Save The Economies!

In today's paper.

Global Effort to Save The Economies
Sheel Mollungfin, senior economic correspondent
Newfall Times
March 3, 2008

Economies across the globe are in steep decline, and without immediate action may disappear altogether, say economists gathered in New York for a world banking conference. "Unless we intervene soon, we might as well call ourselves economic historians," said Loef Treeweld, of the World Fiduciary Institute. "We will only see them in museums."
In Third World countries, economies are disappearing at an alarming rate, and this has begun to spread to developing lands. Economists fear that it threatens the developed world. Treeweld warns, "Western lands may be the last sanctuary of the economy. It may be their last stand. We need to do something now."
A momentum builds when economies start disappearing, a phenomenon economists call "fiscal cascade." When one economy disappears, it removes a source of raw materials, wealth, goods, and services for other economies. This starves the other economies, restricting their resources, taxing their local environments beyond their ability to sustain. The neighboring economies weaken without these resources, and without alternatives, they are pushed toward stagnation, recession, depression, and death. This, in turn, pressures their neighboring economies to collapse. "It is a cascade," says Treeweld. "It is like the shock wave of an atomic blast, taking down buildings in ever-widening concentric rings."
For economic populations to thrive there must be sufficient numbers to maintain the viability of the populations. "You cannot sustain vigorous economies without sheer numbers. Drop them below a threshold, and the economies cannot interact, they become isolated, and there are no spin-offs, no further generations, no new-and-exciting products. They start to tumble like dominoes. In the end, the economy resorts to auto-cannibalization. You get salesmen selling to salesmen. Grocers eating their own grocery. Auto mechanics slashing brake lines, doctors infecting patients. It gets ugly. You don't want to watch."
What has happened in the Third World may portend what happens in developed lands. Treeweld continues, "The economy in those regions gobbled up all of its resources. The land is stripped bare, and all you have left are empty markets and mobs of hungry people raiding empty stalls. Soon they will be raiding each other. 'I will take your watch if you take my hat.' That sort of thing. This is our future."
Inflation, says Treeweld, is often misinterpreted. "We usually think in terms of supply and demand, but that is only true in a whole environment. But in a degraded, disassembled, or decomposed environment, such as we have designed in modern times, supply and demand are overwhelmed by resource scarcity. This leads to inflationary pressures. I liken it to the swelling of limbs you see in congestive heart failure. This doesn't mean that the person is increasing in stature, he is not becoming larger than life, no, it means his heart is dying."
The size of economies today has increased, placing greater pressure on raw materials and finished goods. Helmik Dred, of the Brainbinge Fund, observes, "We used to have these little, village-based economies where a collapse wouldn't be noted outside of the local barbershop or mercantile. Villages over the range or across the river carried along as if nothing was amiss. 'I hear the village over the hill burned down,' they would say, and shuffle another deck of cards. Today, the economies are so large, so integrated, and so voracious that feeding them the resources necessary to keep them alive is daunting. Our grandparents had no idea that their grandchildren would be shoveling billions of their quaint little inventions - the locomotive, the horseless carriage, the moving picture show, the flying machine, the television set - into the mouth of an insatiable colossus, our modern economy. When we run out of those, we start shoveling our children into its mouth."
And then there is the need for corridors. Dred states, "The modern economy is so large and singular within a given land mass, that it has far fewer economies with which to interact than in the past. This requires large-scale corridors over which the economy can traverse and contact others of its kind. Sadly, many of these avenues are blocked by fears, superstitions, prejudices, greed, deception, and self-interest. This is a quandary; while preventing economic interrelationships, they are in fact, the very conditions upon which the individual economy thrives. We are looking into that right now."
Solutions
And that they are. Economists are looking for answers wherever they can be found. Some are probing the underpinnings of the modern economy for an answer. Amler Schintz, chief strategist for Tricycle Investment Group looks to the 18th century. "Adam Smith, in his work, The Wealth of Nations, gave us the guiding principle," he contends. "He spoke of the 'invisible hand' of self-interest, the profit motive, if you will, that unintentionally produces a collective good for society. This was sheer genius. Like the man who builds a tower for his grain that happens to give shade to the homeless people. So what if they are homeless because he took over their land? Or they can't afford the grain? They still benefit, don't they? It's like burning down a village to save it. We can all sleep with a good conscience, knowing the homeless people are sleeping in the shadow of what used to be their homes." He closes his eyes. "We need to return to this simple stratagem."
Schintz continues, "But we need to invoke the invisible hand with more vigor than promoting self-interest. We need to create consumer confidence. Confidence in what? Not in resources, corridors, interactions. No, we must recreate the belief in the economy, the belief that the economy continues to thrive for the economy to continue to thrive."
He shifts his weight and adjusts his suspenders. "Wealth is largely the conviction of wealth - and it is relative at that. Picture the wealthy man in Borneo and compare him to the wealthy man in Lichtenstein. There is no comparison, yet each parts crowds of patrons at the best restaurant in town with a flip of his wrist. The man in Borneo imagines himself wealthy although he possesses a few stone wheels and seashells. We need to convince people that they are prosperous, regardless of their prosperity. Children are enamored with plastic jewelry. People are the same; lavish them with real wealth or imitation wealth, whatever works. The death of the economy will go unnoticed."
He pauses to light up a cigar. "Besides, the only thing that works in a depleted environment is something akin to catch-and-release fishing; you don't consume anything, just pretend you are, then step aside, and let the next fellow do the same. And, if you are next fellow in line and you are under the influence of the invisible hand, why, you just take that fish right out of the water and fry it up! 'For humanity!' you say. Well done! You have done your civic duty, you have produced the collective good. The economy will live to see another day."