Monday, July 16, 2012

NTTATS update: further thought

When I first started talking (here and elsewhere) about the concept of "No Two Things Are The Same", one of the more valid questions/criticisms was concerned with the practical implications: what can I do with this knowledge?

At the time, my best answer was a somewhat vague "well, you can approach new ideas and decisions armed with the knowledge that No Two Things Are the Same", I'm happy to report that I feel the same way, but have some more concrete examples.

It's well know and accepted (and reasonable) that folks like to use examples (precedents, analogies, etc) to make a point, or to suggest best practices, or offer a contrast, and so statements like the following are pretty common:

During the credit crises of 2008+, the banks of Canada weathered the storm much better than the banks in the States - we should model our banking system on Canada's!

New Zealand has this awesome, pro-business tax policy and everyone there is happy - we should follow this model in the US!
I chose these two examples because they are similar in my view: the population of Canada is about 1/10th that of the States, and the GDP of New Zealand is a rounding error to the US.  Further, the demographics and urban/rural distribution of Canada creates a far different banking scenario than could apply to the States.

In neither case does the surface difference between the US and the other countries automatically invalidate the suggested policy, but those differences point out a very different reality on the ground in the example countries.

Based on my anecdotal experience, some folks are naturally more skeptical / sophisticated about applying some basic criticisms to suggestions like those above, but many people aren't...they hear "Canadian banks remained well capitalized" and they readily accepted the suggestion that the Canadian banks were subject to the exact same stresses as those applied to US banks.  So a more thorough acceptance of NTTATS in society could serve to shift the balance towards more critical thinking.

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