Of all the challenges facing our nation, none is as daunting as trying to achieve economic growth and reduce unemployment without adding layers of debt to our already bloated deficit. Legislators and economists have debated the merits of stimulus measures, changes in tax rates, and monetary policies, but they are no closer to a consensus than they were at the onset of the financial crisis.
One person, however, says a genuine solution is possible.
He is H. “Woody” Brock, the founder and president of Strategic Economic Decisions, a consulting firm focused on economic forecasting and market analysis. His clients include the world’s largest hedge funds, private equity firms, and corporations. I spoke with him on July 27.
Brock is virtually unique among leading economic thinkers. He focuses on the big problems – like healthcare and the nationalization of commodity resources – for which, he says, only a higher level of deductive logic can yield solutions. He scoffs at pundits who support their views by crunching data and building models, instead relying on high-powered and deep theories from which he can sometimes deduce an optimal solution to a problem.
Among his qualifications are four graduate degrees, two apiece from Harvard and Princeton. He studied under the Nobel laureate Kenneth Arrow, who he considers perhaps the most important theoretical economist of 20th century, and he relies extensively on the works of the late Nobel laureate James Tobin and Stanford economist Mordecai Kurz.
Brock believes 2010 is a watershed year for the US, and the reasons why will help explain the origins of his “growth without deficits” proposals.
“There are many different kinds of revolutions or tipping points,” Brock told me, “and the one the US confronts this year will not be a newsy event, like the fall of the Berlin Wall in 1989.” Instead, it will be a sea change the way people think about their lives – their retirement prospects, in particular. Moreover, he said this will be a global phenomenon impacting citizens from Greece to California.
Brock offered a specific timetable – before Christmas – for this conceptual revolution to unfold, as Americans recognize the insufficiency of their pensions and other assets to fund their retirements. He did not go as far to say that pension plans would default, but he predicted that Americans (and others) would acknowledge the reality that their retirement benefits would be less than they expected, and in many cases would kick in later than they had expected.