Thursday, June 11, 2009

Design for a New Economy

By David Korten and Doug Pibel

Politicians and the business press are looking for signs that the economic crisis is over and we’ll soon be back on track. Federal Reserve Chairman Ben Bernanke speaks of “green shoots” of recovery. President Obama sees “glimmers of hope.” All the massive infusions of borrowed stimulus and bailout money are aimed at the dream of getting us back to where we were during the recent “boom.” Do we really want to go there? And even if we do, is such an economy realistic today?

Yes, the bubble economy of the ’00s created mountains of paper wealth. Between tax cuts for the wealthiest and increasingly exotic (and risky) forms of investment, the richest fraction of Americans did very well, indeed.

But during that boom, incomes stayed flat for the overwhelming majority of Americans even as productivity soared, millions lost health care coverage, costs of energy, housing, food, and education climbed, and debt reached record levels.