Beyond the Bailout: Agenda for a New Economy

By David Korten | Website

Reprinted from  "Sustainable Happiness," the Winter 2009 YES! Magazine
284 Madrona Way NE Ste 116, Bainbridge Island, WA 98110.  Subscriptions: 800/937-4451 

David is author of the international bestseller When Corporations Rule the World and The Great Turning: From Empire to Earth Community. He is co-founder and board chair of YES! Magazine, and a board member of the Business Alliance for Local Living Economies.

The financial crisis has put to rest the myths
that our economic institutions are sound and markets work best when
deregulated. Our economic institutions have failed, not only
financially, but also socially and environmentally. This, combined with
the election of a new president with a mandate for change, creates an
opportune moment to rethink and redesign.

Obama has promised to grow the economy from the bottom up. That would
be a substantial improvement over growing the top at the expense of the
bottom. The real need, however, is a bottom-up transformation of our
economic values and institutions to align with the imperatives and
opportunities of the 21st century. It involves a five-part agenda:
clean up Wall Street, play by market rules, self-finance the real
economy, measure what we really want, and convert to debt-free money.

recent market meltdown and the resulting bailout commitments of more
than a trillion dollars have focused the nation’s attention on the
devastating consequences of Wall Street deregulation. This is but the
tip of the iceberg of a failed economy in serious need of basic

Our economy is wildly out of balance
with human needs and the natural environment. The result is disaster
for both. Wages are falling in the face of soaring food and energy
prices. Consumer debt and housing foreclosures are setting historic
records. The middle class is shrinking. The unconscionable and growing
worldwide gap between rich and poor with its related social alienation
is producing social collapse, which in turn produces crime, terrorism,
and genocide.

At the same time, excessive
consumption is pushing Earth’s ecosystem into collapse. Scientists are
in almost universal agreement that human activity bears substantial
responsibility for climate change and the related increase in droughts,
floods, and wildfires.

We face a monumental
economic challenge that goes far beyond anything being discussed in the
U.S. Congress. The hardships imposed by temporarily frozen credit
markets pale by comparison.

would be a good time to start evaluating economic performance against
indicators of what we really want—healthy children, families,
communities, and natural systems.

Wall Street bailout package that Congress passed in its moment of panic
did nothing to address the structural cause of the credit freeze, let
alone the structural cause of the economy’s even more serious
environmental and social failures. On the positive side, the financial
crisis has put to rest the myths that our economic institutions are
sound and that markets work best when deregulated. It creates an
opportune moment for deep change.

On Tuesday, we’ll outline the first of some essential steps toward a system redesign that can put us
on the path to a just and sustainable economy that works for all.