We’re wired to discount the future. That’s uniquely problematic in our system.

February 13th, 2017 at 9:50 am

Over at WaPo.

The R’s attack on regulation writ large is clearly underway and is a profound threat. We can and should fight this on a case-by-case basis–Dodd-Frank, fiduciary rule, climate–but it’s equally important to puzzle out the thematics of why this is such an effective play for them.

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5 comments in reply to "We’re wired to discount the future. That’s uniquely problematic in our system."

  1. Nick Batzdorf says:

    “Collapse: How Societies Choose to Fail or Succeed” by Jared Diamond.

    That book should be mandatory reading in high school, and anyone who hasn’t read it needs to. It’s eye-opening on many levels, but the main one is that he amplifies what you’re saying about discounting the future – only this time it’s not just Easter Island or the Anasazi, it’s global ecological collapse staring us in the face.

    On another level, it gives you an insight into events that you don’t get from reading the news.

  2. David Ashworth says:

    Yes, Collapse is good.

    Before that, there was Hannah Arendt, “Totalitarianism is never content to rule by external means, namely, through the state and a machinery of violence; thanks to its peculiar ideology and the role assigned to it in this apparatus of coercion, totalitarianism has discovered a means of dominating and terrorizing human beings from within.” Origins of Totalitarianism (1951)

    Before that, Frederick Douglass, “The limits of tyrants is prescribed by the endurance of those whom they oppress. Frederick Douglass,” West India Emancipation (1857)

  3. Smith says:

    No, this is vastly short sighted insider analysis. Most people are not concerned with nuances of policy, so your arguments mean little or nothing. Even those closely following the news and very aware of politics are seldom getting into this law or that rule or whatever regulation or proposal is up for grabs. Most citizens can barely drag themselves to the polls every 4 years, even when the candidates could not be more different, and the stakes (for example control of the Supreme Court and Executive branch and the Senate in the balance) could not be higher. So while this blog and the WP readership are a more concerned party through self selection, progressive causes won’t go anywhere by preaching about something called the fiduciary rule. Get real. My head spins just thinking about it, and I’m a pretty sophisticated player. When Democrats open up and say Trump is going to let Wall Street rip us off, and rob little old ladies of their life’s savings, then we might get somewhere. This is what gave Sanders and Warren traction. It’s what Clinton couldn’t do because she took millions, but of course, that’s what they offered.

  4. William Miller says:

    The problem with valuing the future is caused by a gap in capitalism, financial accounting and economics that misguides policy. The gap is that we measure and protect only money and other hard assets that are tangible capital (TC) while we use NPV to discount the future and use depreciation to discount the value of hard assets. Since we don’t properly measure, protect or value intangible capital (IC) that is mainly people with knowledge driven by education, experience and innovation nor recognize that the future is mainly driven by IC, we create a dismal and incorrect assessment of the future that only depends on how much money we currently have. The gap enables acceptance of free market propaganda like “regulations kill jobs” that really is designed to promote income and wealth inequality.
    The fundamental problem with the economy that creates and sustains wealth and income inequality while discounting the future is that only tangible capital (money) gets a fair return in the financial markets and intangible capital (mainly the knowledge of workers formed into a capability to work and innovate to create value with tools, technology and processes) is not given a fair return. Integrated Reporting is attempting to change the financial accounting rules and calculate compensation for both investors and workers based on the contribution of both tangible and intangible capital in a business. Imagine if there was only a minimal return granted for passive investors of tangible capital and a much larger return granted for those who applied capital based on TC AND IC to create future value in both TC AND IC. Wouldn’t that change drive a completely new balance in income and wealth equality and also decrease the value of Wall Street unless they also changed the analysis for investors to predict how the new process would create value – future cash flow AND intangible capital flow ?
    The issue is ownership of capital – both tangible and intangible – and then getting a fair return on it. Workers who contribute their personal intangible capital become “stockholders” in the new system. This is not socialism. It’s a correction to capitalism.
    An extension to economics is required to properly understand how future value is driven by innovation largely based on IC rather than TC.