We are encouraged to spend our way out of the economic recession—to consume our way back to normal. This recovery recipe has been used for decades. During the recession in the 1950’s, a reporter asked President Eisenhower, “What should citizens do to help the recession recede?”
The President replied, “Buy.”
The reporter asked, “Buy what?” Eisenhower replied, “Buy anything.”
We have trapped ourselves in an economic model that requires over-consumption to fuel its progress. Unfortunately, the collateral damage of funding relentless growth is often excessive levels of personal, institutional, and national debt. The way we deal with debt says a lot about the basic assumptions baked into our current economic model.
European Debt Crisis (2:37 minutes)
Australian comedians John Clarke and Brian Dawe explore the European debt crisis in their mock quiz show skit. Using real debt numbers, they leave the central question unanswered: “How can broke economies lend money to other broke economies who haven’t got any money, because they can’t pay back the money the broke economy lent to the other broke economy and shouldn’t have lent it to them in the first place because the broke economy can’t pay it back?” Good question.
But don’t we have to bail out failed corporations and countries? Otherwise, untold jobs would be lost, life savings would be wiped out, people would lose their homes, and so on. Nations and financial institutions are deemed to be “too big to fail.” So we bail them out to save ourselves. And wait for the next crisis. There has to be a better way.
David Korten has been writing about the futility of propping up our current economic model for years. He is an American economist, author, former Harvard professor, and prominent critic of the unintended consequences of corporate globalization. His best-known publication is When Corporations Rule the World. When I read it about 15 years ago, it awoke me to the inherent deficiencies of our current economic model.
In his latest book, Agenda for a New Economy, Korten lays out a 12-step program for radical reform. Among his recommendations are the 10 points in the adjacent slide. He is treating the system, not the symptoms. He looks at upstream systemic barriers to generating real wealth for Main Street, versus phantom wealth for Wall Street. He provides convincing arguments for a transformation of our current global economic system to one that serves citizens instead of the topsy-turvy tail-wagging-the-dog situation we have today.
In my last two blogs, I outlined Hazel Henderson’s 7 Reforms of the Global Financial System and Michael Moore’s 10-Point Recovery Plan. Today, I outlined David Korten’s 10-point economic recovery plan. I am continuously amazed by the depth and wonderful simplicity of proposals like these. They are both remedial and preemptive. They are a prescription for a new, more sustainable economic system. The question is how we get from there from here.