exponential problems require exponential solutions

What “The 29th Day: Changing Our Future” Is About:
Sometimes things are not as they seem to be. I believe we are at the beginning of the third great Revolution in human history. Just like the folks at the beginning of the Agrarian and the Industrial Revolutions, we face a new reality, new ideas, a new kind of thinking, along with the uncertainty of a new world. What has propelled us forward is the widespread use of Computers and the Internet which has unleashed a force which I call CIC (kick) that is speeding up change … everywhere. You are not imagining the world is moving more quickly. It is. For the first time in history, we are living in a visibly exponential world.

CIC is the combined exponential power of Creativity, Information, and Communication. The old (linear) ideas from the Industrial Age don’t work in this new world. They are coercive and just … too … slow. We need to open our minds and consider some new (exponential) ideas. Two examples of attempted linear solutions to exponential problems are the 2009 Economic Stimulus (Chapter 4) and Obamacare (Chapter 10). The result is we feel that (exponential) problems are becoming crises too suddenly and traditional (linear) solutions are being implemented too slowly and coercively. It is frightening us, angering us, making us feel that things are out of control.

The tremendous acceleration in the development of computer technology has been transferred to everything else by this force CIC because of the way we use computers and the internet to communicate … such as the economy, politics, health care, immigration, warfare, terrorism.

One of the most vital things that CIC does is to transfer or distribute power from institutions to their markets, that is, to people like you and me. This is happening, whether the product is goods and services, health care, government, religion, or working conditions. This is what empowers us to redirect the future. Whether or not we choose to do so is a test of our character. How we redirect the future is a matter between us, God, and our conscience. I am using CIC right now. You can use it, too. It is available to everyone. And be assured … it is being used right now to redirect our future … your future.

A major conclusion of this book is not that exponential forces will continue unchecked. It is that limiting factors, which I call 29th days, are guaranteed to occur. The pivotal issue is, “Can we avoid another 29th day, such as the 2008 Financial Crisis?” The only way to do this is by redirecting the future with an exponential solution(s).

Plain and simple, exponential solutions (using freedom of choice, incentives, and the “art of fighting without fighting”) can avoid 29th days, linear solutions (using penalties, coercion, and the “art of fighting by fighting”) do not. What is the difference between them? Why does one of them work and the other one does not? Why is one so quick and the other one so slow? How do we implement an exponential solution in time to avoid another 29th day? What role do CIC, Core Values, and the Messenger play? What is the difference between linear and exponential? This is what we need to understand. It is discussed throughout the book (by the way, there are no mathematical symbols, just examples, analogies, and stories).

So, what does an exponential force look like? Many of us watched the peaceful demonstrations of the Egyptian people, using CIC to communicate with the world (many of the signs in English so we could understand them when they were reported on US television), causing Hosni Mubarak to resign on February 11, 2011 after 18 days. This was exponential. On the other hand, the aftermath of the terrorist attack on the US Embassy in Benghazi, Libya on September 11, 2012 was linear. More than a year has passed since the deaths of four Americans, including the US Ambassador, and we have not heard yet from the people who were actually in the Embassy on September 11. But suppose 1 million, 10 million, or 50 million Americans took a few minutes to send a one-line email to President Obama and to their US Congressman, which said, “I want to know what actually happened in Benghazi!”? This would be exponential.

Finally, take a moment to ask yourself, “Who has power in the world today and what are they doing with it?” These are the people (the US Government, for example) with concentrated (linear) power brought forward from the Industrial Age and they will fight with everything they’ve got to keep it … oh, and they fight dirty. The good part for those of us who choose to use CIC, distributed (exponential) power, is that CIC cannibalizes concentrated power, if we use it. We are in the midst of a struggle whose outcome will determine our future for generations to come. For the first time in history, we have the means at our disposal to be victorious. How sad if we lose by default. Don’t let someone else decide your future for you.

If you think about it, a 29th day is really about losing some of our Freedom, some of our choices. The more serious the 29th day, the more serious is the loss of some of our Freedom. Ask yourself, “Did I lose some of my Freedom, some of my choices, when the natural limiting factor of the Financial Crisis occurred in 2008?” Having grown up with Freedom in the US, we tend to take it for granted, and assume it will always be here. Frequently, we may not even think about Freedom. It might take several generations but ultimately taking Freedom for granted is perilous … because the odd thing about Freedom is that it is not free, and it is not guaranteed. It requires diligence and responsibility to be sustainable. Throughout history, countless heroic soldiers and civilians have given all of their time, indeed their very lives for the cause of Freedom. Their legacy is in our hands. How much of our time and our comfort are we prepared to give to preserve it?

