The first quarter numbers were out yesterday and economic growth was anemic and nearly non existent. Is economic growth a valid metric? Is that a ridiculous question? Not really and here is a list of reasons why:
- In a sustainable economy, the aim is not to maximize profits for capitalists.
- Economic performance should aim at full employment with sufficient productivity to secure a good life for all citizens.
- Sustainable living is about quality of life for individuals in the context of quality of life for the greater community.
- America needs to redo the economic model to fit the needs of humanity on planet Earth and not just one nation.
- Optimizing return on national resources should become the main focus of government and all of its branches to be responsive to the necessities of We the People.
“The truth is, nobody knows how much of this slowdown represents a blip that will reverse in coming months is -- and how much of it reflects fundamental weakness in the economy. The weather does a good job of explaining why businesses held back on investment during the beginning of the year, but it doesn’t explain stubborn weakness in housing or why companies aren’t exporting more. The economic recovery – now almost five years old – is replete with false starts and dashed optimism.”
The reason we are experiencing false starts with false optimism is because we are not addressing the real problem at all. America must engineer a sustainable economy under a new economic model for which leadership is failing to address the requirement.
1. In a sustainable economy, the aim is not to maximize profits for capitalists.
“A new calling for capitalism
Once a means of raising capital to finance ambitious projects for the greater good, capital markets are now driven by financial returns alone. Can a more sustainable system be found?
theguardian.com, Thursday 13 February 2014 02.00 EST
At the World Economic Forum's (WEF) annual meeting in Davos last month, Ban Ki-moon, the United Nations' secretary general, called on financial institutions to increase their investments in sustainable energy sources and low-carbon businesses. A day earlier, the UN Environment Programme launched an inquiry into the global financial system and how it could transition to a green economy.
The need for the world's financial systems to move towards a more sustainable model is clearly attracting high-profile attention. However, such a transition is an enormous task: the WEF estimates that $6tn (£3.6tn) will need to be invested globally in infrastructure, every year, up to 2030 to deliver a low-carbon economy.
So how can we encourage financial institutions to make that level of investment and move towards a sustainable economy? What are the current problems and where do the solutions lie?
These questions formed the basis of a recent roundtable debate, which was hosted by the Guardian in association with EY, Aviva Investors, Hermes and the World Business Council for Sustainable Development (WBCSD).
To begin with, participants discussed how and why the economy has become unsustainable.”
2. Economic performance should aim at full employment with sufficient productivity to secure a good life for all citizens.
“Promoting Empowerment of People in achieving poverty eradication, social integration and full employment integration and full employment and decent work for all.”
“Inequality is a hot topic right now. The reaction to Thomas Piketty’s Capital in the Twenty-First Century shows the rising tide of anxiety. But Mr Piketty devoted almost no attention to why inequality matters or whether the cost of reducing it might outweigh any likely benefits. This lacuna needs to be filled.
Much discussion of the book has focused on the political aspects of inequality. But the economic aspects also merit attention. To my surprise, the staff of the International Monetary Fund, the most staid of institutions, addressed these questions in February in a note entitled Redistribution, Inequality and Growth. It came to clear conclusions: societies that start off more unequal tend to redistribute more; lower net inequality (post- interventions) drives faster and more durable growth; and redistribution is generally benign in its impact on growth, with negative effects only when taken to extremes.”
3. Sustainable living is about quality of life for individuals in the context of quality of life for the greater community.
“Is sustainability a dangerous myth fuelling over consumption?
Our pursuit of constant growth can never be sustainable. Instead, we must deconstruct our consumer society to consume less and value more
Guardian Professional, Monday 28 October 2013 03.00 EDT
Is it possible to live sustainably if we continue our current patterns of consumption?
Tuesday 20 August 2013 was Earth Overshoot Day, the day every year when humanity exceeds the yearly ecological limits of the planet, and starts to consume and pollute more than the Earth can endure.
Back in 1972, The Limits to Growth had warned that we would soon exceed the 'carrying capacity' of the planet, and by the mid-1980s the authors were proved right. Since that time, industrial civilization has been bankrupting future generations not just financially, but by stealing an unfair proportion of their resources.
Unless dramatic changes are made, within 20 years the global supply of oil, fresh water, food and many minerals will cease to meet demand. Yet even against this backdrop, I believe that we should cease our dangerous obsession with 'sustainability'.
Life is a physically consumptive process. It is therefore impossible to live sustainably, as by pursuing our continued existence we inevitably deny at least some resources to those to come. Granted, we can choose to go about our business more sustainably, and this is a laudable goal. But every time the dreaded 's' word is thrown into a policy or strategy, it helps to spread the propaganda that there is a means of continuing to live as we do now, but in a sustainable fashion.”
4. America needs to redo the economic model to fit the needs of humanity on planet Earth and not just one nation.
“Rising labor costs mean China isn't a cheap place to make low-end products anymore. Many low-skill manufacturers are either moving to China's interior or to countries like Vietnam to reduce costs. The financial crises in the U.S. and Europe also mean there are far fewer consumers to buy China's stuff anyway.
"The growth model has to change," says Nicholas Lardy, who is a senior fellow at the Peterson Institute for International Economics in Washington, D.C., and has studied China's economy since the 1970s. "They've done very well emphasizing exports and investments, particularly property for the last 10 years, but that string has run out."
China faces overcapacity in various industries, including steel. This steel mill in the northern city of Tangshan went bankrupt in August after it expanded too quickly and the boss ending up owing banks more than $120 million. Authorities sealed the front gate with bricks.
Another big problem: China's economic growth is out of whack and unsustainable. About half of it is driven by investment, often in things like real estate and government infrastructure."