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Ecological Roots of the Financial Crisis

Some say it’s greed. Some say it’s stupidity. Others blame it on weak regulators.

My view is the root of this dilemma has nothing to do with these.

Its cause is a faulty worldview. A premise rooted in 19th and 20th century thinking that our macroeconomy exists without limits.

This crisis exposes the rotten core of traditional U.S. macroeconomic theory-that GNP can grow world without end disconnected from biophysical limits. This “growth economy” now has tenacles that reaches literally into every nook and cranny of our lives in 2008. We have a word for anything that grows without stopping, grows without limits, it’s called CANCER. It’s tenacles are wrapped around us to the point where it is now eating its host—human culture and all life forms we live with on this planet.

The Growth Economy is addicted to ever increasing energy throughput from terrestrial sources that are one-time gifts from our geologic past in the form of hydrocarbons and high energy bonds of a few rare elements. Our abstract macroeconomic models may be disconnected from the second law of thermodyamics (entropy) but Main Street and Wall Street are not.

There is an alternative. It is called a steady-state economy, or sustainable economy. In fact, we already have such an economy, and it is the one that really exists for each of us on a day to day and month to month basis, and it’s called our “microeconomy”. It is well understood that this economy is ecological—it is connected to the real world around us via energy inputs and outputs. This commentary is part of a cry that has sprung from the mouths of many others throughout this planet in the last decade. It is an apolitcal cry for rational thinking about the real fundamental roots of what is causing this moment.

This moment, right now, is THE opportunity for current and future generations to alter our worldview—to align physics and economics. This moment is the time to align the fact of interdependence with our most basic models of economic thought and theory.

The Growth Machine is eating us all alive. I do not know what the answers are, but I believe there are some things to not do.  Treatment of symptoms will not help. Do not provide nutrients to the cancer. Do not feed the machine.

- Michael Collins

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2 Responses to “Ecological Roots of the Financial Crisis”

  1. Stacey Derbinshire Says:

    I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.

  2. Joe Says:

    Mike,

    I’ve just read your blog regarding the latest “crisis”.

    May I say that you are spot on.

    Further, I would urge you and any reading this that we have to get over partisanship. Republicans and democrats pick sides on a few hot button issues and keep the masses (you and I) divided and fighting amongst ourselves.

    We must wise up and stop excusing bad behavior because they are “our people” or they support “my thing”.

    You are not going to like what I’m about to say, but from NAFTA to the current snafu, the blame for this MUST be layed directly at the feet of Bill Clinton’s regime, because in caucus at the time, the price for getting home loans into the hands of people that shouldn’t have been given loans (thanks Barney Frank) was the relaxation of previously existing laws that had up until this point prevented the street’s latest ponzi scheme from getting started in the first place.

    Meanwhile, the Bush regime who did nothing to prevent this from gaining momentum, has put the proverbial fox in charge of the hen house. And with a wink and a nod, the friends of Bush will be smiling all the way to the bank.

    Further, the complicit media is trying to cover up the WHYs of this, that I bring up to you now, and are concentrating on other issues, such as pigs, lipstick, and the coming m”O”ssiah.

    The bottom line is this, Democrats AND Republicans got something out of this deal. They worked hand in hand back then in a “bipartisan” way.

    Now we and OUR children are going to pay the price.

    And the current administration?

    Well, he’s tuning up his fiddle, as the fires begin.

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