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Larger crisis calls for new solutions
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TEXT OF COMMENTARY
KAI RYSSDAL: For all the federal government has been throwing at this recession — stimulus plans, interest-rate cuts, new rules and regulations — most of it seems like stuff straight out of the standard economic playbook. Just more of it.
Commentator K.C. Cole says once a problem gets as big as this one is, the answer isn’t always more of the same.
K.C. Cole: By now it should be obvious that the current financial meltdown is not just bigger than previous downturns, it’s qualitatively different. Most people think that quantity and quality are two different things, but fundamentally they’re not. So it’s not really that surprising that big numbers of bad bets turned seemingly rock-solid investments into something more like quicksand.
Take an everyday example like boiling a pot of water for your pasta. You add more and more heat and, for a while, well, you just get hotter water. But suddenly the water boils, then turns to vapor — a different state of matter altogether, one far more volatile and hard to keep a lid on.
Physicists call such properties “emergent” because they only “emerge” when there’s enough of something. A few neurons can’t make a mind, but put enough together and we seem to get consciousness. The number of electrons buzzing around atoms determines whether something is sweet, stinky, acid or blue. There’s nothing in our universe shaped like a teacup the size of Jupiter because when things get big enough, gravity crushes matter into spheres or disks.
If a star gets really big — say, bigger even than George Clooney, several times the mass of the sun — the gravity of its sheer size will eventually cause it to implode, leaving nothing but a gaping hole in space-time — a black hole, a one-way street to oblivion.
At a certain point, size is all that matters.
It’s the same with the economy. Treating the current collapse as just a bigger version of what’s gone before won’t work because so many bits of bad news have plunged us into a different kind of hell.
Consider this: The boiling water in your pot can be dumped down the sink. But once it’s turned to vapor, good luck getting it off the walls.
Qualitatively different situations call for qualitatively different solutions.
RYSSDAL: K.C. Cole is a professor at the Annenberg School for Communication at the University of Southern California.