UCLA Anderson Professor Richard Rumelt has a new book out called "Good Strategy, Bad Strategy." In June he told CNBC about the book. "It's really about strategy, not only in business, but in politics, in military affairs in non-profits," Rumelt said. "I'm trying to say that there's a core of good strategy in all of these different activities and that pattern is a recognition of what is the problem that you're trying to overcome."
Rumelt also has a newly published article in Fortune (linked here via the affiliated CNN Money). In it, Rumelt laments recent U.S. fiscal policy, comparing it to the strategy employed by a truck driver he once knew, who used black-capsuled stimulants euphemistically called "west coast turn arounds" as they supposedly allowed a driver to go from coast-to-coast without sleeping. Of course, Rumelt notes, eventually the truck driver passed out and needed reviving as chemical stimulous only lasts so long before the eventual crash.
In Fortune, Rumelt writes:
Like its chemical analog, an economic stimulus is a temporary jolt aimed at helping the economy over a rough patch, with the cost of the jolt paid for out of normal-times incomes. Unfortunately, like Paul (the driver), the U.S. has been taking economic stimuli every quarter for a decade, pretending that a sequence of temporary jolts is the same thing as economic growth. But true per-capita economic growth is the outcome of productivity-increasing innovation. You cannot engineer true economic growth by fiddling with fiscal or monetary policy or by financing excess consumption with shaky loans.
He then concludes:
A decade of constant stimuli has produced the same effect as Paul's west-coast turnarounds -- a series of highs and crashes followed by a comatose condition that no longer responds to stimuli. Despite what various politicians and experts tell you, real productivity gains and real economic growth do not come from taking stimulants.
To read Rumelt's entire Fortune article, please click here.
To purchase "Good Strategy, Bad Strategy," please click here.
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