The further to the left or the right you move, the more your lens on life distorts.

Wednesday, March 11, 2009


I’ve been giving change a lot of thought lately. After all, we’re witnessing profound changes in our economic structure, monumental changes in the technologies that will drive an economy that will emerge at the end of our troubles, and political change that is emanating from the Obama administration.

In my view, change is like a vector. It has a direction and a magnitude. If you try to apply two or more changes with differing directions and magnitudes, the end result is a vector summation (if you’re not an technologist, I’d suggest a Google search for more information on vector sums). In fact, the summation of the change vectors may result in little if any forward progress if they work in opposition to one another.

President Obama campaigned on change, and it appears that he does not want to disappoint his supporters. So he works to change the way the federal government intervenes in a severe recession; he suggests that we need massive education reform (change) at significant cost; he is committed to changing our health care system in profound ways, and he has suggested that we need to change our energy architecture significantly. And he wants to do it all—right now.

Each of these changes has a direction and an magnitude (in terms of societal impact, implementation costs, and unforeseen consequences). It appears that the Obama administration wants to apply all of them at the same time. And that, I think, is a major mistake.

It can be argued that each of the changes the President wants to make has some justification. But it is reasonable to question whether it is wise and economically responsible to apply them to a country with a battered economy. As a society, we have been pummeled a bit and what we need now is stability and slow recovery. Not roiled markets, business upheaval (with the resultant lack of job creation), and general uncertainty fostered by change itself.

Wretchard of the Belmont Club comments:
Maybe part of the reason the White House is frazzling itself into the ground is that they’re trying to remake everything. Everything has now become part of the delta. Everything is changing. Now they are facing the revenge of the second derivative: the rate of the rate of change. They are trying to restructure the government so it is run with Czars instead of cabinet secretaries; “engaging” hostile nations with little or no preconditions and getting blown off; changing the basis of the economy to conform to their untried vision of the future; creating the single greatest expansion of government since FDR; redesigning health care; holding consultations on everything and planning to save the world from Climate Change. They’re busy because crisis creates an “opportunity” for their own vague revolution.

The cumulative consequence of these actions is a vast increase in the amount of risk the entire system has to endure because variables are being added faster than they are being solved. The margins are gone — removed by design. The margins are in the way. But while things might hold together for so long as the road ahead is smooth, what happens if things hit a bump? What happens in the Obama administration, too preoccupied to “even fake an interest in foreign policy meets a sudden challenge?”

Even active supporters of the President are expressing unease with an unfocused “stimulus” that is only one of a number of transformative “initiatives” suggested by the White House. Tom Friedman
It’s always great to see the stock market come back from the dead. But I am deeply worried that our political system doesn’t grasp how much our financial crisis can still undermine everything we want to be as a country. Friends, this is not a test. Economically, this is the big one. This is August 1914. This is the morning after Pearl Harbor. This is 9/12. Yet, in too many ways, we seem to be playing politics as usual.

He later suggests that “Great and difficult crises are what produce great presidents, so one thing we know for sure: Mr. Obama’s going to have his shot at greatness.”

But if the President is not careful, patient, and controlled, if he refuses to understand that too much change applied all at once increases the risk of recovery and the stability of our economy, he just might crash and burn. He can blame the past administration for a while, but if things are not better in 2010, even his most ardent admirers will begin to grumble. That’s how one-term presidents are made.

Obama is a lawyer and his understanding of politics is impressive. It appears, however, that he would be well-served to take an elementary engineering course, where he’d learn a bit about vector sums. In the end, too much change, too soon, may be his undoing.