Friday, November 5, 2010

I'm sorry to tell you this, but our economy has cancer.

A modern, technologically advanced economy is like a human body. It has many different organs that each perform a task necessary for the whole organism to survive. None can survive without a whole and healthy organism, and this requires a delicate management of the system. The problem for the greedy is that in a properly managed  healthy economy (one that benefits all) the opportunities to become very wealthy can be somewhat limited, as innovation and the success of new products are always uncertain. It isalso difficult to rapidly gain excessive wealth, particularly through non-productive activities of the FIRE (Finance, Insurance, Real Estate) sectors when the economy is working well for all sectors.

In a living body, some diseases occur when some organs fail and others when organs operate improperly. This happens in our body economic as well. We also know that sometimes certain cells go into a malignant mode, reproduce rapidly, perform no useful whole body function, consume bodily resources, overrun their organs and spread; in other words cancer.

In 2010 America we no longer produce much of what we use. Our infrastructure is crumbling. Our health services are still too expensive and out of reach, emergency response is being cut, acquisition and spread of knowledge is a joke, the flow of money to much of the economy is diminished. The FIRE sector no longer serves a productive capitalist market economy, but exists for its own sake. Since the time of Reagan, we have led an lazy, unhealthy lifestyle (sending our productive jobs overseas), concentrated fat in a few places (income disparity), and consumed a monotonous diet of an economic carcinogen (cheap oil).

A malignancy began in FIRE, aided by a hyperactive marketing organ. We embarked on a runaway-feedback loop as rapid suburban and exurban development generated mortgage and other finance activities and associated insurance activity. To continue the beast required further real estate development and the cycle began to feed on itself.  People involved in FIRE moved to the new exploding exurbs and those who in the past would have worked producing goods wound up serving the exurbs as contractors, retail clerks, and landscapers. Thes people needed to live in exurbia, but instead of wages FIRE produced a sweet diet of credit. Exurbia required huge amounts of transportation to grow and survive, which required increasing amounts and dependence on oil. Exurbs took over local farms, requiring us to move food across state, across country, across the seas, consuming more oil. The FIRE metastasized in the government and media and academia. Those organs began to mimic FIRE, producing less while increasing useless administration. The body failed to notice because it was being drenched in the marketing hormone.

We were diagnosed in 2008. Many have balked at the mild (too weak in turns out) treatments prescribed, favoring the tax cut, tax cut and tax cut woo pushed by Tea Party quacks. The marketing hormone and oil addiction are too strong for many. But the cancer is still there, and it will continue to feed.

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