Comments on: Davos needs to address uncertainty Sat, 21 Jun 2014 15:30:06 +0000 hourly 1 By: Marvinlee Sat, 11 Feb 2012 22:04:58 +0000 Quite possibly, consumers cannot afford to pay for the “adequate level of demand,” deemed necessary to generate a vibrant economy. A more realistic view is that the world has limited per-capita growth potential, rising population, diminishing real resources, and considerable population aging. Consumers would do well to save more, cut back spending, and anticipate a nation of diminished personal wealth. With all that, citizens will be among the wealthiest in human history, with levels of comfort and health undreamed of by the richest rulers of centuries past.

By: DrPatil Wed, 01 Feb 2012 18:27:15 +0000 With all due respect, Mr. Summers is wrong. He and his financial economist friends need to read the brillinant exposition of uncertainty and risk–not academic analyses of it–by the former and late University of Chicago economics department head for some thirty years: RUP6.html#Pt.III,Ch.VII

The alpha-males of finance have so far managed to use Regulatory Capture, a concept for which Prof. Knight’s student George Stigler earned a Nobel Prize, to “manufacture” certainty that they can then use to their advantage and as a condition for supporting healthy economic growth. Game over.

By: PeterMelzer Thu, 26 Jan 2012 14:50:27 +0000 How can confidence in our economic future thrive in the face of the colossal failures in risk evaluation that precipitated the financial crisis of 2008?

The recent years have starkly demonstrated that decision making in human organizations superseded the human mind’s inherent penchant for prudence with devastating consequences. The responsibility does not rest only with government. Before confidence in the economy can be restored globally, vital financial institutions also of the private sector need to devise improved tools for realistic risk assessment. Perhaps a sharp look at nature may help. Much can be learned from the simple behaviors of a little toad.

Read more here: 2/professor-ewerts-toad.html

By: Mott Wed, 25 Jan 2012 15:40:27 +0000 This article is a bit disgusting in the shameless call on the government to help on demand creation on one side while asking for it to back off on regulations (for ethical compliance and other) on the other side.

This is what analytics and growth addiction craves for, once it gets used to the recent quick gains at the cost of local systems and their competitiveness.

By: tcolgan001 Tue, 24 Jan 2012 20:45:59 +0000 Summers continually regurgitates the traditional economic viewpoint that growth is the primary goal. Rather that taking the current economic crisis as an opportunity to re-orient our focus to enhancing the common wealth he opts to continue down the path of squeezing the last bit of profit out of an increasingly dysfunctional system. When our measure of success is the number of Steve Jobses that are produced we neglect the truth in the statement:

“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” FDR

By: stevensalmony Tue, 24 Jan 2012 11:04:41 +0000 Humankind is presented with an incredible and unprecedented situation. We are spectacularly successful at doing something potentially ruinous of all we claim to be protecting and preserving by ever increasing natural resources exploitation and continually increasing food production. Stupidly we hold fast to a wicked delusion that, if we do NOT do these things, a catastrophe will follow. This upside down, delusional thinking is leading us to precipitate a disaster of some unimaginable sort because the continuous exploitation of limited resources, including continually increasing food production to feed a growing population, is precisely what is actually causing humanity to careen toward a colossal global ecological wreckage.

By: ARJTurgot2 Mon, 23 Jan 2012 21:11:52 +0000 Meanwhile, over on planet Reuters Mohamed El-Erian is coming closer to the truth when he says:

“In either case, these key players do not want to give up control of their narratives, and they certainly do not wish to delegate any meaningful part of their personal agenda to Davos…” n/2012/01/17/davos-at-a-distance/

For some reason I think El-Erain is all around a better Economic, Financial, and Political analyst than Larry Summers. Can’t quite put my finger on why…

By: Nullcorp Mon, 23 Jan 2012 19:04:40 +0000 On the contrary, I disagree that “Government has no higher responsibility than insuring that economies have an adequate level of demand. Without growing demand, there is no prospect of sustained growth, let alone significant reduction in joblessness.”

I think government’s highest responsibility is to ensure the health and safety of its citizens. Our health and safety is not necessarily linked to demand or growth, and in fact, our health and safety often suffer as a result of unchecked growth.

The concept of sustained growth is a toxic, cancerous concept. The goal of a tumor is to grow without limitation, using up all available resources in the pursuit of just one thing: unchecked growth. In doing so, the tumor eventually kills its host. Contrast that tumor with a healthy cell, which maintains a process of homeostasis. The human body undergoes a period of rapid growth, but after adolescence there is a plateau. Following that, there is a decline in which the body slows down and eventually dies. Then, a new generation has its chance.

The very phrase “sustained growth” is a contradiction in terms, because growth can only occur with adequate natural resources, and our natural resources – though extremely robust and surprisingly resilent – cannot support infinite, unchecked growth. Imagine if humans continued to grow until all available resources were consumed. Eventually the situation would become untenable. Giants battling for diminishing returns increasingly scarce resources. And that’s exactly what we see today on the world stage.

No, the idea of “sustained growth” is obsolete. It’s 20th century capitalism, and anyone who supports the idea – a proven failure, evident in our currently broken system – is still thinking inside the box. The mindless and irrational drive towards “sustained growth” is _the_ reason for the current state of things. It’s wrecked formerly stable economies, changed the climate, and made much of the natural world unfit for habitation or resource extraction. Growth will not fix anything. It just pushes catastrophe further into the future. The natural world can only give so much and it’s clear that we’re already stepping past those limitations and turning into a tumor that is quite obviously destroying its host.

The old Einstein quote comes to mind: “We can’t solve problems by using the same kind of thinking we used when we created them.” The big minds of Mr Summers’ generation created the problem and, since it seems that their thinking is unlikely to change, I’m skeptical that they will be able to find solutions.

By: Gordon2352 Mon, 23 Jan 2012 18:05:20 +0000 I agree completely that “Government has no higher responsibility than insuring that economies have an adequate level of demand. Without growing demand, there is no prospect of sustained growth, let alone significant reduction in joblessness. And without growth and reduced unemployment, there is no chance of engineering reductions in government debt-to-income ratios.”

Having said that, I wonder if you could explain in a follow-up article why the US government has vigorously pursued legislative and tax policies that have handsomely rewarded investment in countries other than the US, which has undeniably resulted in “job outsourcing” on a massive scale (especially of our vital manufacturing industries) for the past 30+ years, such that the middle class US consumer demand has essentially disappeared as a factor in our economy?

It is a given that without immediate and meaningful job growth (i.e. manufacturing jobs, which bring in real revenue) being restored to the US once again, there can be no recovery of any kind.

What do you think the US government should do at this moment — in terms of trade legislation and tax policies, specifically — to reverse this trend that has devastated our economy?