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Everwhere we look todayDonald Steward9/29/2014

We need to start solving our problems rather than just quarrelling about them

Everywhere we look today, we see frustrated people doing irrational things that are causing animosities and chaos. They become frustrated and irrational when they are unable to see any rational way to solve the problems that affect them adversely. As our modern society has become more intertwined and complex, this situation has become worse.

One of the principal methods we employ to solve problems rationally is to use cause-and-effects. All our lives we have dealt with cause-and-effects. They tend to be familiar. But as the problems we face become more complex, we find it impossible to put together enough of these cause-and-effects logically to disentangle these problems so we can understand and solve them. But as of now, we can use a computer program to help us put together more of these cause-and-effects so we can deal with more complex problems than we otherwise could.

Given the cause-and-effects that underlie a problem, we can begin with an effect, i.e. a behavior to be explained, and trace backwards through the cause-and-effects to find the causes that explain that behavior. This is called logical abduction. Then given the causes, we can trace forward to find all the other behaviors that that explanation would also predict in addition to the one we initially intended to explain. Finding these predictions is called logical deduction. But an explanation should be rejected if it would predict behaviors that could not possibly occur.

An effect can be the cause of another effect. So cause-and-effects can be strung together logically into mechanisms that show how one effect causes another effect, possibly through some intermediate cause-and-effects.

We will associate values with the causes and effects. The value associated with an effect can move either Up or Down. A cause that produces an effect that moves in the Same direction is labeled S, while a cause that produces an effect that moves in the Opposite direction is labeled O.

Figure 1 is a matrix that is the input to the deficit reduction problem. The columns represent the causes and the rows represent their effects. The labels of the rows and columns are the same and occur in the same order. But the labels are shown only on the rows. The entries in the matrix are S’s if the values of the cause and its effect move in the same direction, and are O’s if they move in the opposite direction. You can see the effects that are being considered by reading down the left column.

Figure 2 is the output of the process. Each column represents a mechanism. The U`s show where the value of the effect goes Up and the D`s show where the value goes Down. The mechanisms shown here represent only the consequences of increasing the rate at which the deficit is reduced.

The first mechanism shows that reducing the deficit faster would increase prosperity in the future by reducing the debt to be paid off by those living in the future. The second mechanism shows that making investments now in education, infrastructure, and research would improve the prosperity of those in the future making it easier to pay off the debt at the cost of increasing the deficit and thus decreasing prosperity today.

The third and fourth mechanisms involve the consequences of changing the tax structure, which we will not consider now. Congress is not ready for that yet.
The Mechanisms1234
0. Government guarantee of loans by big business to small businesses
1. Fear Congress will not resolve fiscal crisis
2. Automation
3. Belief that increase in wealth at top will create jobs
4. Severe deficit reductionUUUU
5. Stimulus and Quantitative easing
6. Joblessness / Low payrolls
7. Decrease in deficit burden on future generations U
8. Current austerityUU
9. High financial uncertainty about futureUU
10. Big businesses have cash hoardUU
11. Tax increase on wealthyUU
12. Tax decrease on restU
13. Increase in disposable incomeU
14. Small businesses unable to invest in themselves
15. Big businesses do not invest cash hoard in small businesses
16. Small businesses do not have investments to be profitable
17. Small businesses not profitable
18. Spending on education, infrastructure, and researchDUU
19. Future Prosperity and Competitive advantage over other countriesUDUU

Figure 2: The mechanisms concerning how fast we reduce the

deficit today at the cost of prosperity today will affect future prosperity

There are those in Congress that favor implementing the first mechanism by decreasing the deficit as quickly as possible to leave the least debt in the future. There are others who favor implementing the second mechanism, increasing the deficit to invest in education, infrastructure, and research, They are only arguing and getting nowhere. But perhaps they could make progress by changing their way of thinking by reframing the problem.

If we ignore for the moment the possibility of changing the tax structure, the problem could be reframed as: ‘How do we create the greatest prosperity in the future at the least cost to prosperity today?`

As best I can see, this reframing has not been obvious to anyone with the power to rethink how to solve this problem and then implement its solution.

This may also suggest an even more fundamental problem that Congress has. Perhaps Congress should first face the question of: ‘Should we be concerned at all with preparing for the future, or shall we ‘take it all now` and ignore that there will be any future?` Much of the rest of what Congress needs to do will depend on answering this problem. Unfortunately, this issue is not as trivial as it seems.

But this only begins to show what we can learn from analyzing just this problem.

Circuits in the cause-and-effects produce two cycles, one is usually a virtuous cycle and the other is usually a vicious cycle. (Analyzing circuits required developing a new mathematical method that previously to my knowledge had not existed.) In the following, a proceeding R shows where the label showing the meaning of the effect as stated in the original label has been reversed to be more meaningful in this context, and an N shows where it has not been reversed. For example, ‘R 14. Small businesses able to invest in themselves` shows where the meaning of the original label `14 Small businesses unable to invest in themselves` has been reversed to be stated as `14 Small businesses able to invest in themselves`.

