"System change is now inevitable. Either because we do something about it, or because we will be hit by climate change. '...

"We need to develop economic models that are fit for purpose. The current economic frameworks, the ones that dominate our governments, these frameworks... the current economic frameworks, the neoclassical, the market frameworks, can deal with small changes. It can tell you the difference, if a sock company puts up the price of socks, what the demand for socks will be. It cannot tell you about the sorts of system level changes we are talking about here. We would not use an understanding of laminar flow in fluid dynamics to understand turbulent flow. So why is it we are using marginal economics, small incremental change economics, to understand system level changes?"

Tuesday, October 28, 2008

What's Good for America

It used to be said that what's good for General Motors is good for America, but in those days nobody expected it would come to this: General Motors Acceptance Corporation (GMAC), the people you had your car loan with the last time you bought a GM car (back before that string of Volvos and Toyotas, remember?) is trying to get itself declared a bank so it can get cut in on Mr Bernanke's trillion dollar bank bailout.

This is a silly way to save GM and its jobs. Remember we have two crises on our hands, both caused by economic excesses, operating on different time scales; the one financial and the other environmental.

I've been despairing of making lemonade out of these two lemons, but my good friend Howie Richey has pointed a way out of this thicket. What we should be doing is to tell GM they can't be a bank, but we'll give them a $10 bn contract to develop carbon neutral transportation, please and thanks.

Then maybe what's good for America will be good for General Motors, for a change.

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