From Greg Gerritt’s site Prosperity for Rhode Island (with permission):
I was listening to Marketplace Radio tonite, just for a few minutes while I did dishes. I do not know who the guest was, but he said he was not expecting an economic turn around soon. There was just way too much bad debt around on every body’s books and the odds of the values of the houses and other assets it was based on going up enough in the near future to make everybody reasonably whole was minimal.
I have been saying this all along, so it was nice to hear it from some recognized expert, even if I did not recognize him. The simple way I described this to someone today was that the powers that be seem to want to try to jumpstart the economy, and the first thing they need to do is get house prices up so that mortgages are not underwater and people can buy and sell houses. But a big reason we got into all of this mess is that houses are too expensive. People can not buy them because they cost too much, and in order for houses to sell again the prices need to come down a lot.
Some of the economists almost get this, but what they are still in denial about, except for folks like Herman Daly and the ecological economists, is that in an age of ecological collapse it is going to be very hard to grow the economy, and it is likely to be counterproductive in even the medium term. Every resource needed for growth is getting harder and more expensive to find, or is actually disappearing. Metals, wood, fish, soil, oil. And even more, there is no place to put the garbage, or the excess CO2.
The only thing that is going to get us out of this mess is to shrink the economy and share more. Spend our money on healing the ecosystems that feed us and spend nothing on war, chasing oil, blowing up mountain tops, and feeding the greed of Wall St.
You can not end poverty without healing ecosystems, you can not heal ecosystems without ending poverty. Use Less, share more. Peace.