Continuing on Mr. Obama’s “you didn’t build that” statement and the discussion that it seems to have inspired regarding the future role of big government in America: I also hope that Mr. Obama will expand this discussion to the difficult but inherent choice between maximum economic growth versus a fairer distribution of wealth. I hope that he will be honest with the public and not sugar-coat this issue in the name of politics.

Let’s face it; if you want maximum economic growth for the nation as a whole, as Mr. Reagan proposed in the 1980’s, the rich are going to get richer at the expense of just about everyone else. If you impose mechanisms to share the wealth, if you install mechanisms that somewhat reduce entrepreneurial incentives and raise the cost of government oversight (i.e., via higher taxes), then you will NOT get maximum economic growth. If you impose too much government regulation and redistribution, you can stop growth altogether and start the nation on the road to poverty (perhaps Greece is the latest case-in-point; and let’s not forget Cuba and North Korea, poster children for the Soviet bloc nations of the 40’s, 50’s and 60’s).

Side note: It is my opinion that one of humanity’s biggest challenges is  »  continue reading …

President Obama got a lift in the tracking polls following the Supreme Court decision last week upholding the health care reform law (“Obamacare”). But another discouraging job creation report was released yesterday for the month of June, and some political writers are thus swinging back toward pessimism or neutrality regarding Obama’s prospects for a second term. If I were on the Obama campaign, I wouldn’t get too upset yet. There have been three down months from March to June, following some up months from November to February. Most of the numbers were discouraging in the first half of 2011, following a string of good months in late 2010. There were negative months (net job losses) in the second quarter of 2010, following a few very positive months from January to March. Then before that were a string of negative months, but growing less negative from late 2008 onward.

In other words, things are going up and down. Almost as if the economy is something like a bell that has been hit, disturbed, and is now ringing as it tries to settle down. A systems analyst might call this a “quasi-periodic behavior component in a complex, disturbed system”.

Complex systems like the US economy are subject to many trends, including pure chaos and periodic attractor (oscillation) behavior. But even a chaotic “strange attractor” is ultimately periodic; it goes up, then down, then up, etc. Our economy went through various shocks from 2007 onward, from the mortgage financial crisis and then the federal governments’ various interventions to avoid a severe business depression. The “bell” that is our economy has been hit hard from many angles. It may not be ringing with a nice, recognizable tone like a normal metal bell; it’s quite a bit more complex in structure. But it DOES seem to be “ringing” around an overall trend back towards more-normal employment and growth patterns.

Unfortunately, I’m not a brilliant economic mathematician with supercomputers at my fingertips to analyze all of this. But I do have a chart of job creation since 2009, along with an early version of Photoshop Elements. Here is what I see as a crude version of what may be happening:

The blue line is the general recovery trend, while the purple line shows the periodic up and down trends. There is still a lot of chaotic noise  »  continue reading …