Strategy

Your ideas about a ’smart recovery’ strategy?

I welcome your ideas.  There are several ways to stick your oar in the water:

• Pick a blog entry on the “Home” page and use the comment feature.
• Send me an e-mail at seaquist.larry@leg.wa.gov.
• Phone our legislative hotline at 1.800.562-6000. Your message will automatically convert to an e-mail to me.
• Come to Olympia to testify on a bill.  You can track every bill and see every document we see on our legislative website, www.leg.wa.gov.

starting point — some (evolving) assumptions about this recession

In my practice, a strategy is the overall plan for using what you have to get what you want in the face of active opposition. Let’s take those briefly one at a time:

“ACTIVE OPPOSITION” What kind of recession are we fighting?

Here are some key assumptions.  (Note: this is not a forecast — there is too much mystery about this recession to forecast.  But if we make some assumptions about what is ahead we can not only design a strategy, we can know to change it when conditions depart from our assumptions.)  For now my working assumptions are that this is not a short, shallow recession from which we’ll quickly recover.  To the contrary, let’s assume that:

• We’re falling into an especially severe recession across the full spectrum of our economy,
• The WA economy is contracting faster than the national economy,
• The economy will continue to fall until mid-2009, maybe even later,
• Although we don’t know exactly what’s ahead, it is likely the downturn will last 2 or 3 years, and
• Recovery will be slow — we’ll not return to pre-crash GDP levels for 3-5 years.

Wildcard: Everyone is betting that a massive Keynesian stimulus will stop the collapse.  It hasn’t worked so far.  If the Keynsian gambit fails, then we’re really in the soup having just printed/borrowed ourselves another $10 trillion or so in debt.

The situation is dynamic and the experts say they don’t really understand what’s going on.  Let’s plan to revisit these assumptions often.

“OBJECTIVES(S)” What are we trying to achieve?

This is worth thinking about carefully.  So far most people seem to be focused just on stopping the crash, President-elect Obama keeps reminding everyone to think of the long term.  Are these our strategic objectives for Washington State?

• Minimize the damage to our citizens, businesses and core social programs with the budget cutting dictated by the severe turndown in revenue,
• Emerge from the recession with our economy stronger and even more competetive than before,
• Emerge from the recession with a streamlined, more efficient government,
• Emerge from the recession with an education system performing even better than before, and
• Emerge from the recession with reform of our health care system, especially health care cost control, well underway.

“RESOURCES”  What assets and tools do we have to work with?

This is a really interesting question. At the moment the focus seems limited to thinking about how to print or borrow more money.  Is that the only tool in our toolkit?  Don’t we have more assets that that that we can deploy first to stop the crash and then to begin to rebuild?  Your thoughts?