Sunday, November 30, 2008

The Physics of Currency (or, Exhibiting Two-Dimensional Thinking and the Flaws of Lateral Economics)

Proponents for economic stimulus, while varied in their supported theories, all seem to experience the same flawed thinking: It's always a unilateral concept that holds the 'key' to our success. We either trickle it up or down, hoping that either the investing class (i.e. 'the rich') or the spending class (i.e. 'the poor') will influence the economy in such a way that their opposing end of the line will eventually receive beneficial effects.

Recently, I had thought about the idea of a bilateral system. While still a two-dimensional concept, it seemed to have some merit to it. The idea of creating tax breaks and incentives for middle-income families and businesses, we could stimulate higher levels of spending from one of our largest consumer bases, as well as promote job growth in multiple industries. Effectively, we would push benefits both ways along the class line, providing better employment opportunities for the lower-class and greater profit/revenue potential for the upper-class.

It appeared a viable option and, for all I know, is an existing theory (I did try to search for it, but invariably found nothing but 'bilateral loans' and 'bilateral trade agreements'. I couldn't seem to find the right search string for a 'bilateral trickle'). However, it still has its flaws. Being a two-dimensional concept, the variables for any applied mathematics are limited. In all respects, the more variables we can apply to the model and the more malleable the model is, the better the chance of a successful outcome.

This is where two-dimensional models are lacking. We cannot provide adequate influence to the system to affect a prosperous solution. With only three possible variations in the flow (upwards unilateral, downwards unilateral and bilateral), a failure in one formula to produce results will hinder any corrective influence. We would have to effectively stop the flow of the failed application before being able to initiate the changes to push it in another direction. This, of course, takes an incredible amount of effort and time... even the insubstantiality of economics has an impressive momentum.

With the classical economic perspective no longer accomodating modern practices, it's time for our economic leadership to start, literally, thinking 'inside the box' of three-dimensional applications. It would also be prudent to engage in further exploration into chaos mathematical theory and its function in the economic and financial sectors. There are numerous models out there waiting to be exploited, for lack of a better term, in the pursuit of strengthening our economic power and stability.

I've said before that I'm not an economist, not by any stretch of the imagination. However, if I can realize our current two-dimensional economic paradigm is no longer a viable option, why can't those within the economic fields also come to the same conclusion? Even our President-Elect, for all of his apparent intelligence, appears to be stuck in the unilateral perspective with his interest in producing a 'trickle up' structure. How can we get them to understand that now is the time to bring the 'fringe economists' to the forefront and allow them to push us beyond the limited boundaries of our current, failing system?

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