There is an elephant, no a T-Rex, in the living room where we are talking about the current financial crisis. It seems as though there are two basic, and incompatible, goals being pursued: the economic elite is trying to wrap up their business of unprotecting middle class wealth and sucking it into their own coffers using the tax system – even as the financial system is going into a tailspin – and the rest of the active players are desperately trying to find the buttons to push that will return to the growth economics that we have been absolutely devoted to as the only possible way to proceed. The T-Rex in the room? Economic growth is a failed model that is nearing its end. There must be a new ecologically sustainable model for economic order.
The present events are ultimately not about interest rates, credit liquidity, money supplies, reserve currencies, upside down mortgages, and all the other accouterments of collapse. We are hitting a wall. Our efforts are devoted to resuscitating a failed economics and continuing to act in self-defeating and destructive ways.
The end of growth is staring back at us from the foggy future. This economic failure is the direct result of there being fewer and fewer ways to continue to grow economies, so the economy's parts are beginning to eat each other. Capitalism exacerbates this process, but it would happen in any economic system. Capital (in any system) looks for places to go so as to either gain in value or to, at least, rest and not lose value. There are no more empty continents. We will not be able to use Mars or the Moon as new centers of growth.
The world is full of people. There are no places left to increase into. Every spreading of the human foot print now is a destruction of the planet’s potential. For thousands of years the ‘equal and opposite reaction’ was small and generally, if not locally, benign. No more. Small actions now multiple into major consequences. The earth felt it not at all when a million people ‘jumped in unison,’ but when a billion jump, when 6 billion jump, we all, from bacteria to elephants, feel the shaking.
This is an economic reality. Ignoring it, as do economists, is like doctors ignoring germ theory 200 years ago.