Leadership or Chaos?

It could be both. Chaos intentionally made upsets balances. Organizations are balanced most of the time; they transact actions routinely in a ‘usual’ fashion. Every now and then transactions are out of the norm, different from the routine. This may be logical at the time and practical for specific circumstances. Whatever the reason for breaking from the norm, interactions of the organization's systems are challenged to deal with the odd ball situation.

The interaction may go smoothly or not. Smooth operations when not expected develop fresh perspectives on different ways of transacting our operations. We may discover a breakthrough that improves productivity. We may even discover new systems that will drive future productivity – and net income – gains.

If the interaction creates a distortion of operations, then many things may misfire. Chaos may result. Then the organization must learn how to deal with it. It becomes a challenge to survive.

Chaos unsettles routines. Sometimes routines are stale and a barrier to discovery of new things. Chaos may cause damage to the organization as well. So, there are good and bad sides to chaos.

Even damaging chaos may turn out well if it helps an organization refresh and improve its operations.

Intentionally inflicting chaos can be logistically correct. It can be terribly wrong, too.

The wrong chaos intentionally causes problems with little or no plan for the results. The accident begets more accidents and soon a disaster grows. Uncoiling that monster may be impossible, thus permanent damage will be done. 

Such is the state of affairs in Washington DC with the current occupant of the White House. He continues to muddle in matters of which he has no knowledge. Tariffs? They normally are protectionist – saving domestic industries and jobs from foreign competition. Sometimes tariffs are strategically placed to protect infant industries that are inventing new technologies that will revolutionize industry and become the new strength of the nation’s business community. Such tariffs may be quite appropriate. Protectionist tariffs for jobs, however, are most likely not appropriate.

The balance of policy that broadly considers consequences is accumulated over time as specialists in these arenas build knowledge of cause and effect relationships. Rebalancing the policies in these circumstances becomes hugely complicated; miscalculations will be damaging and hard to repair.

Economics is a system of interrelationships of value and action. Each move of the chess piece has multiple reactions – some uncharted, unknown. The chess board in global economics is not two dimensional or three-dimensional; it is most likely 6 or 8 dimensional. Complexity upon complexity.

Throw in culture and foreign relationship issues and the complexity is magnified many times over.

These are not simple matters. It is why policy formation is so delicate and complex. Balances are carefully built over time; they are changed carefully over time as well. Blundering through these issues is destructive and produces enormous problems.

Does anyone trust current occupant knows what he is doing and can repair unintended consequences? Or his team of unproven people?

No; most people who know about these things don’t have any confidence in current occupant’s abilities. Those who do trust him do so blindly for other reasons. Upsetting the status quo is most probably their intent. They want the status quo reconfigured, most likely for their own gain. The problem is, however, unintended consequences will produce results far from their expectations. Or wants.

Job creation and job maintenance strategies are very different from one another. Tariffs mostly protect current jobs. As a result, they stifle creativity and innovation which builds new and more jobs. Tariffs create stagnation in industry and careers.

Free of tariffs industries can follow their markets wherever they are and build jobs to support the business activity that results. That requires free markets unfettered by frivolous restrictions.

The world is larger than America. So are the markets. And the economic system. They are all interdependent.

March 8, 2018