Can US, Europe avoid economic ‘Controlled Flight Into Terrain’?

There have been instances lately of pilots literally flying their airplanes into the ground – the technical term is ‘controlled flight into terrain’ – because they concentrated too narrowly on some particular cockpit task while losing sight of their general responsibility to keep the machine in the air until the runway was safely under it. Statecraft, rather like aircraft, requires that those in charge think about a lot of things simultaneously.”

 — John Lewis Gaddis, Cold War historian, writing in 2001

 

As Gaddis observes, pilots are not the only people vulnerable to making controlled flights into terrain. These days, we can easily find examples of both economic policy makers and political leaders poised to crash institutions and in some cases entire communities into the ground, thanks to unintended “controlled flights into terrain” (CFITs).

According to aviation expert Dr. Daryl R. Smith, one major cause of CFIT has to do with pilots becoming “too focused on one aspect” of their flight plan during bad weather, and losing their “situational awareness” as a consequence.

One scenario described by Dr. Smith that can lead to a CFIT is when a pilot encounters an unexpected storm, without having first given thought to a backup plan in case of mid-flight trouble.

That pilot now has to scramble to devise a new flight plan while responding to the wind, rain, etc. In such a stressful situation, it’s easy to see how additional pilot errors, even if small, can add up to a tragic result. While attempting to steer through the storm, for example, the pilot could lose track of his altitude and crash into a mountain.

Dr. Smith’s hypothetical scenario may make you think of the situation facing the political and economic leadership of countries that have been hit hard by the Great Recession.

Just like the pilot surprised by the storm, very few North American or European political decision-makers or economic policymakers anticipated the financial dislocations of the last two years.

And even fewer of those leaders seem willing to consider whether the policy of massive bailouts of private banks with taxpayer dollars enacted on both sides of the Atlantic will, in fact, right their respective economies.

It sounds just like the pilot becoming “too focused” on one aspect of his plane, when he needs to be keeping track of many details at once.

And if you are looking for ideas on other problems resulting from the Great Recession, like how to deal with the foreclosure crisis, or how to restore US manufacturing as an economic driver, or how to prevent more small US community banks from having to close, etc – forget it. The bailouts of big banks are the focus.

So much for back-up plans, or for Gaddis’ warning about those involved in making policy having to think about many things simultaneously.

As Dr. Smith has observed, a smart pilot, faced with an unfamiliar and dangerous situation, will not hesitate to turn back, should he think that doing so is necessary to avoid a CFIT.

There’s a lesson in that for political decision-makers and economic policymakers, if they would just think about it long enough.

 

 

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