[Oilguy]

Fear and uncertainty create patterns, paths of their own. And societies are again in a mosaic of uncertainty — and resultant fear — over the fate and durability of the social and security frameworks once taken for granted. Mass reaction to these fears will trigger transformative change. But there will be opportunities to seize and command change.

Almost all societies in the world have gone beyond the stage where they expect stability and linear progressions of the past to long endure. Some societies — almost en bloc — anticipate the end of their security; others anticipate the end of their suffering. Few expect insulation from change. That change, however, need not be entirely inscrutable if we look at global patterns and at historical human behaviour.

Economic Patterns: What we now call “economics” determines power and conflict patterns because wealth, or the deprivation of it, determines survival, and, for those who survive, “economics” determines the relative control they may have over individual and societal destiny. Thus social behavior determines economic viability, and the failure or success of economic patterns determines social corrective or compounding action.

We are about to see an acceleration of social reaction to economic failure - a reaction to the inflexibility of policies which have failed to adjust to changing circumstances.

Many finance ministers are speaking, still, as though their national economies can perform well with just minor adjustment to old patterns. This may not be so, particularly in the West, where the rapid growth in state revenues since the end of the Cold War pushed governments down the path of highly capital-intensive programs in areas which absolutely do not contribute to national productivity in essential manufactures or primary industry, and in many cases actually constrain productivity rises. As wealth grew, and tax revenues rose commensurately, the logical approaches of governments in market economies should have been to reduce taxation and further stimulate investment.

This occurred only rarely and incompletely. Taxpayers, also benefiting from rising wealth, themselves did not demand that governments constrain their spending. The situation thus created massive state sector positions in the Western economies. When recession strikes, industry and private citizens scale back and pay the price, but governments are less flexible. Unions and state workers make themselves immune to cuts and to the realities of the “real world”.

In countries such as Greece, France, Spain, Portugal, and so on (and now the US, UK, Australia, etc.), those in the private sector who have come to rely on state handouts — and therefore become “agents” for statism, and by default are opposed to market freedom — compound the entrenched political class’ view that the state should not undergo the kind of profound self-analysis and restructuring which the private sector must embrace.

The US, Australia, Greece, and so on, as just a few examples, are undergoing per capita productivity declines just at the time when they need to be developing a strategic buffer of internally-balanced economies and the ability to better compete internationally. And there is a fear that if wasteful government spending on huge capital projects ceases, then economies will collapse.

This fearful, selfish, and ignorant intellectual process within governments has been caused by the hubris generated by unfettered control of great wealth, and the presses which print the money. But governments only have the ability, in real terms, to dominate the non-productive — or, at best, productivity-enabling infrastructure — spending. Only by returning spending power to the innovative sections of society (in other words, the people) can economies become nimble and productive.

Full article at: http://www.globalintelligencereport.com ... -Their-Own

[Ludi]

Only by returning spending power to the innovative sections of society (in other words, the people)

Which people? In the US, spending power is being consolidated into very few hands.

Wealth disparity in the US: http://www.lcurve.org/LCurveVideo.htm

[BasilBoy]

Many finance ministers are speaking, still, as though their national economies can perform well with just minor adjustment to old patterns. This may not be so, particularly in the West, where the rapid growth in state revenues since the end of the Cold War pushed governments down the path of highly capital-intensive programs in areas which absolutely do not contribute to national productivity in essential manufactures or primary industry, and in many cases actually constrain productivity rises.

Only by returning spending power to the innovative sections of society (in other words, the people) can economies become nimble and productive.

Copley is a product of the "old patterns" he describes. He implies that "capital-intensives programs" must contribute to "national productivity in essential manufactures or primary industry". If we return spending power to "the people" (which is just his way of saying private, corporate interests and they already have the spending power)...we'll continue with the tired paradigm of harvesting nonrenewable natural resources to "produce" whatever more junk will make the most profit until we smash into the ceiling and crash to the floor...

We have to re-define what we mean by "national productivity" and use our "essential manufacturers" or "primary industry" to develop a sustainable, steady state economy. There is absolutely nothing in this drivel that describes how we are going accomplish such a task...

[Keith_McClary]

Only by returning spending power to the innovative sections of society (in other words, the people)

Which people? In the US, spending power is being consolidated into very few hands.

They are innovative, in a sticky-fingered way.