I don’t have all of the answers, far from it. I am simply someone who just wants to share ideas, so perhaps we can make some sense out of this confusing world in which we find ourselves. I am still learning about how CIC works, and no doubt you will find places where I haven’t got it right. I hope so because I am counting on your comments and criticisms to make this book better. But, most of all, I am counting on you to learn about CIC and how to use it, so that together, we can change the world.

Whether we like it or not, the CIC Revolution has begun. And the exponential clock is ticking toward the next 29th day. We don’t have a lot of time. For the moment the choice is still ours. The price-tag is our future.

tick … tick … tick 

George Berry, Actuary


We cannot, we must not ever forget who we are, where we came from, and why we are free!

If enough of us were willing to speak out
about injustice, our leaders would not dare to be deceptive. This sin of
omission on our part hurts us and our national honor ...  not them. That is
the irony of a sin of omission. We see the risk as the consequences to
ourselves if we dare to be bold and speak out. In fact, the risk is the
damage we do to our character and self-respect if we remain silent. Think of
the people you admire and respect. Do they speak out or do they hide in the
background? Be bold my friends and you will be changing the world.

"Do we want what is best for our country or do we just want what is best for us?"
Consider for a moment the possibility that the answer to this question is
"What is best for our country is best for us."
And that the answer we give will determine our destiny ... and our future ... for generations.

Consider this ...

Have you noticed that the 21st century is very different compared to earlier centuries?
Changes are happening much faster now (exponentially) than ever before.
The reason for this is the widespread use of Computers and the Internet which has unleashed

a powerful force which I call CIC(kick) that is speeding up change ... EVERYWHERE.
You are not imagining that the world is moving more quickly. It is.

CIC is the combined exponential power of Creativity, Information, and Communication.

The old (linear) ideas don't work in this new world.
Are you willing to open your mind and consider some new (exponential) ideas to find out ...

  • Why Citizens feel so disconnected from Government. 
  • What is wrong with the US Economy and what will make it right.
  • How cost/quality/access can be balanced in the US Health Care System  
  • Why there was a 2008 Financial Crisis.
  • Why the 2009 Economic Stimulus didn't work. 
  • Why the US/Mexican Border has not been secured.
  •  Why the 2010 Gulf Oil Spill happened.
  • What is really happening in Europe and the Middle East.
  • Where we will be in 10 years … in 50 years.
  • What WE can do about what is happening.

The United States (July, 2012) is on the brink of a divisive conflict between the Public Sector and the Private Sector (politically defined as "the middle class vs. the super-rich"). These two sectors have a quasi-symbiotic relationship. The Public Sector provides protection, regulation, infrastructure, and a safety net. The Private Sector finances the Public Sector by paying taxes, and creates jobs and wealth through innovation and risk-taking which is what enables it to pay taxes. The Public Sector hurts itself by being too onerous because that results in lower tax revenue. There is a limit to the alternative of borrowing and increasing the National Debt which occurs when lenders will simply refuse to lend. If and when that day comes, all of us will suffer far beyond our worst nightmare.

The reality is the Private Sector, not the Public Sector, is the goose that lays the golden eggs.
Cripple the Private Sector, or the people who expand the Private Sector... and no more golden eggs. The creative spark of the unencumbered, entrepreneurial individual mind, whether in the form of the wheel, the telephone, or the computer, lights the path to prosperity. The rest is just window dressing. To say otherwise will never make it so.

One indication of the confusion about the free enterprise system is the controversy which has erupted in July, 2012 about the contribution of small business to the economy. What the small businessman does that employees and government do not is he (or she) takes a risk. If it works, he is successful; if it doesn't he can lose everything. This is the essence of the free enterprise system and I am disappointed that nobody, Democrat or Republican, has mentioned it

We have reached a tipping point as a result of the collusive relationship between politicians and unions, and misleading accounting practices (see the Chapter on the National Debt) - politicians have been promising higher pension and medical benefits to public employees for decades in exchange for election support by their unions. These benefits have been massively underfunded raising the specter of city and state bankruptcies. At the national level, the tipping point may be the actual cost if Obamacare is implemented, or simply waiting too long to repair Social Security and Medicare.

