Today’s newspaper indicated that the top five economic powers in our now ailing G8 club of nations, are collectively spending $2.5 trillion (money they do not necessarily have) to prevent their economies from contracting an average of 0.7% next year. This, despite the fact that the money poured in to•date has only sent stock markets downward and unemployment up. The stimulus is aimed at getting people to continue borrowing and living off “future income”.
It seems like we are in a state of panic and that growth for growth’s sake must be maintained at all costs, or else people will not sleep well at night. So what if an economy contracts by less than a percentage point after almost a decade of steady growth? Does the world end? With this projected contraction, if my math is correct, we will still be ahead of where we were last year. All nations are in the same boat this time around, so there should be no one getting ahead here if growth stalls. Didn’t even the Almighty take a day of rest (i.e. no growth) on the seventh day?
These large sums of bailout money also seem to be going to the very firms and “old world” industries that helped bring us to this impasse; these behemoths pursued growth in fear of being left behind and began to dabble in “financial drugs” – a.k.a. toxic mortgages and utopian financial derivatives. No wonder the stock market is less than enthusiastic with the rescue efforts! I wonder if this subsidy money would be better spent on “new world” technologies, and in re•tooling and re•skilling workers thrown out into the unemployment line from old world industries: i.e. investing in areas such as sustainable energy, manufacturing fuel efficient cars, greening offices and public spaces, re•engineering commercial operations with the accent on conservation not consumption – I’m sure there is an inexhaustible list. Oh, and stopping those stupid wars that are costing as much as the bailouts.
But this shift in vision needs courage and it is so easy to pour good money after bad under the illusion that with sufficient sand•bagging the leaking will subside. Let someone else deal with the financial debts created by today’s commitments, tomorrow. We did that with the environment, now let’s do it with the economy. After all, in the developed world, we do not live with tomorrow in mind; it’s all got to happen today, and today has to be better than yesterday – that’s how we measure progress. What a pity.
My fervent hope is that the guys with the purse strings will pause, take a deep breath, look back at history and put today’s events in context. Fear, especially, fear communicated, goes viral in today’s interconnected world. And when I see global financial leaders stumble on TV groping for words, I wonder if they do more damage to confidence than economic factors do. This downturn has been good for helping purge the world of greed (at least, temporarily –alas, it will rear its head again in the good times). For now we need to ride this downswing and plug some leaks in regulation and re•look and re•double our investments in the industries of tomorrow. And perhaps, adopt the spending habit of “buy what you can afford”. A downswing is called just that because its own momentum forces an upswing in time and no amount of bailout money into “what was” can make that happen any faster.
