The Meltdown Blog

In his latest New York Times column, Thomas L. Friedman takes a step back and looks at the bigger picture. It's not a pretty one:

What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”

This "great disruption" has a number of nasty implications:

• Any attempts to stimulate the economy by encouraging consumers to buy more (crappy stuff they don't really need) will only make things worse in the long run.
• Decades of misdirected consumption and investment mean we now have unsustainable structures in place everywhere, not just in the financial sector or in the subprime housing market.
• Being unsustainable, these structures are essentially worthless. This obviously has implications for the value of our currencies (sorry, Chinese T-bond holders).
• Making matters worse, we've exported our growth model to the entire world. Instead of leading the way into a sustainable future, we kept pretending that billions of people in developing countries would eventually be able to enjoy the same wasteful standard of living as us.
• Finally, the people who are now in leading positions in the government, the economy and the academic sector have themselves profited enormously from our current system. It's highly doubtful they'll be willing or able to lead us through the necessary changes.

On the plus side, our lives are about to become more interesting and possibly more meaningful. In the words of Paul Gilding:

Our children and grandchildren will ask us, ‘What was it like? What were you doing when it started to fall apart? What did you think? What did you do?