With U.S. politicians pushing their economy to the brink nearly two weeks ago, I found a niggling question in the back of my mind.
Where are the car companies?
Wasn’t it just a few years ago that the Big Three North American automakers were on government doorsteps asking for public money to prop up their failing operations? Didn’t they get that help? And didn’t it enable them to rebound into rosier economic security, despite the continuing economic slump (sure, the recession might have officially ended, but the hangover continues to linger)?
So now the government that saved the auto industry’s day is in trouble, and where are the carmakers?
Sure, the amounts involved are staggeringly different. The astronomical amounts involved in both moves are hard to fathom.
The U.S. increased its debt limit by $2.1 trillion at the eleventh hour Aug. 1 in order to avoid going into default, and effectively economic collapse. (That move will be balanced by $2.4 trillion in cuts to federal spending.)
In December 2008, the U.S. government gave almost $25 billion to the car companies out of a $700 billion bailout fund. A pittance, really, compared to the U.S. government’s debt increase. So any financial help the companies might have offered would be symbolic only, but symbolism is at least better than nothing.
What’s perhaps more difficult to stomach is that the dithering by the staunchly partisan U.S. House of Representatives, which delayed the decision to the last minute, might yet bring about another full-blown recession and economic collapse. Witness the market volatility (some might call them meltdowns, depending on which markets they’re invested in) of the past two weeks.
Experts are saying not to panic and this situation is far different from 2008 (umm, I think we’ve heard that before), but it’s unclear yet whether the global economy will pull through.
Admittedly, I’m no student of economics, but I’d argue we’ve no one to blame but ourselves – we’re blatant capitalists, consumed by our own consumerism. We must buy, buy and buy more to keep the economy growing.
More than that, our system’s stability isn’t defined by stability at all, but by growth.
Businesses must continue to grow and grow and grow more to be deemed successful. Few business owners (none, in the corporate world) are satisfied with stable revenue figures. Unless the graph shows a steady increasing line off to the right, things are in need of adjustments.
Make $100,000 net profit one year and only $75,000 the next and that’s deemed a $25,000 loss. I can see the logic behind that thinking, I just think it’s fatally flawed.
To my limited economic understanding, that’s unsustainable – a system set up to fail. And perhaps we’re living through that failure right now.
Nothing can expand forever. Yet that’s what our economy relies on to continue providing jobs and government revenue and corporate profits.
And the need for ever-increasing growth in profits breeds the kind of greed and poor economic policy that brought about our 2008 collapse.
The planet is perhaps our best teacher on this subject. Mother Nature offers countless simple lessons on sustainable growth.
Plants and animals and pretty much every natural ecosystem offer clear evidence.
Yet we’ve been failing to heed nature’s lessons and warnings, perhaps since the dawn of man.
Perpetual growth eventually results in failure, explosion, imposion.
Despite all the recent shakeups in our planet’s various natural systems, mankind’s commitment to a doomed system means it will implode long before our world.
editor@nanaimobulletin.com