by David Korten
The financial crisis has put to rest the myths that our economic institutions are sound and markets work best when deregulated. Our economic institutions have failed, not only financially, but also socially and environmentally. This, combined with the election of a new president with a mandate for change, creates an opportune moment to rethink and redesign.
President-elect Obama has promised to grow the economy from the bottom up. That would be a substantial improvement over growing the top at the expense of the bottom. The real need, however, is a bottom-up transformation of our economic values and institutions to align with the imperatives and opportunities of the 21st century. It involves a five part agenda: clean up Wall Street, play by market rules, self-finance the real economy, measure what we really want, and convert to debt-free money.
The recent market meltdown and the resulting bailout commitments of more than a trillion dollars have focused the nation’s attention on the devastating consequences of Wall Street deregulation. This is but the tip of the iceberg of a failed economy in serious need of basic redesign.
Our economy is wildly out of balance with human needs and the natural environment. The result is disaster for both. Wages are falling in the face of soaring food and energy prices. Consumer debt and housing foreclosures are setting historic records. The middle class is shrinking. The unconscionable and growing worldwide gap between rich and poor with its related social alienation is producing social collapse, which in turn produces crime, terrorism, and genocide.
At the same time, excessive consumption is pushing Earth’s ecosystem into collapse. Scientists are in almost universal agreement that human activity bears substantial responsibility for climate change and the related increase in droughts, floods, and wildfires.
We face a monumental economic challenge that goes far beyond anything being discussed in the U.S. Congress. The hardships imposed by temporarily frozen credit markets pale by comparison.
This would be a good time to start evaluating economic performance against indicators of what we really want—healthy children, families, communities, and natural systems.
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"It is hard to admit that we have been living a lie, as to do so seems to call into question our intelligence and integrity. Yet we are in good company, for living a lie has been a chronic affliction of most members of our species for thousands of years. Let us celebrate the awakening that is key to breaking free from Empire's play-or-die dynamic." - David Korten