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Mid-Year Analysis - Some ConclusionsWarren Pollock [FYI: Radio interview. Warren Pollock and Tom Jeffries talk about Mr. Pollock's latest wide ranging newsletter and the theme - "Decision by Uncertainty" - he talks about everything from the "Plame Affair" to the troubling signs in the Housing Market.] Many of the most important trends we have been describing in this newsletter are symptomatic of circumstance. This issue will be conclusive. Your analytical process should find its own conclusions. When considering what is going on around us, I recommend that you concentrate on the issues, not the personalities of the participants. Reviewing matters from the (possible) perspective of the US leadership, here are some conclusions. Conclusion One: When a major failure occurs, an effort will made to deal with it. Symptoms of major failure became widely evident with the World Trade Center attack in 2001, and the breaking of the Internet boom. These events were concurrent and synergistic; they describe a structural failure of the global economic framework leading to war. A subset of that failure is that the global economic framework which allocated purchasing power has been broken. Conclusion Two: Managing through uncertainty. The leadership effort has been planning amidst complete uncertainty. I believe our leadership has situational cognizance. It has perceptions and perspective. For those interested, Robert McNamara´s reflections of his times in government are useful in understanding this process. An effort is being made to identify and take the best action, with an endpoint being uncertain. Each action will yield more follow-on choices. Decisions in complex systems are frequently made this way. Conclusion Three: Decisions are made through the executive branch. Situational constraints abound, and the stakes are so high that expediency and decisiveness are required. Viewed in context, the Iraq question was a small issue. Leaving aside whether the decision to invade was right or wrong, the consensus-finding process was abortive. Symptomatically, the Valerie Plame leak occurred to expedite an executive level objective. Conclusion Four: Maintain an appearance of normalcy. It is easy to see that maintaining a sense of normalcy would be desirable during a protracted and difficult period. However, when finding the best outcome in a large endeavor, participation tends to be optimal. Such are the decisions that are being made in uncertainty. Conclusion Five: Build Transitional Awareness. The Patriot Act, Homeland Security and the war on terror are tools being used to build transitional awareness. These efforts accomplish something, but mostly they are all just symptomatic noise. Trade disputes, commodity price increases, and contention in China build situational awareness. Events will bring situational fact and awareness together. A tight grip on the media can help to build transitional awareness, just as it can be used to maintain an appearance of calm and normalcy. Conclusion Six: Let events tell the story, let failures occur. In leadership, the use of failure can be an effective and valid management technique. Allowing failure to occur provides justification for increased effort and resources. A small terror attack in London occurs, and desired efforts are funded that are disproportional to the event. Who can say if effective defensive measures can be mounted against severe asymmetric attack? Conclusion Seven: Frame the ownership of events and issues; focus anger. Political issues have been framed around people, bad guys and political blockers. The Cold War was simpler to understand than this. World War II was simpler yet, until you find it had synergy to the Depression. It is no coincidence that economic failure and warfare occur concurrently. Conclusion Eight: Mitigate severe events if possible. This brings us to what may be happening slightly below the surface. BELOW THE SURFACE Conclusion One: The potential (but low probability) of a catastrophic nuclear terror event. The loss of a city or two must remain a major concern. A battle may be waging behind the scenes to constrain proliferation and deployment. Conclusion Two: Potential overhang of an economic reckoning, energy shock, and/or a protracted war. Central bankers are creative. Many of the distortions we report in this newsletter are the result of central bankers and central government playing for time. Numbers can be shuffled around, paper bonds and currency can be printed, bubbles can be inflated, currencies can be swapped, economies can be accelerated or slowed down. Conclusion Three: Purchasing Power. This whole global exercise revolves around the global allocation of purchasing power. A main conclusion is that the global wealth allocation system has already failed. The quest for purchasing power may be disguised in theocratic robes of Islam, Asian political assertion, or even the strategic imperative to secure scarce oil. That doesn´t change its nature. The right to wealth was defined by treaty in the last great reallocation, which was WWII and the Depression. Conclusion Four: Personal awareness and Pragmatic Detachment. I believe it pays to be aware of possible trends. It pays to have a pragmatic detachment about events over which we have no control. Those failing to do so become just as paralyzed as those who don´t want to be aware of what is going on around them. I believe it also pays to be flexible, so as to be comfortable in times of increased uncertainty. Making decisions in uncertainty will be a very important skill. When you think about how decisions are being made, in what context, and by which method, then the leadership decisions (and symptomatic result, including loss of liberty) make a bit more sense. Warren Pollock Subscriptions are billed at USD 1,450 per calendar year (CAD 1,800 for Canadian residents). Subscribers will be e-mailed at least 26 issues per year. Newsletters are published to the tempo of events. Payment can be made either by Paypal (www.paypal.com) to the publisher at pollock.warren@verizon.net or by check made out and mailed to Warren Pollock at POB 413, Garrison, NY 10524. |
