This is not the time to cut public expenditures, on the contrary what has been done so far to stem the tide is by far too little and still based on the mistaken beliefs in the self-healing forces of the free market. One after the other markets disappear for lack of funds and purchasing power. Markets which close down, cannot be stimulated, they need to be rebuilt or be replaced by new markets for things that have been lacking in the past. The World's balance sheet is imploding faster than anyone would have expected. Th value of accumulated wealth is crashing in unison in all countries. This calls for concerted international action and there must be a conductor to stave off mutual exclusive destructive ruinous national adjustment policies. This is not the time for retrenchment and cost cutting and government budget balancing efforts.
George W. Bush has given the green light. The free market fundamentalists haven thrown in the towel. Now is the opportunity to take the initiative to steer wealth creation in a new direction. Profuse investment opportunities wait to be started to create yields for generations to come. This is where the money is coming from to pay for them now at the start. With the value of private claims on the future declining all governments of the world must step in to bridge the cap until more stable expectations encourage private initiative again.
There is still doubt among those who look at statistics whether we are in a recession. Anyone who dares to travel outside the major metropolitan centers should have know for a long time already that vast areas of the land were shrinking in an economic depression for quite some time. The concentration on a handful of aggregate numbers misled policy makers to believe in the strength of the fundamentals as they saw them. South Bend for example never recovered from the closing of the Studebaker factories and the University there cannot create enough weight to lift up the rest of the area. Got to upstate New York an you will find villas for sale reflecting the prosperity of a hundred years ago. Villas which – not so long ago – would have cost $50 Million in Greenwich, NY cannot be sold for $50,000 one thousandths of that price, somewhere six hours from Greenwich to the North West. No wonder resentment is building against the East Coast elites.
Anyone who has studied the emergence if successful innovations knows they need nurturing at he beginning. The innovations called for at this stage are so huge that none of the venture capitalists who shall survive the financial crisis will be in a position to help. The challenges of new forms of energy production and the challenges of more efficient use of energy in housing, industrial production and transportation are amazingly complex. They call for a worldwide project funded by government grants on a magnificent scale. It should become clear that the forces of the free market have come to a point, at which reconstruction and development is not limited to the poorest countries on the contrary: the reconstruction of practically everything produced in the past is most urgently needed for those who have accumulated the most.
Don't worry about poisonous assets in the hand of financial services; worry about poisonous social tensions between the rich and the poor. Worry about poisonous food and poisonous emissions. Too much time has been wasted to diagnose problems that had been obvious for so many years – remember "Silent Spring" of 1964 – and the pseudo-religious fervor of some of the activists for change for the better hasn't helped. These are global problems which need rational analysis and planning, financing and coordination on a global scale.
This will be a struggle and competition should be encouraged. But the frivolous use of the word "war" should be avoided. If rational planning and coordinated resolution of the challenges cannot be achieved within a very short time the spread of hopelessness frustration and hate within nations and among the governments of the world would become the real danger. The scatterbrained misuse of the word "war" has resulted in much damage already. The «War Against Terror» needs to be replaced by an Initiative for Opportunity for those who feel left stranded in the struggle for aimless enrichment without any spiritual values. The «War Against Drugs» has to be understood as a fight against the pain of hopelessness and hopelessness is to be feared mor than fear itself, because it will result in desperate actions which can spin out of control in a very short time. The world is on the precipice of another conflagration on a scale beyond anything seen heretofore.
This is where the metaphors of "Katrina" and "drinking sand" can help to avoid staring into the future with desperation. The world leaders are preparing a miserly pile of sandbags to try to fill a few holes in the dams but they should ask themselves if the system of levies and locks works in the long term to tame the Mighty River. The experts who help them prepare their decisions feel bound to the numbers, which seem to tell them what is happening in real life. They are the ones who are drinking sand, because the numbers on revenues an expenditures in the aggregate do not reflect real life. Drinking sand solely going by the numbers computers have already taken over to create the meltdown in the international financial markets in eery reminiscence of HAL in the movie 2001. Anger and frustration, fear and hate cannot be measured with numbers on income and prices or the regional distribution of SAT-scores. There is an urgent need to understand the root causes, that drive people to kill innocent bystanders to further their causes. Instead of "price discovery" for worthless assets the "ease of discovery of evil" needs to be questioned; because once we know "evil" we know where to go to war. In the desert of economic an social numbers nobody will be able to find the fountains of life. The easy emergence of enemies to be fought to extinction cannot be explained from the ratio of profits to wages: This is why the next US president should talk to the supreme leader of Iran or why Putin and Sakaashvili should be put into a room and not be left out until they settle their differences in a peaceful way. Beware of historians because their narrative always leads to believe in the triumph over "evil". Take it as a fact that life always faces irreconcilable differences and peace cannot mean that "evil" is conquered because "evil" is a construct of the hateful. The hopeful do not fight evil but create new opportunities that open the way into a better life.