic(See Liar’s Poker and Panic: The Story of Modern Financial Insanity, both by Michael Lewis, which we discussed here in “Tenacity” and here in “Panic”; Timothy Geithner; and yes, even Barack Obama.  Some of you will stop reading now, and that’s okay.  We’ll see you another time.)

Patricia tells us Korten advises that corrective adjustments as promoted by the flawed establishment will not fix or even stabilize the economy.  Rather, Main Street values are what create real wealth. Korten defines Main Street values as “local businesses and working people engaged in producing real goods and services which provide a livelihood for themselves and their communities.”

From Patricia’s summaries, I wasn’t clear on whether Korten was an observant chronicler or offering up a manifesto. There appeared to be somewhat of a blueprint emerging from the points Patricia enumerated, but I’ll have to read the book and the summaries she continues to post to be sure.  However, I believe the forces he mentions and the shifts or resets that result are already in play.  See our discussion of “Small” from last October.

small-is-the-new-bigThere is the voluntary simplicity movement, the trend toward buying and eating local, organic and micro-farming (on the front page of USA Today yesterday!), Seth Godin‘s “Small is the New Big,” Howard Lindzon‘s “too small to fail,” and a host of other associated ideologically-relevant phenomena that comprise the shift.

The most interesting component of the shift is that we have the simultaneous ability to function in a fluid environment comprised of both micro and macro, most notably promoted by the global characteristics of the internet. So the connectivity and intimacy not only takes on a new dimension, but a different span than in the past. Example: the Iranian uprising play-by-play on Twitter.

greed-is-goodIn Patricia’s second summary, Korten defines Wall Street-based economic goals as building upon wealth disparities in economic populations.  Further, Korten appears to believe that the heights of polarity achieved via economic and political empire building are the genus of the victimization of the middle class.  Specifically, he mentions religious fundamentalists who demanded lip service to a socially conservative agenda, neo-conservatives who built the military machine, Libertarians and Wall Street corporate interest.   (Now Korten’s going to lose some readers.  That’s okay.  I’m sure he won’t miss you.)

There’s no doubt that the bankers’ joyride of buccaneers and privateers occurred with much pillage and plunder, but Korten paints with a broad, blaming brush.  Whenever the Blame Game is played, victimization isn’t far behind. Sorry, Mr. Korten, you’re gonna lose me every time with that one.

References to victimization of the middle class invariably lead to the notion that its members somehow need to be rescued, primarily by the imposition of well-meaning, yet ultimately draconian reorganization and regulation.  If the middle class needs to be rescued, it’s only from itself and the notion that it is no longer self-determinant.

Assignment of responsibility for mistakes and wrong-doing is essential for learning, and to some degree, focus on punishment for the wrong-doers is also necessary.  But, the preponderance of blame ascribed by a noisy segment intent upon change for the sake of change is impeding real progress.

Currently, the Blame Game is a cunning distraction from the realities of the ineffectual.

game-over-by-jaygoobyPromoting this type of change – and I would mean change for change’s sake at any cost, which we are seeing in voluminous measure at the moment –  is more self-justification than anything. As in, having to justify the trust of the electorate or shareholders by doing Something with a capital “S.” It seems like we’re hearing a lot of “this was wrong,” “we inherited a bigger mess than we thought,” “evil corporations and greedy people control a finite pie,” etc.

The problem with this, as Korten seems to admit (and again, I’m going from Patricia’s summary) is that no one knows the size of the pie. What if the pie is infinite? What if we all believed the pie is infinite?

who-ate-all-the-piesIf the pie is infinite, there is no need for redistribution. It wouldn’t matter what you have or didn’t have because there would always be more.

It seems to me that this country was founded on infinite opportunism from which infinite possibilities manifest in abundance. Subsequently, wealth and riches ensue: wealth and richness of spirit as well as lucre.  It has been true throughout my lifetime that I could wake up any morning and always have another chance.  Frankly, that’s all I think anyone should require.

However, from a top-down policy standpoint, the only nod to an infinite pie I’m seeing at the moment is the government’s ability to print more currency to sustain itself. That isn’t what “wealth creation” means to me. 🙂

I don’t think anyone needs convincing that change is necessary for progress. Change, however, doesn’t mean throwing the baby out with the bathwater. I think we are seeing the policy-based fruits of such political and economic naivete on a daily basis.

stairway-by-g_-heydeGood change is more of an evolutionary stairstep approach, with a progression that builds upon existing practice and then levels off to let things settle. Nothing about what happened before in the government and economy is all bad, and nothing about what is happening now is all good.  Yet, that appears to be the current top-down message.

