Op Ed: Great Depression Looms,
Mise/Hayek Outmoded, Unworkable

Changing World Economy Drastically Alters Everything

Communication just ain't what it used to be. Photo: granitegrok.com

(EUGENE, Ore.) - Did you view/listen to President Obama Thursday as he dialoged intensely “LIVE” with many responsible U.S. citizens re health care issues, costs, delivery, problems?

That happened by DIGITAL DELIVERY.

Only NOW could that take place as it did, with rapid exchange of information leading to more complete understandings than ever before achievable.

These technologies have UNALTERABLY altered worldwide economy, culture, trade, business, social development already.

Unlike past technological change, this crept up on us silently, slowly, generally undetected:Yet it impacts every phase and change in an ever-increasingly complex world --driven by economics NOW more than ever before.

The ECONOMIST Magazine, world-recognized source summarized here, points out that this situation is crucial in the development of TWO BILLION more “middle-class” families worldwide.

Inexorable conditions are forcing economic growth in every nation --offsetting revolutionary demands --in China, India, Iraq, Iran.

The very same technology has drastically changed every basic component (and, inevitably, every policy) we used to think we knew about economic, social, cultural, governance decisions and actions.

What was true even ten years ago is far outmoded now.

Theory, policy, ANY actions based on 50-year old basic academic approaches are proven unworkable. Those same now-outmoded concepts present far greater danger to our current economic survival than anything else. They are still heavily promoted by foundations and others heavily invested in application via consultation, publishing

Modern practicing economists --led by very-recent Pulitzer-winners Joseph Stiglitz and Paul Krugman-- teach, write, publish extensively and heavily in favor of another just-as-basic, long/proven, still-in-use economic philosophy.

Their alternative is Keynesian in concept, shaped NOW to fit all these changing conditions, components and complexities.With proven success in similar situations, this new departure is far from being proven as the “magic medicine” to cure what’s fatally wrong with “the miracle of markets”.

But it is the only possible permeation and product of experience we now have at hand.

Replacing the failed neocon-driven applications of “the other one” is obviously demanded: It is irrevocably doomed by thirty past years of collapse wherever forced into fanciful applications -- as by Thatcher, Reagan and the two Bushes.

These multiple, very deep, impossible to ignore world-changing conditions, well-reported in world economic press, are major concern of governments NOW.

Many in still-developing nations must seek more workable management --forced by collapse of laissez-faire carryovers from Victorian days.

“Chicago-Boys” policies, controlled by the U.S. for its own economic ends, have failed to produce results. Sometimes those failures come from extending “Manifest Destiny” as if it would ever work worldwide!

Those pressures shape the “Washington consensus”, operating ever since the Bretton Woods agreements creating the U.S.-dominated situation. (Notably, questioned by Keynes when restrictions and operating protocols were there imposed.)

They orginated at University of Chicago, with Milton Friedman nd were first tried originally in Chile --but only under dictatorial conditions due to widespread “non-acceptance” worldwide.

Proof within democratic governance remains highly questionable, even where conditionally put into place.

Capital now flows more freely, more rapidly, and with far less restriction than ever before.

It is “digital delivery” that makes it so --to many developing nations. (If in doubt, ask YOUR broker!)

Economic, cultural. social change is now occurring much faster, more ferociously, and in unalterable fashion, than ever before in world history. THAT is what is forcing economic change and its essential growth, even as a new Great Depression shadows what has occurred.

That is a flat-fact: Unshakably already-proven, obvious to any probing examination, demonstrated daily by every possible channel open to probing observation.

What MORE proof do you need that this world is now more rapidly changing than ever?

Becoming ever more complex, dependent on far more interrelationships than ever?

Forcing new, different, demanding, costly, and still questonable new approaches to all problems worldwide?

“Where the money goes is the surest indicator of what’s happening now, and will happen in the future” is a market-study truism widely accepted.Its test in operation has proven its worth over and over again --leading to billions on billions (STILL dollar-denominated!!) for those who make it work, everywhere, every day.

You can ask YOUR broker about that fact, too.

One “making it work”, named Buffet, is close to the world’s richest investor.Another, named Gates, perhaps NOW even leading Buffet, is busily engaged in giving back billions earned via the very working tools of “digital delivery”. Do you need to ask your broker re Microsoft??

Many other entrepreneurs, at wildly varying levels, have long ago learned that the old rules and the old theories and the old policies simply do not cut it in the 21st Century.For some --especially recently--it has become a very painful lesson.

Many governments have already learned the same thing, with considerable pain, taught by the same tools: The overwhelming force of economic pressures now generated by, first, globalization; and second, unwise deregulation denying control by governance of essential financial markets. (Creating “sub-prime mortgages”, and “derivates” and “securitization” so complex its inventors cannot explain how it works OR its consequences!)

Developments via globalization have brought on the continuing collapse of outmoded approaches once the international vogue --since Thatcher and Reagan, and their day devoted to Mise-Hayek-Friedman policy.

Destructive activities in stock markets, money management, corporate control, and consolidation of industries and profit-producing private businesses --driven by greed, made possible by deregulation-- have now caused implosion in stock, housing, manufacturing, agriculture and commodity, and many other major markets, worldwide --again, a newly unique situation.

The U.S. is largely held responsible worldwide due to our laxity in overseeing and wisely controlling that fabled “miracle of the markets” ostensibly operating here.“Deregulation” denies precisely governmental power to restrain human propensities for “getting mine” --with no regard for those irretrievably damaged.

The major undermining instrument is “securitization” of near-worthless mortgage and other “derivatives”. They were widely,neatly packaged, wrapped in AA-value merit/badges by perverted rating-agencies, and SOLD worldwide by U.S. suppliers. Popularity was basically built on trust in our long-vaunted American fiscal integrity.

Doubtful about those now-obvious results?

Ask any Wall Street sucker now savoring the near fatal wounds and concussions. Many ordinary Americans have already found drained away hard-earned savings and fatally-collapsed pension plans.

The long-foreseen “sudden collapse” of the entire world economy --based on capitalism's well known, historically demonstrated vagarizes, anomalies, inbuilt weaknesses, and unavoidable unfairness for millions-- is clearly now seen to have come from these combination of newly-generated, misunderstood, little-appreciated causes.

What would YOU say NOW to academic answers-proposed, tightly encapsulated in theory; with concepts built a half-century ago; on absolutely no information re all these compelling changes? Tried tested and found wanting - basically under dictatorial conditions and controls.

Knowledgable governments worldwide are already deciding "THIS economic crisis is DIFFERENT!"

They are --very carefully-- applying combinations built wisely from economic patters proven workable in the past.

That's WHY "the new Keynesianism" is being rebuilt, redirected into worldwide practice.

We had better hope it works; we know well what happens when "the other one" is allowed full rule for thirty years and more.

Henry Clay Ruark is one of, if not the most experienced, working reporter in the state of Oregon, and possibly the entire Northwest. Hank has been at it since the 1930's, working as a newspaper staff writer, reporter and photographer for organizations on the east coast like the Bangor Maine Daily News.
Today he writes Op-Ed's for Salem-News.com with words that deliver his message with much consideration for the youngest, underprivileged and otherwise unrepresented people.