After I posted the previous entry someone who read it sent over to me a column published earlier this week, and something snapped in me. I spent a few undergraduate semesters studying basic economics — macroeconomics, microeconomics — and I don’t claim to have any vast insights or critical perspective. But, …

As the previous entry demonstrates, I have a lot of interest in understanding how economic problems develop, and how they can be avoided, and lately how they can be addressed effectively and quickly. We’ve been trying to solve the current economic problems for about two years, and — to be generous about it — it’s not working.

“To rejuvenate the economic base, allow industry to compete successfully again and re-grow jobs, the U.S. should launch an ‘advanced manufacturing plan’” writes Andrew N. Liveris, chairman and CEO of The Dow Chemical Co., in the column I mentioned.

I’m sure Liveris is smarter, more experienced, and more well connected than I am, but is there anything in his column that hasn’t been said for the past two years? Does he think we can all come to consensus on dreamy items like “new infrastructure that leverages private investment in plant and equipment, … R&D that's cutting edge … education that leads the world …” when all the misery of this period has not brought us to any clearer insight about the causes of our economic problems?

I think it’s time for someone to argue that macroeconomics has failed. There may be numerous reasons for this, but to me it’s no more complicated than this: there is too much information spreading too quickly for individuals to be able to make rational, informed decisions. Risks are greater because facts change without our ability to incorporate them into our judgments. We rely instead on longstanding principles, which means that microeconomics is ascendant.

For example, the federal government spends billions to stabilize banks so that they’ll lend to businesses. (Macroeconomics at work.) But they don’t lend to many small and medium-sized businesses, which then suffer or even fail, and the economic problems persist.

Banks have standards for lending money. (Microeconomics at work.) They aren’t lending because in this chaotic economy they cannot achieve confidence in the companies seeking loans, and/or in the economic forecast for the period of the loan.

As a counterpoint to the big ideas from Dow Chemical, take a new look at the continuing metalcasting melodrama that is Grede Holdings. There has been a lot of pain and sacrifice in that story, and there is no guarantee of success. But, the realistic, cash-flow focus described there is a tribute to microeconomics, and — to me — a lot less risky than another "advanced manufacturing plan."