The most extraordinary change is being wrought on a day to day basis, and will continue to be, by fairly ordinary people. But that’s more like the daily breeze you notice coming from a different direction instead of a tectonic shift of cataclysmic magnitude as some would have us believe they are capable.

We’re in the midst of a big ole reset, to be sure, but it’s not ever going to be the result of top-down policy or strategy.   Instead, the change is here in the trenches, with ordinary folks just like you and me.  And I think the folks who think they are in charge are going to be sadly disabused of that notion.

Thanks to Patricia for always being such a fine thought provocateur.  🙂

Image Credit:

Midget Mechanic by burma lay

Greed is Good by Man met bril

Game Over by jaygooby

Who Ate All the Pies? by Roger B

Stairway by g_heyde

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Comments

  1. says

    Great follow through on my chunking down the ideas in this book. I am glad you are going to read the whole thing, because his history lessons and details about banking and human ignorance – about money and civic duty – are some of the areas he cleans up – I think if there is any blaming it is that the middle class just was along for the ride and not paying attention.

    He talks very personally how he and his wife got caught up in making phantom wealth when they came back to the USA after so many years working in other countries – until they realized what they were doing. It was very exciting/addicting and they understood economics and wall street!

    Of all of David’s books this is his easiest to read and comprehend – his stories are wonderful at creating understanding and ah ha!s…

    Everyday now someone comes to my office to see if our church has bailout money for them – churches in our area are now having financial advisers come and teach folks how to budget and get out of their woes…

    All 5 who have come this week so far have been woman, brought up in the middle class, bought a house too big, he left her and the kids, and she knows more about designer jeans than how to truly manage her money. They never even think about taking the bus….or walking…

    These are the folks that I think are the most scary right now…

    My goal was to inspire…hope we get some action here…and at PW? Thank you for sharing your thoughts and ideas….Korten is very excited about how bloggers are really changing thinking and our future.
    .-= Patricia´s last blog ..Part II: The case for Eliminating Wall Street =-.

  2. says

    I cannot agree more on concentrating on the main street values.

    Anything we can do to promote the “local businesses and working people engaged in producing real goods and services which provide a livelihood for themselves and their communities,” is the way to go. Why would anyone think otherwise?
    .-= Jannie Funster´s last blog ..Flying By The Seat Of My Soul: A Review =-.

  3. Betsy Wuebker says

    Hi Patricia – I appreciate so much your dissemination of this book. Your enthusiasm has encouraged me to purchase and read it. And I agree, if there’s any blame it must rest with all of us who bear responsibility for electing the officials who are supposedly in charge, and placing our investments with those who massaged them into phantom wealth. It proves that human nature doesn’t discriminate – we’d mostly prefer that someone else do the hard work and it’s always tempting to get something for nothing.

    What galls me is those who supposedly are going to fix the mess continue to play the Blame Game, although they may have realized that this rhetoric has grown tired and isn’t resonating. They have yet to come up with other than changes in semantics.

    I agree, the ones who can’t seem to understand how they arrived in the predicament du jour, like your example of the hungry housewife in designer jeans are the scariest. When the going gets tough, we need to get tough and get going, not leave it to others. This will be a fascinating read, and I can’t wait to further the dialogue. Thanks again, Patricia.

    Hi Jannie – You are absolutely right, and it’s why I believe people nostalgically yearn for the old ways. The only reason we got “otherwise” is that we believed, through no small media influence, that the newest and most modern ways were always best. Now we know better!

  4. says

    Betsy,
    Our church is having a how not to foreclose on your housing seminar in Seattle on July 24th at Cleveland High School. David Korten is sending some amazing folks to help us help folks….feet in action. I am really excited now…I will be gone,but just a few phone calls and every church in the NW is sending folks to this because the need is so desperate and huge…action…

    Thank you for your good writing…wow the word is getting out and about…
    .-= Patricia´s last blog ..Part II: The case for Eliminating Wall Street =-.

  5. Betsy Wuebker says

    Hi Patricia – That is exciting! I hope even though you’ll be gone you can report on what’s being done! Thanks.

  6. says

    A lot of food for thought here, great stuff. The power has always been in our hands, the ordinary people.

    Somehow we forgot this, or we were distracted, more likely, by the glitter that those at the top have held before us like a carrot.

