Economic Peril: Our Addiction to Complexity

When I was on CoastToCoast with George Noory this week, he asked me a very simple question:  Insightfully he wondered what I thought of the flat-rate income tax.

My answer was two parts:  First, I love it – with an exemption for people under $20,000 per year (George suggested a voucher would work) and then I explained that it could never be adopted now – because of our “Addiction to Complexity.”

As I explained it:  How many people are employed at IRS and what would those people do for jobs if the single rate tax was real?  What about the tax software industry if your whole annual tax filing could be done with a Wal-Mart calculator in 3-minutes?  And what about the accounting profession which has made a whole industry including professional continuing education credits and all…just in order to keep current on ways to game (but always inside the lines) on accounting under the complex system?

After this morning’s headlines and our Trading Model, we’ll suck down some coffee and go through numerous other examples.  But it all distills down to a key economic peril.  Namely that the US and global economy is in the process of sliding over the edge of the abyss into self-destruction caused by our reliance on ever-increasing complexity to “save the day.”

Which is only a good thing for as long as it works.  But what happens when complexity begins to cross moral and ethical bounds?  What’s more important:  Being right humans or keeping an increasingly crooked system intact?  You may was to augment your coffee this time around because this gets down to real “core values” which, come to think of it, have mostly be taken out back and put up against the wall, too.  That’s an undeniable fact that is NOT coincidental.

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Comments

Economic Peril: Our Addiction to Complexity — 3 Comments

  1. To paraphrase a bumper sticker ” He who has the fastest computer, “wins”” Artificial Inntelligence has allowed the PTB to manipulate the complexity we see everywhere today – imagine the command/control economy of the former USSR with high speed computing. There’s no doubt about who the primary beneficiaries are, with the 99% balance of us being temporary “trickle down” beneficiaries. The only haunting question left is “What could possibly go wrong, go wrong , go wrong, go wrong…

  2. George,

    Great post. I’ve noticed much the same thing in education but from a slightly different slant. Having just completed grad level work in Education Admin, I can tell you there are any number of school districts (we’re talking impoverished, urban here) that have seen incredible gains for their students and bucked the trend and assumptions. The only problem is that they didn’t use a lot of the latest and greatest (and EXPENSIVE) tools to do it. The answer was already in the classroom. Get a good teacher, give them the flexibility to run it effectively, and boom, great results.

    Here’s the real problem. Solutions are highly deflationary. Just like a flat tax wipes out an industry, a sensible educational environment does as well. There’s so much more money to be made in prolonging a problem than there is in solving it.