The very real threat of "A house divided against itself cannot stand" in this looming tragedy is because
half of us pay income taxes ... and half of us don't,
a few of us are wealthy ... and most of us are not,
something which is ripe for unscrupulous political manipulation in an election year. And watch out for what Socrates said, "When the debate is over, slander becomes the tool of the loser".

We have had a glimpse of the future in Greece and even in the State of Wisconsin. This is becoming a life and death struggle between concentration of power and distribution of power, between coercion and enlightened self-interest, between tyranny and freedom. It is time for all of us to take a stand one way or the other or get out of the way. Be wary of four fatal errors: 1. Everything will be resolved satisfactorily even if we do nothing; 2. This is really a struggle between the rich and the poor; 3. The Public Sector is the goose that lays the golden eggs;
4. A tyrant will be kind and generous to us.

Samuel Adams said, "If you love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; may your chains set lightly upon you, and may posterity forget that you were our countrymen"..

These principles are valid for Actuarial Soundness, for Exponential Solutions … for Life. The secret is to balance or optimize them so that they work cooperatively. When one principle is ignored or violated, the faucet becomes impaired.
                                 F - Facilities available
                                 A - Adequacy
                                 U - Understanding
                                 C - Consistency and Competitiveness
                                 E - Equity, or fairness
                                 T - Time available

Make no mistake, interest rates will begin to rise and/or the Stock Market will begin to fall if the US Debt Limit resolution is viewed as inadequate (written July, 2011). And in our new exponential, electronic, globalized economy, this could happen in seconds. Have you noticed the level of interest rates in Greece lately?

And now (November, 2011) the heads of government in Italy and Greece have been replaced and we await the deliberations of the US Congressional Super Committee. Can we anticipate a concrete solution or is this just more dancing on the deck of the Titanic?

Are we approaching the 29th day for the United States? (September, 2012). I do not say this lightly and, in my opinion, both political parties share the responsibility for the current state of affairs. Consider what has happened.
  • The US National Debt went over $16 trillion (that is 16,000 billions). That is more than $51,000 for every man, woman, and child. 
  • The third Quantitative Easing (printing $40 billion per month) announced by the Federal Reserve caused the rating organization, Egan-Jones to lower the US Government to  AA- from AA. Paul Ryan, the Republican vice-presidential candidate, called it a "sugar-high" for the economy less than two months before the Federal Election. Too much money chasing too few goods and services always leads to inflation. It is inescapable.
  • The United States is mired in a stagnant economy with unemployment remaining above 8% and the increase in Gross Domestic Product stuck below 2%. Average income is declining and the number of people below the poverty level is higher than it has been for decades. The Bush tax cuts are scheduled to expire or be renewed on January1, 2013 as are the devastating Sequestration cuts to military and domestic spending. Obamacare is in the process of implementation with as yet an unknown impact on health costs and taxes. Expanding regulation has inhibited business to grow and expand. The debt crisis in the European Union shows no signs of being resolved with attendant repercussions for the American economy. All of these factors introduce uncertainty, the "economy-killer", into the mix.
  • Illegal immigration continues to be an unresolved issue with no light on the horizon.

  • On September 11, the anniversary of the terrorist attack on the Twin Towers in New York City, there were demonstrations against the United States in Egypt and soon afterward across the Middle East, Africa, Asia, and even in Australia. These were ostensibly a reaction to an obscure YouTube movie which appeared in July denigrating Islam. 

  • The US Libyan Embassy was set on fire and the US Ambassador and three members of the Consulate Staff were killed. Members of the Obama Administration claimed that this was a spontaneous reaction to the YouTube movie despite the fact that Rocket Propelled Grenades were involved and everybody else seemed to be convinced that this was a preplanned terrorist revenge attack coordinated to take place on September 11. After eight days, White House Press Secretary, Jay Carney, acknowledged it was "self-evident" that this was a terrorist attack. Nevertheless, the Administration is still claiming it was tied to the YouTube movie. What is interesting is that in the second Presidential Debate on October 22, 2012 President Obama said unequivocally that he had stated this was a terrorist attack during a press conference in the Rose Garden on September 12, 2012, one day after the attack. And now, on October 23, 2012 an email from the State Department to the White House Situation Room has come to light stating as it happened that the attack was by a terror group. Requests for additional security were denied and then later during the attack there were three unanswered calls for help. Can it get any worse? And finally, wouldn't the Obama Administration be offering more information if it made them look better?

