Most people interested in our economy are hoping that we've “reached bottom” so that we can slowly begin our ascent.
“Reaching bottom” is a term more likely used by “boom and bust” economist. The trouble with these guys is that they believe in finding “bottoms” but don't believe in such things as peaks. They tend to think in terms of balloons and their over-inflation at the top of the cycle as they burst to take us down once again.
I'd like to discuss this perspective of what we refer to as the economy. But today my mind is more focused on the aspect of the economy that we need to change as we hopefully go from bottom upward. But I also want to transfer what we learn at this scale to what is useful at the community level.
We've been learning from each recession. I believe that one of the important lessons that we must learn from this one, beside avoiding making things too big is to keep various functions separate from each other.
This came to mind when I recently heard that if one owns a car that has outlived its warranty, that now the owner can purchase or extend her warranty by paying a certain amount per month toward future repairs.
This is a type of insurance and has its dangers for both parties. However, insurance brought to mind the need to separate certain functions within our system.
We must learn to separate the insurance aspects of capitalism from the banking aspects. The combination of these two functions, we'll probably learn, were at the basis of the recession that we find ourselves in today. This requires more time to discuss than we expect from one blog.
I tend to observe what we might call “universal knowledge,” that is information that can be used on the broadest scale and try to determine how we can apply some of that knowledge at the community or even more personal scale.
I believe that here in Shorewood, we have tended to combine a number of community and government functions. This situation leads to a certain kind of packaging that operates toward creating a mix of “toxic assets” and functions with good ones. I believe that now we may be seeing the results of these unwise combinations.
I also believe that the individual lack of knowledge of all things requires then, that we depend on consultants to fill-in on what we don't know. They deal in separation, or specialization rather than in combination. Usually what we don't know, is also not known by consultants but delivered in fancy packages or explanations.
Therefore, if these gaps in information are not filled with knowledge provided by consultants, they become bridges of “toxic speculation” often neatly packaged and appearing to be knowledge.
The combination of banking and insurance in one operation is “counter functional.” Because of their minimal sizes, communities tend to engaging in combining various elements and activities which eventually also become “counter functional”. What to do? “Aye there's the rub.” Call in a consultant? What about a "wise man"? Are they listed in the yellow pages?