joes

Destruction of Wealth?

It is interesting to see the theme of the "Great Depression" woven into so many postings. There are two parts of that story, what was lost that is the current focus (correctly and understandably) and what is so hard to feel in these times, what will be gained by the transformation of our economy and as a result our society.

So many posts and articles also talk about how the "wealth bubble" was built on an unsustainable model, where the selling of "packaged" money was worth more than "unpackaged" money, with the truth being that it is until someone has to open the package.

Understanding this so quickly after the fall should help us to attack the root causes of the systems problems and redesign something that works better, not perfectly because that is impossible, but something that is measurably (by our current almost certain to be flawed but better than guessing methods).

On thing to consider is that the last recovery, the New Deal, was built on a set of firm principals that spread the opportunity, which spread the wealth through a more palatable manner than welfare payments. Jobs, training and yes, even loans were used to allow businesses to thrive.

Now that model would be hard to replicate, but not impossible, because new businesses that can support people need to look for new ways to create value to present to the market. Whereas corner stores and restaurants used to work at local ownerships level that is no longer true.

Regulations and restrictions could work but that would be the wrong application of Government, innovation into other things that people can do, maybe some based on the cheap communications and data portability enabled by the Internet.

What ever the case it will require an entire country (and world) of people that care enough about the future and other people else to think about the long view, if we get that right the old New Deal will pale in comparison to the New New Deal.