One of my guilty pleasures is watching Top Chef and Project Runway. They're the only reality TV shows I watch (honest), and I love both series.
I am particularly fascinated by the ingenuity of the contestants in these shows. Make an amuse-bouche using a surprise box of squid, canned pumpkin, and horseradish. (How can that possibly be good?) Go to a party store and make a couture dress out of ribbon and Dixie cups. (Really? Dixie cups?)
Every time I watch, I am inspired to get creative. If I don't know what to make for dinner, I make it a challenge: “You have 20 minutes. Close your eyes, grab one thing from the pantry, and make a meal around it. Ready, set, go.”
It's fun. And it forces me to innovate.
I've been thinking a lot about creativity over the past couple of weeks after the economy got some dour news in the form of declining home sales, lower construction activity, and rising unemployment. And in response, Federal Reserve chairman Ben Bernanke said the central bank would be willing to take new “unconventional measures” to boost economic growth if necessary.
The Fed is ready to help prop up the economy? Wait. Isn't that its job? Sure it is, but Bernanke says that the Fed hasn't yet whipped out its creativity. In fact, he thinks there are still some innovative options out there. He specified three of them:
• Grow the Fed's $2 trillion balance sheet by buying longterm securities.
• Tell investors that the Fed will keep its benchmark interest rate near zero for “a longer period than is currently priced into the markets.”
• Reduce the already low interest rate paid to banks with reserves at the central bank.
Um, I don't mean to be glib, but aren't these tactics similar to what the Fed has always tried to do: Prevent further economic deterioration by playing with interest rates? Will we ever develop truly innovative solutions?
The answer is a resounding no, according to The Guardian's astute economics blogger Richard Adams. Why? Because the Fed acting alone is useless. Adams writes: “There's only so much that can be done by monetary policy, the part of the economy under Bernanke's domain. There's an old joke that relying on monetary policy to run an economy is like playing golf with only one club. The missing club is of course fiscal policy.”
In other words, for all of Bernanke's posturing about his plans to ensure economic security, he can't do much without the White House working to resolve the economy's twin towers of trouble—unemployment and the housing market. Nearly one in three homes are under water, worth less in value than what their mortgage papers indicate.
And unfortunately, things will remain that way for the foreseeable future. Heading into the mid-term elections, neither party will advocate for any substantial economic plan, particularly not after the first stimulus package was attacked for being more about Wall Street than Main Street.
That's not to say there are no creative ideas in play out there. On a daily basis, companies in the throes of this recession are coming up with innovative ways to boost their bottom lines. (We profile a number of those ideas this month in our annual report on CFO Strategies.
Unfortunately, when it comes to creativity in action at the top, it looks like I may have to stick with reality TV.