  • President Obama appeared on the David Letterman TV Show and yet was too busy to meet with Benjamin Netanyahu, the Prime Minister of Israel, to discuss the inexorable progress by Iran toward the successful development of nuclear weapons. The US has refused to "red-line" Iran which would define a point beyond which action would be taken.

  • The risk of an interrupted oil supply is increasing exponentially. It is becoming obvious to everyone that the United States must move quickly toward domestic energy independence. The adverse consequences of our failure to do this have been horrendous both domestically and, in particular, with respect to US foreign policy in the Middle East and elsewhere. And yet ... and yet the Obama Administration continues to refuse to approve construction of the Keystone XL Canadian oil sands pipeline. Shall we wait until the Canadians decide to sell the oil to the Chinese? A report on the potentially enormous oil and gas resources of the 1.5 million acre ANWR area of Alaska was submitted in 1987 to Congress by the Department of the Interior. No action has been taken. Drilling leases on federal lands are not being approved. What are we waiting for?

President Obama continues his uninterrupted campaigning and the US Congress is on the verge of a long recess.
 Shouldn't Americans feel completely justified to be outraged by the lack of response to the now obvious deterioration of the United States both domestically and abroad? Are US political leaders aware of the risk and real danger here? They are playing with fire and acting like the man who was asked for the definition of Ignorance and Apathy. His response was, "I don't know and I don't care." As for help from our Allies, remember, the first reality of geo-politics is anarchy. All countries will never fail to act in their own self-interest.

Americans should be asking ourselves one simple question, "Are things getting better or are things getting worse?"  And we should be asking a more difficult question, "What am I prepared to do about it?"  How long can we continue to say, "I'm too busy", "It's not my problem", "I'm not interested"? Are we just going to wait for the 29th day?

The presumption of the US Federal Government is that it must be the architect of any economic recovery by creating jobs. In fact, it is the Private Sector which creates jobs and wealth. The President's message should not be, "This is how I will create jobs". Rather, it should be, "This is how I will get out of the way to better enable the Private Sector to create jobs".

One of the problems confronting the US economy is that, like the federal government today, too many people were using borrowed money as income for decades before the financial crisis of 2008. When they were unable to continue borrowing, such income disappeared. It will not return until their outstanding loans have been repaid. This has left a big hole in consumer spending, which is about two-thirds of the US economy, and made recovery a lot more difficult. Unfortunately, a substantial part of this borrowing was in the form of higher home loans which turned out to be a very bad idea when the housing bubble burst.

Many of you may think I am exaggerating, that somehow consequences can be avoided forever, just because we don't want them to happen.
As an actuary I can assure you, it doesn't work that way. Risk doesn't work that way.

The most important thing to understand about Risk is that risk is impersonal. Risk does not care if you are a good person. Risk does not care if you are doing something that you think is socially desirable. Risk does not care if you do not have enough money to back up taking the risk, in case it materializes adversely. Risk always operates the same way, for everyone. Always. Every single time. It operates on the basis of circumstance and probability.

Risk can be brutal. It has left us with three economic choices.
1. Make the tough decisions to reposition and redirect the US economy: promises made and expectations may have to be revised downward (depending upon how smart and bold we are) but at least we will be able to pay for them and end up with a healthy economy.
2. Don't make the tough decisions to reposition and redirect the US economy: inflation will revise the value of promises made and expectations downward to a level we can afford. Unfortunately, at the same time, inflation will devastate the rest of the economy.
3. Something in-between 1. and 2.: The closer to 1., the lower will be inflation and the healthier will be the economy. The closer to 2., the higher will be inflation and the more devastated will be the economy.

Pretending these are not our choices will result in 2. It is time to Pay the Piper
and his price-tag for delay is inflation and increasing the difficulty of the decisions required ... exponentially.

What people everywhere cannot believe is that, for the first time in our lifetime, there is no longer enough money to pay for everything we want. Unfortunately, we have waited so long to do anything about it that we are not even close to having enough money, unless we are willing to embrace some new ideas. The alternative is that it is likely everybody is going to pay, whether they like it or not.

How to understand and use CIC (and Risk) can be found by clicking on BOOK.

We don't have a lot of time to learn about CIC and how to use it. 
The Exponential Clock is ticking toward the 29th day ...
tick ... tick ... tick.


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