Busted: 9 Economy Myths
Reinflate the Old Economy? Get Real!Old Economy: The measure of a healthy economy is a growing GDP.
Get Real: A healthy economy meets real needs within ecological limits.Old Economy: All you need is money.
Get Real: You can't eat money. What we need is healthy families, communities, and ecosystems.Old Economy: Booms and busts are inevitable in a modern economy.
Get Real: The boom/bust cycle is a result of letting banks create money.We usually think of money as neutral—it allows buyers and sellers to make deals, and that's good. But it's not neutral when we give private banks the right to create money that we taxpayers have to borrow. It gets worse when banks get entangled in exotic speculation, creating trillions of electronic dollars that inflate financial bubbles. Then—because the paper wealth is disconnected from the real economy—the bubble pops, and finances crash. The banks don't know how to untangle the mess, and they stop making loans. Even when things are going well, there's this little problem about interest-based money—it concentrates more and more wealth in the hands of those lending it at the expense of your average homebuyer, credit card holder, or tuition-paying college student. In the new economy, there are better ways to get money circulating.
Old Economy: Wall Street is the engine that powers our economy.
Get Real: Most real economic activity is local.Old Economy: Corporate banks are too big to fail. We need them to keep our economy going.
Get Real: Small, responsible banks and credit unions build real wealth in our communities.Old Economy: The smart investor insists on high returns.
Get Real: Slow community investments pay back in dollars and quality of life.Finance begins with a simple idea—individuals or groups sell shares to investors or borrow money from banks, and use the funds to start businesses, buy land, or build houses, factories, or roads. Investors gain a stake in these—ventures; if these companies are publicly traded, investors can buy and sell shares on stock exchanges. But as the small U.S. stock exchanges of the late 18th century grew into the vast institution that is now Wall Street, the relationship between trading and the real economy of goods and services fell apart. We've witnessed what happens when “owners” of businesses have no accountability for outcomes in the real world. Financiers are rewarded for generating short-term profit, even when the investments turn out to be phony or to cause harm. As mega-finance crumbles, many farsighted individuals are putting their money in enterprises and financial institutions that benefit working Americans and the places they live.
Old Economy: Well-run businesses require a hierarchy of highly paid executives. Get Real: Worker co-ops are efficient and democratic, and workers keep the profits.
Old Economy: The freedom to do ecological damage improves the business climate.
Get Real: If we destroy the environment, there is no business … or climate.Old Economy: Large corporations are efficient, innovative, and create jobs.
Get Real: Locally rooted small- and medium-sized businesses create the jobs and innovations we need.Do you want new jobs in your community? With layoffs and businesses closing, who doesn't? The standard formula is to offer big corporations subsidies and tax breaks. Throw in lax environmental and labor standards, and you may win the new-jobs sweepstakes—until another city offers a better deal. There's another way—build your economy from local assets. Worker co-ops, in particular, are enjoying a resurgence. The Mondragon cooperatives in Spain started up to provide jobs during an economic slump; today, they employ 100,000 worker/owners. In the South Bronx, a new green worker co-op is reselling salvaged building materials. In Cleveland, co-ops will soon be servicing the city's most stable employers—hospitals and colleges. These businesses employ the poor and keep jobs local. Many have a distinctly green tinge. Instead of flying off to distant shareholders, the profits go to the worker/owners who keep them circulating close to home.
Reprinted from YES! Magazine,
“Busted: 9 Economy Myths: Reinflate the Old Economy? Get Real!” from July 2009. YES! Magazine is an award-winning, ad-free, nonprofit publication that supports people's active engagement in building a just and sustainable world and published by The Positive Future's Network.
Yes Magazine address: 284 Madrona Way NE Suite 116, Bainbridge Island WA 98110. Subscriptions: 800-937-4451 Web site: www.YESmagazine.org
HOME - FEATURES - NEWS - FROM THE PUBLISHER
LETTERS - COLUMNS - MUSIC REVIEWS - BOOK REVIEWS
PLANETARY CYCLES - CALENDAR - ABOUT TLC - CONTACT US
CLASSIFIEDS - RESOURCE DIRECTORY
ARCHIVES - SUBSCRIBE - ADVERTISE - SEARCH