Author, The Happiest Man in the World: Life Lessons from a Cultural Economist
It seems to me that the true mark of wisdom is being able to see miracles in what everybody else sees as problems. That requires a new set of eyes. Norman Vincent Peale used to say, “How you think about a problem is more important than the problem itself – so always think positively.”
Problem-solving is, in reality, only one part of the larger problem issue. Before you can arrive at the problem-solving function, it is necessary to correctly identify the problem and then accurately define the problem. Without the identification and clear definition of the problem, you will not be able to move from a given state to a desired goal. Most people would agree that problem-solving, sometimes referred to as a higher-order cognitive skill, is one of the most complex processes of the intellectual function. It is a skill, indeed, and we usually are required to concentrate and work hard to acquire that skill because our normal tendency is to get so busy trying to mop the floor, we ignore simple acts like shutting off the running faucet.
I’ve been encouraged by an adage of the old philosopher, Voltaire: “no problem can stand the assault of sustained thinking.” Perhaps that philosophical approach inspired Albert Einstein in his problem-solving: “It’s not that I’m so smart, it’s just that I stay with problems longer.”
People sometimes ask me about what I was doing in Brazil before I started Project C.U.R.E. I was engaged in the exciting adventure of economic problem-solving. My prior economic commitments in the countries of Zimbabwe, Ecuador, Peru, and Venezuela acquainted me with the concept of Debt for Equity Exchanges, sometimes referred to as Debt Swaps.
When I went to Brazil, I began working directly with Brazil’s president, Jose Sarney, and his chief economist, Antonio Bacelar. Brazil was experiencing runaway inflation of 3,000%. They had borrowed millions of dollars from US banks and were incapable of repaying those loans. They were in real trouble. Our first two steps in problem-solving were to identify the problem, then to clearly define the problem. Once we had accomplished that, we could start on solving the problem.
Many of the US banks had been coerced by our government, the World Bank, and the United Nations to make sizable loans to foreign countries as economic relief measures. Instead of our government simply handing over large sums of money to the United Nations who, in turn, would hand out the monies to foreign countries, they pressured our banks to make the loans directly to those needy countries. That sounded like a great problem-solving strategy to bypass the inefficiency of the United Nations and the World Bank.
The banks, following prudent underwriting procedures, insisted that the sovereign countries sign promissory notes guaranteeing the repayment of the loans. Perhaps the United Nations or the World Bank could have allowed the foreign countries to default on the loans by just writing them off as “bad debts.” But individual banks in America were under the tight scrutiny of the US Federal bank examiners and federal agencies like FDIC, and could not just write off their bad loans.
Under the Nixon administration in the 1970s, when the US economy was cut loose from the gold standard, banks were allowed to use foreign sovereign debt instruments as credits toward their necessary fractional reserves. But it was considered high risk to make foreign sovereign loans, and it was utter disaster for the US banks should those foreign loans ever go into default.
Not surprisingly, by the mid-1980s, many of the foreign countries were in default to the US banks. Some South American governments simply shrugged their shoulders and said, “Sorry, we can’t make good on our loan repayment commitments.” Once the foreign loan instruments were declared non- performing loans, the US banks had to start writing them off. If they had counted them as part of their fractional reserves, the bank’s total lending ratio would shrink by approximately twenty times the amount of the non-performing loan. Their assets and lending powers would begin to implode.
The other part of the definition of the problem included the fact that the US banks could not accept and hold foreign assets to satisfy the loans.
Now for solving the problem: We poured our efforts into putting together the Libra Proposal for Brazil that utilized the concept of Debt for Equity Swaps. An outside group of individuals, or an entity, would agree to purchase the bad loan at an attractive discount from the US bank, and their new note would heal the bank. Thereupon, the new holders of the foreign note would take the note to Brazil’s government that owed the debt and agree to swap the note for some of the country’s assets to settle the debt. Those assets could include government-controlled exports; natural resources like oil concessions, mineral rights, and raw land; real-estate, government-owned buildings, fishing rights, rights to ports and harbors; or any other service or commodity of equally agreed-upon value. Simply, the indebted country could use their own assets to settle the debt where they could not come up with cash to make the payments . . . everyone was better off.
The key seems to be to focus on the identification and the definition of the problem with new eyes of creativity until the solution of the problem becomes apparent.
Dr. James W. Jackson often describes himself as "The Happiest Man in the World." A successful businessman, award-winning author and humanitarian, Jackson is also a renowned Cultural Economist and international consultant, helping organizations and governments to apply sound economic principals to the transformation of culture so that everyone is "better off."
As the founder of Project C.U.R.E., Dr. Jackson traveled to more than one hundred fifty countries assessing healthcare facilities, meeting with government leaders and "delivering health and hope" in the form of medical supplies and equipment to the world's most needy people. Literally thousands of people are alive today as a direct result of the tireless efforts of Project C.U.R.E.'s staff, volunteers and Dr. Jackson.