Thursday, September 18, 2008
Steven Pearlstein of the Washington Post:
" What we are witnessing may be the greatest destruction of financial wealth that the world has ever seen...In the end, however, there is only so much the government can borrow and so much the government can do. The only other choice is for Americans to finally put their spending in line with their incomes and their need for long-term savings. For any one household, that sounds like a good idea. But if everyone cuts back at roughly the same time, a recession is almost inevitable."
The categorical imperative, the writer reminds us, doesn't hold when it comes to saving and spending. If everyone lives within their means, that's bad for growth--which is the American dream, as we've historically defined it.
However, let's take a step back. As more and more people are finally, traumatically, being forced to realize, the single-minded pursuit of MORE bad for children and other living things. It's bad for families to spend more than they make and to forgo savings in favor of momentary pleasures. It's bad for other living things because in our current economy, economic growth is based on unsustainable practices of resource extraction, of fossil fuels and every other natural resource.
I hope I'm not a bad citizen if I'm more worried about the survival of our civilization than about the health of the US economy--more worried about a Cretaceous-level mass extinction than about a Depression-level financial crisis. The best experts tell us that both are at stake here.
Crises create opportunities. The opportunity here is to create a sustainable economy. Growth as we know it (drill, baby, drill! Drive up that S&P 500!) has to be replaced by truly intelligent design and sustainable development.