Now that the exhaustively inspirational Pop!Tech 2008 is over, it’s worthwhile taking a look at what’s next, in other words, at the conference's theme for 2009. The organizers’ choice is pretty telling and may be indicative of a larger shift among not only the elite thinkers gathering at Pop!Tech, but also broader public opinion. Succeeding this year’s theme “Scarcity and Abundance” will be “America Reimagined,” a “top-to-bottom look at America’s opportunities, its challenges, and its future” that promises to explore what it means to be a “superpower in the age of the Second Superpower -- the Internet.”
This theme reflects many of the informal conversations that took place at this year’s Pop!Tech where the predominantly American attendees were wondering whether in light of the depressing news on the economy every morning they maybe ought to spend more time thinking about how to solve critical domestic issues rather than trying to save the rest of the world. The Pop!Tech curators obviously recognized this latent mood and acknowledged that the pendulum has begun to swing back from innovation at the bottom of the pyramid to innovation here at home, where the top of the pyramid has gotten bloated and all of it poisoned with debt. Concerns about a new isolationism, however, are not warranted: “There is not a single global challenge that can be addressed without the US,” as the Pop!Tech site points out.
That’s true, although the relationship between the US and the rest of the world has mutated from a dependence on America to a dependence of America. “Over the past decade, America has made itself a savings-poor country and will be running financial deficits with the rest of the world for the foreseeable future,” writes economist Charles R. Morris in his book, “The Trillion Dollar Meltdown,” which -- released in February of this year -- offers a both sober and prophetic account of the crisis: “The United States, the ‘hyperpower,’ the global leader in the efficiency of its markets and the productivity of its business and workers, hopelessly in hock to some of the world’s most unsavory regimes. (…) that’s where a quarter-century of diligent sacrifice to the gods of free market has brought us. It’s a disgrace.”
And no one can say we haven’t been warned of the coming agony: “For more than a decade, the international financial cop, the International Monetary Fund, forecast a hurricane was heading toward US shores, as did many heads of the treasury and the Fed,” writes economist Juan Enriquez in an op-ed piece for the Boston Globe. “There are five basic drivers of these crises, all based on excess: high income concentration, too much debt, too much reliance on foreign money, not enough tax revenue, and reckless government spending. Time after time governments believe they are different. They are bombarded by warnings but ignore, postpone, spend even more, and crash.”
Now the great unwinding is ahead of us. The US is an over-leveraged economy that has been spending 5 to 7 percent more each year than it earns. A $1,000 investment in Freddie Mac is presently worth less than the return on the bottle deposit of $1,000 worth of beer bottles. With so much debt as assets on the balance sheets, and most of it collateralized as “toxic waste,” as the financial wizards call it, it will take more than social innovation to prevent Allan Greenspan’s “flaw” from becoming an apocalyptic systemic failure – it will take a drastic behavior change.
The US requires a massive restructuring to address its debt, cutting back on its borrowing, spending, and wars. The alternative is “ugly,” as Enriquez stated in his Pop!Tech address. His analysis of the downturn and his passionate plea to the new administration (and the American people) was the emotional highlight of the conference and a welcome grounding in a distressing reality. Enriquez was agitated and the Q&A after his session just didn’t want to end. Fortunately, he also presented concrete solutions to fix the mess, in the form of his “ten commandments:”
“1 - Save the dollar
2 - Fundamentally and brutally restructure debt
3 - All entitlements are fair game:
- If you are 60-65, you probably just lost big chunks of your nest egg
- Social Security/Medicare benefits are intact
- If you are 55-60, we need two more years’ work from you
- If you’re 55 and under, we need three more years
4 - Cut back military by 2% per year for 10 years
5 - Cap medical costs at 18% GNP
6 - Triage our support for companies (do not attempt to save dying whales)
7 - The program has to be bipartisan. It has to make both Democrats and Republicans unhappy.
8 - Simplify and broadly apply Sarbanes Oxley, apply it to government, apply it to hedge funds.
9 - Invest in growing start-up companies (which create most jobs)
10 - Treat education as a varsity sport (and continue to recruit foreign PhDs)”
Immediate action is of the essence: The new administration has 30 days, Enrique noted, to make significant changes based on these commandments. If it fails to do so, the consequences will be a breakdown of public infrastructure, a hike in unemployment rates, and social tensions. "Every great empire has fallen by going into bankruptcy," he stated.
Yet the damage is not only materialistic, it is spiritual. The American people need to rebuild America, but, maybe more importantly, they need to re-imagine it -- with confidence and utmost transparency. The covert irrational exuberance in the financial markets, which has occurred outside of regulatory oversight and is now gradually revealed, has shattered trust in institutions both in the business and public sector. "Supercapitalism has spilled over into politics, and has engulfed democracy,” as Robert Reich, Clinton’s first secretary of labor, diagnoses. Public policy debates have become, Reich observes, “on closer inspection, matters of mundane competitive advantage in pursuit of corporate profit,” with the notion of the "common good" disappearing.
In 2009, citizens and consumers alike will therefore ask for more transparency, more accountability from any kind of governance, as well as for more platforms to actively participate in the process of governance themselves. The rising power of amateurs, the emergence of mass-collaboration, crowdsourcing, user-generated content, and prosumers will extend to the political realm, and the open-source nature that the Obama campaign pioneered on such impressive scale, will extend to the new administration, setting up a social media-enabled “new deal” between citizens and government based on transparency and collective civic intelligence. Applying emerging technologies and new communication paradigms to the realm of governance will likely see a renaissance. More than a decade after visions of digital democracy and e-governance were rendered hopelessly visionary, they will be put forward again with reinvigorated momentum and new practical relevance in a brave new politics 2.0 world. America can and must lead this effort.
It’s a sign of troubling times when it is science that gives you faith. Another Pop!Tech speaker, the British neuro-scientist Peter Whybrow, explained in his talk how markets rely on basic human instincts that reside in the Reptilian brain and how a “buy now, pay later” mentality has led to an abundance that remains unquestioned because we tricked ourselves into a positive feedback loop. The good news from Whybrow though is: It’s only during times of scarcity that we use our human intelligence to its full effect. You can also say: scarcity is the mother of innovation. This presents a unique historic opportunity for the creative class. Reimagining America will be followed by Rebranding and Redesigning America, and all will be daunting tasks that require the skills of artists, entrepreneurs, designers, architects, writers, and marketers. Innovation is no longer only a critical economic factor, it has become a moral obligation for all creative people.