    Without us, they – the self-proclaimed monarchy – are nothing. Many of them would not know how to pump their own gas, for instance (I’m laughing to myself as I remember Oprah trying to figure out how to put gas in her car when she and Gayle did that special a couple of years ago!)

    It’s kind of a John Galt thing, but we don’t all need to run away to make it happen. We can just start making it happen, right here, right now.

    Rebuild, and make those at the top redundant. If they want to offshore our manufacturing, then we go smaller scale. Provide better quality products and impossibly great service that cannot be done in a factory far away.

    We have so many opportunities if we only open our eyes.
    .-= Brett Legree´s last blog ..the rocking chair. =-.

  7. says

    Hi Betsy – This book sounds fascinating and I do truly believe that any change now needs to begin at the bottom, with individual people like you and me. If countries like yours and mine are going to survive this economic disaster – we can’t go back to the ways that got us into it to begin with.

    It’s shocking to hear about the type of people Patricia describes. Hopefully this will have taught them to educate themselves a bit better in things that truly matter.

  8. says

    Oh Betsy – how do I love this blog post? Let me count the ways…. 🙂

    I was one of those hapless college brats who majored in economics back in the 1980’s. I’ll admit, I learned a LOT more about business in the following 4 years of working in advertising than I did in the “hallowed ivy covered halls of learning.” However, I wouldn’t say those classes in economic theory were wasted – instead they were seeds that have flourished and grown over the years.

    Unfortunately, I see the current “thinking” at the top as an overwhelming sense that “We the People” aren’t smart enough to find our asses with both hands. I’ve been watching with horror at some of the proposals that have come out of Washington lately and frankly there isn’t any news that doesn’t frighten me.

    I’m feeling like Will Ferrell’s character Mugatu in Zoolander where he screams, “I feel like I’m taking crazy pills!!!” His outburst was over how Ben Stiller’s singular facial expression was being defined as several different “signature” looks… while mine is outrage over the proposed “fixes” the government has in store for problems that are best worked out in a free market.

    Anyone who wants a history lesson AND a lesson in how “top down” management of the economy doesn’t work just needs to study Johnson’s handling of the economy back in the 1960’s. Am I the only one who studied and wrote papers on the phenomenon known as STAGFLATION?
    Stagflation was the result of “top down” management style that gave us the unheard of phenomenon of high inflation AND high unemployment. (Prior to the 1970’s – when STAGFLATION occurred – you chose your poison – either high inflation OR high unemployment. Suddenly, thanks to excessive government intervention – we got BOTH!)

    Of course, the American Economy is like a huge ocean liner – it’s so large that it doesn’t turn on a dime. The economic policies enacted by Johnson didn’t make their full impact until Nixon’s presidency. Policies enacted by Ronald Reagan didn’t gain full “steam” until late in Bush I’s presidency. It’s like a there’s a huge delay button on the actions of the government in the economy – the changes we make today don’t take effect until several months – even quarters – down the road.

    In other words, we’re currently reaping seeds we’ve previously sown. Seeing some of the seeds our current “country’s management team” are planting scares me to death. Government control of the financial sector?

    Read the definition for “government” at the economist.com!! In there, is the phrase: “Since the 1950s, there has been growing evidence that government intervention can also be flawed, and can often impose even greater costs on an economy than market failure.”

    HELLO!?!?! Can our current mangement team not read a basic definition at a free website?

    We know what happens when we stick tab A in slot B? We’ve tried this stuff before – although we’ve never allowed the government to actually BUY stock in a poorly run business.

    BTW – There’s already a “real” crisis around the securities issued to banks as a result of the “bail out”. How do the banks repay this money? OOPS!! We don’t know. Jim Cramer of Mad Money is advocating selling them like T-bills in the open market… but this means the government is becoming a business – a competitor!!! ACK!!!

    Sorry to go on and on. This is why my family won’t allow me to watch television anymore!!!
    .-= Kathy | Virtual Impax´s last blog ..Social Media: It’s a Moral Imperative =-.

  9. says

    “Main Street values are what create real wealth.” So true. I find myself turning away from the politics and hype to just do what I can with what I have going for me at the time. If that’s lend some money to a friend, send an encouraging email, or write something online, then that’s enough until the next time I can make a positive impact.
    .-= Lori Hoeck´s last blog ..‘Think Like a Black Belt’ around the web =-.

