With families deep into vacation season, setting off with the North American tradition of the grand road trip quest, somebody somewhere is probably asking: ‘Are We There Yet?’
That same tiresome question is being asked by economists and public policy experts in attempting to assess the health and future direction of the entire global economy, but more especially the North American economy. What makes this more fun is that the grown-ups (if we allow economists and public policy experts to be ‘mom’ and ‘dad’ for a moment) driving the car do not necessarily agree on which route take to get to our destination. Just like sitting in the back seat and pretending not to listen or taking sides in the argument going on in the front of the car, it does allow of some fascinating and at times entertaining ‘discussion.’
One venue for these fascinating discussions is the Munk Debates, where four prominent speakers debating the merits and drawbacks of increase taxation for the most wealthy citizens. Another heated discussion is the debate on the merits and accuracy of the research and work of Carmen Reinhart and Kenneth Rogoff best reflected in their book ‘This Time is Different: eight centuries of financial folly’ (which was profiled in a April 2011 blog). Their work was challenged by a graduate student (it is always those pesky grad students) and found that some data points were missing which skewed the conclusion that excessive debt leads to slow economic growth.
As with all things involving human values and assigning social goals, the truth falls somewhere in the middle. The problem in our media-frenzied world of absolute truths and sound bites is the need to both overstate positions and refuse the more the open-minded debate style (which allows for the possibility that anyone of us could be wrong, or that essentially we have an important point to make but that there could parts of my statements or beliefs that could require correction or reassessment). Such a debate requires a society of trust, respect and tolerance of different points of view; I am not sure in this ‘gotcha’ world of hyper-politics that is possible. But at least we now know where we would like to go and ask the ever important question: ‘where is the next gas station?’
For your personal summer road trip:
Bethany McLean and Joe Nocera,All the devils are here: the hidden history of the financial crisis.
Gretchen Morgenson and Joshua Rosner, Reckless endangerment, how outsized ambition, greed and corruption led to economic armageddon.