Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Wednesday, December 30, 2009

Yesterday, today, and the economic tomorrow.

Yeah, we've got our "Great Recession" going on, stemming from the housing bubble, toxic assets, derivatives, and all the other leveraged financial crap that transpired after Phil Gramm gutted the financial regulations that had kept all that stuff at bay since the Great Depression.

It's a mess, and people are understandably freaking out about it.

The thing is, the mess goes a lot deeper than many people think. What only a few particularly smart people have clued in on is that the Great Recession is triggering a restructuring of the global economy, one that is set to un-do many of the artificial advantages that American consumers have enjoyed for a long, long time.

I wish I were one of those particularly smart people--I'd have known what investments to short-sell when this whole mess started--but I'm not. I had it explained to me by this unusually cogent diary on DailyKos. As the diarist remarks:
The problem is that the American middle class is broke and unable to continue to over-consume.

He then goes on to lay out exactly why things aren't going to go back to the way they were. It is sobering reading. If this were more widely known, people would be freaking out about the economy even more than they are.

He also explains why some of the actions taken to remedy our current economic woes are fundamentally misguided. They're band-aid solutions that seem to be making things better but aren't really because at their core they do nothing more than prop up systems that are in the process of failing. They're just delaying the inevitable.

That doesn't make them useless; better to give ourselves more time to come to grips with whatever shape the global economy finally congeals into.

But those band-aid solutions come with their own dangers. Chief among them is that they create the impression that we can go back to how things were. We can't. Go read that DailyKos diary and see for yourself why the math just isn't there.

It's perfectly understandable that in times of turmoil, people look to the comfortable past and say "we want it to be like that again!"

Of course they do. The economy of yesterday was pretty nice for us Americans. Today's economy is a mess. I don't know what tomorrow's economy going to ultimately look like, except that it's not going to be anything like yesterday's.

We can sit around crying for the old days and vainly trying to step backwards into the past, but I don't think that's going to get us very far. Rather, we should face forward and do our best to figure out what tomorrow's global economy is going to look like, so we'll be ready for it when it gets here.


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