Archive for August, 2010

Ongoing Economic Problem

August 10, 2010

The problem here is the MBA crowd and conservative friends are so focused on the illusion of profit that no one is allowed to consider how to fix a profoundly broken system. Modern capitalism is built on the idea that development is without end, while the US economy has evolved to services. Development has pretty much ended except for the fringe stuff – Apple can make a few billion on a new i-phone … but it won’t power a country, or a world. Either someone must find something new to develop which savers will pour money into … like space, or we have to develop an economy which is no longer totally dependent on development. In any case the “development” engine was always cyclical swinging constantly between boom and bust, often more driven by the whims of wall street than any perversion of economic reality. Wall street often sees boom where there is bust, doubters check out the, real-estate, derivatives, and oil busts – stampedes to profit do not an investment make. The first step to fixing the problem is ending the political polarization so an analysis can actually be done. The second step is to demonstrate to the masses that economics is actually counter-intuitive, instead of the simple-minded solutions of the conservative talking heads. Unfortunately, solving this part of the problem may require a depression level economic event, because clearly none of the conservative crowd has wrapped their limited brain power around the idea their economic theology does not actually work.