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False Protection from Short-Term Pain

If you want to make anyone in the KFG office shudder, just say the magic words “server crash.” We’re still recovering from our recent technology problems.

We had gone along just fine for several years, without worry, assuming each day that everything would be working. Until the day everything crashed.

We had a choice to make: go with the cheapest option that would get things back to where they were, pay just a little bit more to have our server at another location, or take the most expensive route of moving all our software to the Internet. The first choice would be the least disruptive to the firm’s operations as well as the cheapest. Eliminating the server would be the most painful in the short term because it would change all of our software and many of our operations. In the long term, however, it would increase our productivity and efficiency. We chose the middle option.

It turned out to be hugely expensive. Nothing worked quite right after the move, and we eventually had to buy a new server and go through the expense and pain of moving everything again. Ultimately this should fix all of our issues and pay for itself. Arguably, we could have saved ourselves a lot of money and frustration had we done this in the first place. Too bad our crystal ball wasn’t working the day we made the initial decision.

Our server woes are a lot like the current state of the U.S. economy. We were all going along just fine, without a care in the world. If something did go wrong with the economy, we assumed Washington would fix it.

As we all know now, the system wasn’t working perfectly, and it eventually crashed. Then we had to decide how to fix it. We chose the option that was just a little bit more expensive and would be the least painful in the short term—deficit spending. It’s proving to be a very expensive decision that will be incredibly painful in the long term, even though it isn’t causing too much pain right now.

Now we have come to a crossroads. Do we keep on doing what we are doing and keep pushing the pain into the future by deficit spending, or do we take on the pain right now and get our country out of debt? Few Americans really understand how painful it would be to fix our economy sooner rather than later and free ourselves from the worry of a 14-trillion dollar debt. Would that freedom be worth the pain for us?

By not telling us we needed a new server, our technicians were trying to not upset us and to protect us from the short-term pain of having to spend a lot of money. With the clarity of hindsight after the pain of spending even more money, we can see that in the long run they did us no favors.

This is the same reason politicians don’t want to implement a long-term fix to our economy. They’re afraid if they tell us the truth—that fixing our long-term economic problem will cause significant short-term pain (like a depression)—we’ll fire them when they run for re-election.

Developing the courage to take a long-term view of our country’s economic problems requires us to become more educated consumers. We must stop deficit spending in our own personal lives and as a nation and become a country of savers. Above all, we must become willing to listen to those few economists and politicians who are brave enough to tell us the truth, even when it is painful.

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2 Responses to False Protection from Short-Term Pain

  1. Bobbie in Atlanta September 20, 2010 at 10:59 am #

    Bring on the pain, the sooner the better. But the politicians are right….as much as citizens say they want responsible government, I believe they would completely reject real solutions.

  2. Adam in Phoenix September 20, 2010 at 12:42 pm #

    I’ve heard some say that the fate of reigning in spending is necessarily going to result in depression, but I’m not sure why that has to be true.

    Currency is really a measure of trust, and yes for today, the world only has a limited amount of trust in what we can produce/consume. Just because we are limited in today’s scope, does that also mean that today’s perceived value is equitable with the true state of the economy?

    In the IT field, we live mostly in the state of ideas, and the one thing this economy can’t seem to rationalize is the value of our ideas. Just as your servers went down, the perceived value of the information on them was probably greatly different in reality (after you lost your data) than before the server crash correct? In the IT field I see it all the time, workers, and ideas and processes are all taken for granted because they are just “the way of doing business”, and yet no one can quite do those process quite like us, can manage that data quite like us, and can’t increase their productivity quite like us. I would argue that the economy crashing the last few years is quite like a server crash – but in a different way. We have never had to quantify what it is technology is before, and now that we’re surviving – and doing modestly well considering how bad it could have been, why is that? I believe we had the crash because we have assumed both that what we produce is valuable (even though we can say what that exactly is), and then oppositely what we produce is not that valuable (the crashing of the last few years). What may actually emerge is a new accurate measure of what technology means and how valuable it is that we have the most of the ideas behind that technology right now.

    Now does this mean we should be complacent, not at all, but deciding that the lower end of estimates of our value is accurate and we should “prepare for the crash”, or we can backfill for a few years – and get our education up and expectations for incomes down a bit – and balance out in the future.

    I guess my argument is that the value of money is determined by many many factors, of which is really manipulatable by the system. If we continue to accept the system at face value, and let it determine our internal, and therefor societal value, then we could intentionally create the world that we perceive – one that is 14 trillion dollars less valuable than today. If by contrast we accept that the 14 trillion dollars debt is actually a fiction created by world systems, as THAT system gets righted, the debt will also be corrected in that picture.

    So the true picture in my perspective is a fair taxation rate (which should be higher than it is now for sure), a fair stimulus, fair trade with China, and huge support of education. I guess I just can’t see what a “depression” would really serve, except to deflate the expectations of value and trust on a global scale.