The Intelligent and Creative

I often say that the solutions to this crisis aren’t simple. Yes we need to curtail spending, but we need to get the timing right. Yes we need to raise revenue, but raising taxes is not the solution. This is such a complex situation that sometimes it is hard for me to convey my thoughts. A lot of different trends are converging and there is no way to know exactly how this all will play out.

I know I give our leaders a hard time and call them morons, but I don’t mean this literally; obviously they are intelligent. My point is that their mode of thinking is fit for a different era. They are the lawyers. They are the accountants. They are the type of people who excelled in multiple choice tests. The only problem is that the options our leaders are choosing from are all wrong. Why? Because this crisis has no precedent in history. For example, has there ever been a global sovereign debt crisis on a floating exchange rate system? Has there ever been a true reserve currency of the world before the dollar?

You have to think differently to connect the dots and see the big picture. In America we favor book learning, which I saw first-hand since I went to an “elite” high school. My social circle is therefore composed of people whose IQ’s were in the top 1% of the country; unfortunately most of them are utterly clueless when it comes to seeing the big trends. Don’t ask me why. Ask them to answer multiple choice questions, they excel; ask them to think holistically and interpret disparate pieces of information, they crumble.

Anyway, let me give one example of a trend where people are just not connecting the dots. Everyone knows that we went from the agricultural age to the industrial age to the technological age. Everyone also knows that each evolutionary step in our economy led to disruptions. Now let me ask why people don’t realize that the long-term unemployment we are witnessing now is part of another shift in the economy.

The specialization of labor coupled with improved modes of transportation led to domestic jobs being lost to outside competitors. The same thing is happening now, except now we are talking about the internet, not ships or airplanes. Lower cost labor (aka outsourcing) is really starting to hurt our economy. White collar jobs that required an education and specialized knowledge are not as bullet proof as they used to be. The rest of the world is attaining the same knowledge-based skillset, but offering it at a much cheaper price. There will be a period of pain until we adjust as an economy.

Most people are skeptical when I say the U.S. is going to lose its status as the financial capital of the world, but we will, and much sooner than you think. BOA just announced they are cutting 30,000 jobs; believe me, this is just the beginning. We need to understand the changing global economic landscape and adapt. We need to see the obvious and make logical connections. We can not rely on textbooks to get out of this mess; we must use our brains.

We will never solve this crisis by relying on intelligence alone; we need intelligence mixed with creativity. We need to question our assumptions and try new approaches. We need to see the big picture and stop focusing on inconsequential details. Only then will solutions to this crisis arise.