Now applying the R`s and N`s, we see that there is a virtuous cycle: R ‘15. Big businesses do invest cash hoard in small businesses` causes R ‘16. Small businesses do have investments to be profitable` causes N ‘17. Small businesses profitable, causes R ‘14. Small businesses able to invest in themselves`. There is also a vicious cycle where the use of the R`s and N`s is reversed. We want to promote those policies that drive the virtuous cycle and inhibit the policies that would drive the vicious cycle. The drivers of the virtuous cycle that might be implemented as policies are:

0. Government guarantee of loans by big business to small businesses,

5. Stimulus and Quantitative easing.

Some of the other problems that we, the Explainer and I, have dealt with so far are:

  1. Finding some of the principal causes of the economic crisis and widening wealth gap: We traced this problem back to a difficulty that occurs in negotiations when some parties have better knowledge of how their self-interests may be served than do the others in the negotiation, allowing those with the greater knowledge to take advantage of the others. This should not have been surprising if we had thought carefully about Adam Smith’s hidden assumption. He said in his book The Wealth of Nations in 1776 that if an economy where based on the principle that everyone negotiated in his own self-interests, resources would be allocated effectively and each person would gain from the economy in measure to what he contributed. But his hidden assumption was that everyone equally had the knowledge to understand his own self-interests. Lack of symmetric information in negotiations is a fundamental flaw in the capitalist system. Consider the subprime mortgage negotiations and the harm they did to the mortgagees and to the economy as a whole. The Consumer Financial Protection Bureau was designed to fix this flaw. Unfortunately, some in Congress wish to see that it is underfunded so the deceitful transactions can be continued.
  2. Another problem concerns the lack of demand needed to drive the economy. Here we deal with a cause-and-effect circuit. 1. Lack of demand causes businesses not to produce more goods than they can sell. 2. Thus, businesses do not hire more employees to produce those goods for which there is no demand. 3. When employees are not hired, there is not enough money in the economy to create demand. And then back to 1. But note that when automation is introduced, automation equipment does not produce demand nor does it pay taxes, which employees would. This upsets the system. Thus, automation can harm the overall economy. Perhaps we should tax the value of automated equipment that is operating in the U.S. and provide tax credits for the salaries paid to employees based in the U.S. This would lower the net cost of employees in the U.S. so they could better compete with foreign employees, offering some encouragement for businesses not to offshore their operations. But this should be more fully analyzed using the Explainer. Note also that this circuit also helps us frame the issue of raising the minimum wage. After some initial disruptions, raising the minimum wage may drive the economy enough to make it possible to pay the higher minimum wage.

We need to rethink our problems in order to get out of the rut of just being antagonists. We need to put them in forms that radically change our way of thinking and suggest how our problems might be solved.

Most of all, we need to reframe ourselves. Instead of thinking of ourselves as either Republicans or Democrats who share only their mutual hostility, we need to think of ourselves as either Problem-Solvers or their Adversaries. I believe that people would prefer to be seen as collaborative Problem-Solvers rather than as antagonized Adversaries.

When the future arrives, it often takes several decades before anyone recognizes its presence. If there is something we need to do now, how long can we afford to wait before it is recognized and put to use. We need to get the message to Congress now that such a method is available and how it might help solve some of the problems that befuddle both ourselves and Congress.

I have already asked our congressional representative Mike Thompson to find people in government who might have a problem they would be willing to work with me to solve. Could you help by contacting your congresspersons or someone who could look at this carefully to evaluate the value of using this method to solve problems that we might not otherwise be able to solve?

I would like to put the Explainer on the web so that knowledgeable people could collaborate to solve the problems that elude our government. This would provide some bottom up government to compete with government by those who use unknown sources of money to obtain a government by the wealthy, i.e. a plutocracy. So far, we should consider ourselves lucky that our frustrations have not yet led to a dictatorship like how the terms of the Versailles treaty led to frustrations resulting in the rise of the Third Reich in Germany.

I am also working on the Brainer, an idea for providing the Explainer with sensors and actuators so that it could look for and test its observations of likely candidates for cause-and-effects in order to understand its environment. (Could we consider the Brainer to be conscious? An amusing question.) Then I would like to make a simulation of a society made up of Brainers so that we could test various hypotheses as to how people interact in society to see whether the simulation would behave as we recognize our society behaves. Unfortunately, I foresee that I still have at least thirty years of work left to do, but I am already 82 years old. I am looking for others who might pick up on this work. Do you know of anyone who might be interested?

We need to look at the world in a new way. The old way is just not working.  

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