Tuesday, June 15, 2010

The Times Call for “Bold, Persistent Experimentation!”

To adapt a phrase from The Graduate, I just want to say one word to you.  Innovation.

It is essentially the key difference between our current gridlock and the solutions that delivered the country from the Great Depression.  My view was shaped by a recent reading of a great book (essentially a series of entertaining and interconnected biographies of major and minor participants on all sides) published last year entitled  Nothing to Fear: FDR's Inner Circle and the Hundred Days That Created Modern America by Adam Cohen. 100

Getting out of the Great Depression wasn’t nearly as “tidy” or “master planned” as some histories depict and the similarities with today, bailouts and all, are uncanny.

In campaigning to replace another “party of “no” that had refused to intervene or admit it’s role in bringing on that depression, President Roosevelt campaigned on the promise of “bold, persistent experimentation.”

As Cohen continues to note in his preface, FDR spoke that it was only “common sense”…”to take a method and try; If it fails, admit it frankly and try another. But above all try something.”

But if conservative columnist David Brooks is correct and I agree with him, the people who should read this book, wont’ because:

“Many people live in information cocoons in which they talk only to members of their own party and read blogs of their own sect…They come away with perceptions fundamentally at odds with reality.”

In my years as CEO of several Destination Marketing Organizations and as someone steeped politically in the tradition of western progressive independents, I was always amused at meetings when outspoken Republicans (and lobbyists) would always assume everyone in attendance was “naturally,” a Republican and conservative at that.

Recently a friend did just that in a meeting in the mountains when he vehemently dismissed innovations like the VAT or value added tax, a modern version of the sales tax used in 100 countries or so.

But not all conservations have knee jerkitis.  Another great book, published just as this current recession began and summarized at this link is 100 Million Unnecessary Returns: A Simple, Fair, and Competitive Tax Plan for the United States by Yale, now Columbia Tax Law Professor Michael J. Graetz who also served the US Treasury.

To me Graetz is a conservative but he makes a great case for dramatic innovation of the current tax code including a VAT as a crucial step in bringing down the deficit.  He also wants to exempt more than 100 million households from the income tax and dramatically lower other tax rates.

The genius of the VAT is that it closes up all of those loop holes and gaps in traditional sales taxes and it requires a part to be shouldered by producers and wholesalers of goods, not just consumers.

Hopefully anyone wallowing in anger in those “information cocoons” will at least read what he has to say.

My fear though is that we weren’t humbled, at least sufficiently, by this recession to break out of our polarized, just say no, gridlock and work with President Obama to pursue the type of innovation that transformed America’s emergence from the Great Depression.

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