For economists, creating a solution to America’s current financial crisis poses the same difficulties as finding a solution to global warming does for environmentalists. The reason is that they are both examples of a “wicked problem” — a type of innovation puzzle in which there are no clear answers, there is no right way to view the problem, no easy way to define the problem, and a host of interconnected symptoms that shift as solutions begin to be formulated.
What makes the fiscal cliff such an especially wicked problem is that every stakeholder tends to view the problem exclusively from their own perspective. They do not understand how all the issues are actually interconnected and that there is no clear answer. This makes the current gridlock in Washington understandable. Nobody knows where to start, how to define the problem or even what might work.
And, making it even more complex is the fact that all wicked problems, by definition, are unique. The fiscal cliff, while suffering from many of the same symptoms as the 2008 financial crisis, demands its own unique solutions. You simply can’t call in a consultant, apply some best practices that have worked in the past, and have a solution by the end of the month. Wicked problems require a special breed of problem solver who is willing to adapt his or her approach continuously; who is willing to accept the fact that there is no magic bullet to solve the problem; and who has the legitimacy to try out different solutions on different stakeholders.
Skeptics will say that we’ll simply muddle through as we’ve always done, settling on some kind of 24th hour accounting magic to make all the problems go away. They prefer not to even call it the “fiscal cliff” — they prefer to call it something much less menacing — "fiscal obstacle course"being a case in point. They’ll point to the fact that America has been running monster deficits for years, and nothing has gone seriously wrong. They’ll highlight the fact that America lost its much-vaunted AAA credit rating more than a year ago. Did that really spook the financial markets? Nope. And, most impressively, they’ll argue vigorously that “America is not the next Greece.”
Does this sound familiar? Global warming was also a type of wicked problem that led to gridlock and dissension in the nation’s capital, as nobody could quite formulate the link between public policy and extreme weather events.
That is, until Sandy. After being a non-factor until the last week of the presidential campaign, suddenly people want to talk about global warming.
The scene in Washington now seems as ominous as the calm before the storm when Sandy thrashed the Eastern seaboard and flooded parts of New York City. We tracked the path of Sandy for two weeks, just as we’re now tracking the fiscal cliff for two months. Even hours before Sandy was scheduled to hit, curious onlookers were snapping pictures and even surfing in the rough waters off the New Jersey coast, convinced that there was no way the storm could be as devastating as it was. By the time the water and winds hit, it was too late.
Let’s hope that it doesn’t take a major economic apocalypse — a superstorm, if you will — to get the debate moving once again about solving America’s financial problems. But that’s the thing about wicked problems : it’s always easier to understand the problem after it’s solved. In hindsight, we realize that there’s a lot more that could have been done before Sandy hit. There were no overnight solutions that could have prevented the destructive impact of of the storm entirely, but there were the types of “good enough” solutions that might have saved more lives, protected more homes, and kept the power on for millions more people. That’s what we need now — some "good enough" solutions that will keep America from sliding over the cliff and back into recession.
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