Jared Diamond on Decisions

Spend a few minutes and read (or listen listen to) "WHY DO SOME SOCIETIES MAKE DISASTROUS DECISIONS?" by Jared Diamond, author of "Guns, Germs, and Steel".

The most insightful passage of this essay (IMO) is his description of "creeping normalcy", or problems that arise slowly over time in such a way that most people cannot perceive the downward trend. If some condition gets only slightly worse each year, it is hard to notice that something has become markedly worse over a period of many years. Diamond uses environmental anecdotes to make his points, but the principles could just as well be applied to economic decision making.

For example: Slowly increasing government expenditures that eventually lead to the loss of economic freedoms for citizens. It's not as though from one year to the next the percent of income you owe to the government increases drastically. The accretion is slow, but the outcome is disastrous (think deficit spending, increased federal spending). In fact, this is the basic premise behind F. Hayek's "Road to Serfdom".