  10. Betsy Wuebker says

    Hi Brett – You’re right, there is a lot of food for thought in these ideas, and it’s easy to see why Patricia’s excitement is so infectious. Like you, and incidentally the writers of the U.S. Constitution, I believe hierarchies only exist by consent. Lately, it seems like it is high time some people were reminded of that by either removing them from their elected positions, or by scorning their pretensions. Not that an entertainer might have legitimate opinions outside his/her industry, but please…we’ll think and work for ourselves, thank you. Micro-economies, as you say, can circumvent constraints. Thank you.

    Hi Cath – I don’t think you can teach someone to educate themselves on matters unless there is a vested interest in their doing so. The women who arrive at a church for a handout in designer jeans were willfully ignorant. In my opinion, there is no excuse for ignorance because you’re so comfortable it makes you intellectually lazy. I view these times as exciting because of the opportunities to innovate and create. Thank you.

    Hi Kathy – Pete and I agreed that you went to town on this one! Where to begin, indeed! The sense that the government is making it up as it goes along has never been greater. When we have deposed gurus such as Greenspan admitting they don’t understand what went wrong, well, what more can you say except, “Thanks, Al! Glad you’ve still got the house and Andrea, and that you can still eat at Le Cirque!”

    This all goes back to the need that politicians have to do “Something,” as I said above. Unfortunately, the megalomania appears to rule the day. One needs only to look at Pelosi and her latest manifestations of the “millionaire’s tax” to realize the elevator doesn’t go to the top floor. And health care legislation isn’t about Obama? Please. You’d think he’d listen to Hillary, who already tried that one. I’ve got a bridge that spans the River Hubris they all can bumble across after they pay me for it, with a history book on the other side. It is no secret that great leaders are students of history. Unfortunately with this crowd it seems we have a scant few, if any.

    The only way one can circumvent forced competition with the government is to refuse to compete. We see the seeds of this refusal in the recent reversal of the dealership closures. Suddenly, when we wield the clue bat and threaten incumbents with job loss, we get action that repeals stupid intervention. All of a sudden eliminating Main Street jobs in car dealerships isn’t such a bright idea after all, especially when we’re hovering close to the 10% unemployment mark on a national basis.

    I read yesterday that unemployment may reach 20% in Michigan, my home state. Currently it’s in the low teens. These numbers are misleadingly low, because they do not include the chronically unemployed who have left the search.

    What is the answer to this? You know I’m going to say good old fashioned entrepreneurialism! I’ve been evangelizing it for years, as have you. Only when we work for ourselves are we truly free.

    Turning to entrepreneurship would mean the former employee would have to assume greater risks and pay for health, life and disability insurance. What kind of independent health insurance benefit program would ensue if the self-employed would lobby effectively? Why hasn’t this been done? Oh….we’re too busy actually WORKING! Accepting nanny benefits from the state or our employers ensures we remain enslaved to the “other.” Thanks.

    Hi Lori – You are right! Our personal sphere of influence and the interactions we make within that sphere will always provide the most meaning. Choose relationships over things, and close-knit circles over the masses. I believe that politicians in particular do not make this choice, narcissists preferring more grandeur as they do. This creates more distance or warping in their personal relationships. How else do we explain the bizarre behaviors of many? I can’t wait to see your next post on narcissism and how we can guard against the toxicity. Thanks.

  11. Betsy Wuebker says

    Hi Jim – Yeah! and pound on those keys multiple times! And exactly, that’s what self-determination and the pursuit of happiness is all about. Thank you.

  12. says

    In essence, we give our car to a rookie mechanic who can’t do the repair, but still charges by the hour with no end in sight.

    I saw tons of people like that in corporate land, back ‘way back when. ‘Twas scary how people with zero common sense but lots of letters after their name were promoted time and time again…
    .-= Barbara Ling, Virtual Coach´s last blog ..#1 way to make money online with CommentLuv longterm – Part 2 =-.

  13. Betsy Wuebker says

    Hi Barbara – I saw it, too, and verily, I marveled! 🙂 The Peter Principle: “In a hierarchy, every employee tends to rise to his level of incompetence.”

    I just read this morning that anti-war Congresswoman Nancy Boyda, who walked out of a hearing that reported overwhelming success with the surge in Iraq, has now been appointed deputy assistant secretary of defense for manpower and personnel issues at the Pentagon. W.T.F. I’m kinda doubting that she’s willfully suspended her disbelief, yanno? Who’s next? A bin Laden as Terrorism Czar? A tax cheat heading up Treasury? Oh…wait. 🙂 Thanks. I’ll stop now before I really get going.

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