Diagnosing Columbia

In an article published in February of 2010 in the Wall Street Journal (Senate Woes Flag Wider Disease), Jerry Seib claims that the inability of the Senate to solve problems “is merely a symptom of the U.S. political system’s larger dysfunction”, and then follows with observations on how relatively minor changes in system architecture, technology, and rules manifested in a reversal of priorities. Former Senate majority leader Howard Baker then concluded “I think it’s not working well. But it’s also a part of the system.”

Three years later the debt cavern from which we must craft methods to extricate future generations from has deepened by roughly the same level of historic liquidity at large U.S. based corporations. In the spirit of attempting to help prevent a series of crises from morphing into a constitutional crisis, as has been encouraged by prominent voices in recent days, thoughts from an architect long-working specifically on prevention of systemic crises may be helpful.

When seeking solutions to difficult problems, scientists often find it necessary to trace symptoms back to their origin. During the process of attempting to understand causal factors, solutions are often revealed that were otherwise hidden from our limited worldly view. The audit and solutions process requires laying down dogmatism and restraining hubris, a process that has been largely absent in economics, for truth has a remarkably consistent history of hiding beyond the confines of our knowledge, social constructs, ego, labels, and institutional conflicts.

Due apparently to a combination of natural resources, DNA, and system structure, the immune system of Columbia  has proven the most enduring of the village, but as the patient enters its mid-third century, it is faced with a mid-life crisis of sorts, considering for the first time the patient’s own behavioral impact on mortality with evidence-driven awareness that its lifestyle is likely unsustainable. In 2007, the patient was the source of a virus that quickly spread, suffering a multi-organ failure saved only by an ongoing course of experimental drugs that have proven highly addictive with serious side effects (QE), the long-term impact of which are unknown with few relevant case studies to draw from.

The systemic dysfunction in the financial crisis and U.S. political system quickly revealed that  causal factors include isolated cultures working with primitive governance systems that were lagging far behind technology, industry and society. The question then must be asked whether governance failures are the cause or yet another symptom, requiring further investigation and tracing to origins. Whether the cause of the governance system failure is from self-dealing, impact from lobbying, globalization, cultural malaise, primitive technology, or more likely a combination of collective pressures, the system architecture—or immune system, would have defended against the disease if healthy. The evidence of this is well beyond dispute.

Evidence of failure in all three branches of government combined with blurring of lines in the separation of powers, are clear signs that the disease is systemic and could therefore be fatal. The financial crisis contained remarkably similar characteristics to an autoimmune disorder, wherein the abnormal functioning of the immune system results in antibodies attacking the body’s own tissues. Similarly, the response to the financial crisis has resulted in attacking the healthy cells rather than those causing spread of the disease, which has then caused many unfortunate side effects such as systemic moral hazard, while the disease itself as evidenced by debt and deficits, continues to rapidly deteriorate, even if symptoms have subsided. The goals in treating auto immune disorder can be applied to the goals of economic crises; reduce symptoms, manage the autoimmune process, and work to improve the body’s ability to fight disease.

While state-of-the-art technology now provides the tools to perform these tasks in governance of economic systems, and can now prevent the super majority of future flair ups, convincing patients to change behavior voluntarily, even if automated, is a difficult task. This is particularly true with any system that includes personal accountability, which is required of designs that can prevent potentially fatal crises in neural networks.

Due to the governance structure, the patient requires a political agreement on any regulatory change, but the disease itself prevents rational decision making. The numbers do seem to confirm that Congress is faced with a majority of voters who have short-term personal interests that directly conflict with the long-term well being of the patient, and well organized groups do seem to have veto power over therapy decisions. Regardless of causal factors, the prognosis should therefore be considered grim.

