The Huffington Post
Happy Days Are Not Here Again: Obama, China and the Coming Great Contraction: we have reached the twilight of the oil-industrial age .... nine interlinked planetary conditions and their boundaries, which include climate change, ocean acidification, biodiversity loss and other eco-indicators necessary for human survival and civilized development. Three of these boundaries have already been overstepped because of growing global reliance on fossil fuels, industrialized forms of agriculture, and overuse of natural resources. The world economy is fast approaching almost all of the other boundaries. ......environmentally-induced change is a far greater danger to Americans than any form of terrorism .... A combination of drought, warmer, drier weather, and warmer winters, has allowed the pine beetle to expand its range to higher elevations and devastate forests in Colorado, Montana, Wyoming, Oregon, Idaho, Utah and Washington. ..... 2010 was the warmest year in recorded human history ...... If we don't move more rapidly towards a greener globalization, then we are in for both economic contraction and environmental disorder. ...... Nearly 75% of Americans tell pollsters that they believe the earth's temperature is warming and that human behavior is responsible. Solid majorities think the nation needs a fundamental overhaul of its energy policies and expect oil to be replaced as a major source of fuel with 25 years. Yet, our political system seems unable to act and our president unable to lead.....the Republicans do not have a viable national candidate or a message that is not simply negative and backward looking
Nouriel Roubini: Double-Dip Odds Now Greater Than 40%, GDP To Be 'Pathetically Lousy': there's hardly anything the Fed can do about it because they're "running out of policy bullets"
The banks might have paid out most of the bailout money, but they have not paid for lost economic activity. They can't. It's too big. The damage that was caused to the economy is still there.
When the meltdown started, noone seemed to have the slightest clue what was going on. The entire system was within hours of going bust. One bank collapsed first. One department within that one bank first collapsed. It was one unit within that one department. Just like we don't know about the first few seconds of the Big Bang, we don't know about how the meltdown really started. For all I know, it could have been an act of cyber terrorism, some bug let loose into that one unit of one department of one bank.
The financial system did have systemic malaise. And I personally think it started with the Iraq War. Bush spent a trillion dollars he did not have. That sent the wrong signals to the market. And the market started engaging in gimmicky capitalism. There is a direct relationship between the political act of trillion dollar wars, and the bad behavior on Wall Street.
Part of the systemic malaise was racism. Global microfinance could have absorbed excess capital. Global infrastructure could have absorbed excess capital. But instead the piles of excess money was pumped into real estate in America creating some major sleight of hand. Nefarious ways permeated the culture.
Global microfinance and global infrastructure both would easily have given annual 10% returns.
The banks were bailed out. They paid back the bailout money. And Wall Street reform has been carried out by Congress. But the stimulus bill that was supposed to take care of the rest of the economy did not do the task. It is because the stimulus bill had some fundamental flaws. There was this thinking that if only you paid people their unemployment benefits for a little bit longer, if you paid the salaries of the firefighters, teachers and police officers a little longer, then the economy would rebound on its own, and then we will have crossed the river.
But this was not like the 1992 recession. This was not a recession that happens about once a decade. This was one that happens about once every 70 years.
The stimulus needed to be about massive public works programs. What would be the Tennessee Valley Authority of today? Installing solar panels on a mass scale might be one such thing. The government needs to get down and dirty and retrain people for new jobs.
A second stimulus is going to be cheaper than a second dip.