Posted by: union03g | July 17, 2009

The Scholarship Of Collapse

Here are some notes from the Monthly that really takes you, for a moment, outside the parameters in which Americans tend to think. It dissolves American Solipsism. A few of his points below:

  • Economies can not simply grow into perpetuity because of innovation
  • We have already past a plateau or point of “terminus” in our economic growth and the last ten years was only steroidal
  • It is okay that America gets overtaken by another economy – it is natural
  • Sunk-cost theory explains why Obama is pouring money into the rust belt and the old-economy.

“In my opinion the United States economy passed its hidden terminus with the bursting of the technology bubble in 2000. All of the power and thrust in the economy since 2000 was provided by nothing more than an expansion of credit via two, typical vehicles: War and Domestic government spending (Guns and Butter), and, artificially low interest rates provided by the central bank. This concept can be extremely difficult to accept among people working in highly innovative, highly productive areas like technology, venture capital, engineering, and other globalized product and service industries. What’s important to understand, however, is that the economy we made in the United States needs to serve 300 million people. If a good portion of that population is living off the housing and automobile economy, unsustainable at high levels, it matters little to the problem of a fundamentally unsound economy that Google, SunPower, and Honeywell are indeed doing wonderful things in technology, solar energy, and engineering. Moreover, it seems quite likely now that the expansion of credit post 2000 was in many ways a collective attempt to replace the trailing loss of our manufacturing economy. Yes, the US remains a hotbed of the best innovation but the acceleration of the financial and financial product economy was very likely an overshoot, past the hidden terminus in the structure of our system. To use a phrase that was once somewhat unfairly said about California by Gertrude Stein, we have discovered that there was no there, there in the US economy.”

This is a really good series of thoughts.

The subscription is only $1500/year!

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