When traced to origin and back to present we find clues that provide some confidence in the diagnostic process. The patient Columbia has evolved through many stages of maturation, surviving many different types of crises, but is now faced with serious complications sourced in part from aggressive treatment prescribed for a flair up in the previous century during the Great Depression. When tracing a trajectory of the remedies of the Great Depression in the form of promises made by Congress, and given money supply, demographics, followed by globalization, it has been clear for decades that the path was unsustainable. Columbia would need to either voluntarily adopt a sustainable diet, risk systemic failure, or require intervention from an external source.

To date such a diet has not been adopted, nor has the chief physician requested intervention, but rather seems to have misdiagnosed the disease, perhaps due to cognitive bias developed during residency.  The patient Columbia now appears to suffer a life-threatening addiction to the prescribed medication in addition to the underlying disease, and the team of physicians are now faced with a patient that refuses a life saving diet and exercise regime, choosing instead to live substantially off of the nutrients within the drug therapy (QE) that are attacking the healthy cells that sustain life.

By investigating the history and origin of the patient, we find ample evidence of telegraphing recent events in notes from the parents of the patient, a few examples of which follow:

A pure democracy can admit no cure for the mischiefs of faction. A common passion or interest will be felt by a majority, and there is nothing to check the inducements to sacrifice the weaker party. Hence it is, that democracies have ever been found incompatible with personal security or the rights of property; and have, in general, been as short in their lives as they have been violent in their deaths”  –  James Madison

“In short, as the Constitution has taken the utmost care that they shall be men of talents and integrity, we have reason to be persuaded that the treaties they make will be as advantageous as, all circumstances considered, could be made; and so far as the fear of punishment and disgrace can operate, that motive to good behavior is amply afforded by the article on the subject of impeachments.”  –  John Jay

“In these sentiments, Sir, I agree to this Constitution, with all its faults, — if they are such; because I think a general Government necessary for us, and there is no form of government but what may be a blessing to the people, if well administered; and I believe, farther, that this is likely to be well administered for a course of years, and can only end in despotism, as other forms have done before it, when the people shall become so corrupted as to need despotic government, being incapable of any other.”    –  Benjamin Franklin

“There is nothing which I dread so much as a division of the republic into two great parties, each arranged under its leader, and concerting measures in opposition to each other. This, in my humble apprehension, is to be dreaded as the greatest political evil under our Constitution.”  –  John Adams

“It has been observed that a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.”   –  Alexander Hamilton

“The common and continual mischiefs of the spirit of party are sufficient to make it the interest and duty of a wise people to discourage and restrain it.”   –  George Washington

“Still one thing more, fellow-citizens—a wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.”   –  Thomas Jefferson

Diagnosis of Columbia: Severe case of special-interest-driven political faction.

Causal factors: Long-term erosion of Constitutional Republic led to systemic malfeasance & corruption of the political process, self-destructive special interest lobbying, and a duopoly of political parties. Short-term interests became misaligned with long-term interest of patient. Patient Columbia may now face an auto-immune disorder whereby a majority of cells attack the patient’s immune system.

Prognosis: Grim without near-term intervention.

Recommended Therapy:

  • Balanced ten-year budget trajectory, requiring non-partisan, unconflicted, credible audit.
  • Permanent end to corporate bail-outs.
  • Break-up and prevent too big to fail—make clear existence of which is unconstitutional.
  • Redefine corporate fiduciary role that places global sustainability equal to or greater than short-term profits. Do not require highest possible short-term profit.
  • Establish economic and ecological sustainability as a mandate through a ‘wise commission’ of non-partisan citizens.
  • Rebalance power toward states and individuals.
  • Increase diversity and reduce global consolidation of financial center power.
  • Small business reform: Make unconstitutional any legislation that favors one competitor over another, with national security/sustainability being the sole exception. Require independent appraisal process for compensation those harmed by this exception.
  • Eliminate high speed trading, discourage short-term investing and encourage long-term investment.
  • Require transparency of government, public institutions, brokers, and agents—to citizen commission under confidentiality when secrecy is required.
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