Whilst those who have cried “growth fetish” believe we’re consuming too much, and we will have to adapt to a more stringent lifestyle, this is to confuse two quite separate issues:
1. More often than not, rape, pillage and despoliation of the environment has been largely conducted by the untouchables; the privileged 1%.
2. Many of the dispossessed, the poor, and increasingly now the middle class, have had their reasonable expectations for a half-decent lifestyle frustrated. They have inadequate wherewithal and are shackled with too much debt.
Therefore, the financial world slowly grinds to a halt as a consequence of ineffective demand.
We should have learned by now that economies work when people are able satisfy their reasonable desires, and fail when self-seeking parasites deny this of them. Warren Buffett has appreciated the point for some time.
If the current slowdown provides satisfaction and Schadenfreude to idiots who want to complain about all economic growth, it should not, because history tells us that several years into these times, we can expect either bloody revolution or a ‘good’ war to ‘remedy’ such yawning social divides.
So, how do we resurrect effective demand then, Angela Merkel, Nicolas Sarkozy? …… Zzzzt! No, I’m sorry you’re both wrong.
What you have to do is this: increase production rapidly by abolishing taxes on labour and capital. As these will no longer be stolen from the earnings of labour and capital that flow immediately from production, the confidence of capital to invest and of labour to spend will return overnight.
Look to resource rents–so called ‘super profits’–for your necessary revenue, guys.
Oh! And all that debt?
Get rid of it! Ultimately your people should be more important than the Euro.