More indications that we are in a new economic era — the Postnormal — and not just a temporary period of contraction following yet-another-boom-bust-cycle. Uncertainty in on the rise in the business sector, and this is not just a ruse to coax employees to vote against their interests or be fired.
The Election Won’t Solve All Puzzles - Andrew Ross Sorkin via NYTimes.com
“Uncertainty” has become the watchword over the last several years for many chief executives, politicians and economists as an explanation — or perhaps an excuse — for the economy’s slow growth, for the lack of hiring by business and for the volatility in the stock market.
“The claim is that businesses and households are uncertain about future taxes, spending levels, regulations, health care reform and interest rates. In turn, this uncertainty leads them to postpone spending on investment and consumption goods and to slow hiring, impeding the recovery,” a group of professors from Stanford University and the University of Chicago wrote in a study that found “current levels of economic policy uncertainty are at extremely elevated levels compared to recent history.” (The professors have created a Web site, policyuncertainty.com, where you can track the “uncertainty” levels.)
The possibility of significant changes in the tax code? The fiscal cliff? The European debt crisis? The debt overhang and economic contraction in China?
It’s all uncertain.
Effective leadership in the Postnormal will require greater tolerance of uncertainty, and a growing awareness that we are confronted with dilemmas that may have no ‘solutions’ only strategies for coping.