Soros: Replace the Motor, Restart the Machine

The current crisis isn’t just a financial one. It’s not only the modern global economy, but the ideologies that underpin it – laissez-faire markets, high consumer debt, deregulation, small government – that have just imploded.

Any recovery, then, seems like it would require a major rethink, rather than just a quick bailout followed by business as usual.

Enter prophet, evil genius, and billionaire George Soros, who has been warning of this current crisis for months, and now has some solutions (care of NY Times blogs):

“F]or the last 25 years the world economy, the motor of the world economy that has been driving it was consumption by the American consumer who has been spending more than he has been saving, all right? Than he’s been producing. So that motor is now switched off. It’s finished. It’s run out of — can’t continue. You need a new motor. And we have a big problem. Global warming. It requires big investment. And that could be the motor of the world economy in the years to come.”

There are two ways to look at this crisis in relation to environmental issues. One is that environmentalism will now be treated as an ideological luxury, and the recession will make us selfish, short term pragmatists, or as Ryanair boss Michael O’Leary has said, a downturn would diminsh the strength of “environmental bullshit among the chattering classes“. The second is Soros’s (and Obama’s) message that the Green Economy can be a page we turn – encouraging optimism, hope, and investment in a broken economy by replacing its core ideas of pure consumption with a new driving philosophy of sustainable, intelligent growth. That is, while we may have managed to stop the machine completely exploding for now, in the medium term it remains unsalvagable in its current form. We need to replace the motor. Then restart the machine.

Posted by Daniel Stacey in Hot Money | October 15, 2008 2:46PM |