September 16, 2011

The Planning Fallacy - David Brooks NYT 09/16/11

David Brooks delivers an unwelcome but thoughtful message about the ability of government to manage and move a system as complex as the economy and the resulting disappointments of the governed. We are subjected to far too much political rhetoric these days that is based on the quest for power and control ignoring the reality of the economy's complexity. Brooks argues that, at its best, government is effective on discrete problems, but quick fixes to systemic issues with a myriad of influencing factors cannot be assured.

"...The key to wisdom in these circumstances is to make the distinction between discrete good and systemic good. When you are in the grip of a big, complex mess, you have the power to do discrete good but probably not systemic good.
When you are the president in a financial crisis, you have the power to pave roads and hire teachers. That will reduce the suffering of real people who would otherwise be jobless. You have the power to streamline regulations and reduce tax burdens. That will induce a bit more hiring and activity. These are real contributions.
But you don’t have the power to transform the whole situation. Your discrete goods might contribute to an overall turnaround, but that turnaround will be beyond your comprehension and control.
Over the past decades, Americans have developed an absurd view of the power of government. Many voters seem to think that government has the power to protect them from the consequences of their sins. Then they get angry and cynical when it turns out that it can’t." [emphasis added]

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