Looming Challenges

People who make money from fomenting and exaggerating political controversy are having a marvelous time with the “stimulus package” President Obama just signed into law. But all the boom and sparkle of the fireworks they generate is, I believe, drawing attention away from issues that need clear analysis and appropriate action.

It should be clear, for example, that if we want public services we must pay taxes. It should also be clear that the tax policies of the last eight years have been disastrous to our economy. It then follows that more of the same will not make the economy better.

I would also like to point out that many companies are downsizing or closing altogether because of a lack of demand for their products. A lack of customers. Not enough people willing (or able) to spend money to buy what they are selling. This cannot be fixed by giving more money and incentives to those companies. The companies were doing well – they had products that had been successful – the problem is that ordinary people became so hard-pressed that they could no longer afford to support those industries.

The simple fact is, without a large population with disposable income to spend, our economy cannot work. Emphasis on the large. When the 10% already own 90% of everything, the 90% can no longer support them.

The rich need to wise up – if they want to live in a functioning capitalistic society, they must tax themselves and their corporations enough to support a large and active middle class of entrepreneurs and consumers. Without them, the system implodes, as the present crisis makes perfectly clear.

That said, it may be too late. I think the present financial crisis will turn out to be different from previous recessions, because the reasons behind it include a very significant difference – the looming challenges of resource depletion and climate change.

Neither of these can be met with our present strategies – including the “stimulus package” – and certainly not with “business as usual”. To the extent that the present package encourages green energy and relocalization it will help, certainly.

But we desperately need to be learning how to live abundant lives within a “steady-state” economy, not stimulating the financial sector to restart economic growth.