It is time for a changing of the economic guard

I write this sitting at my beach house in remote Costa Rica.  My neighbour just borrowed my surfboard to go get some exercise and burn off some anxiety.  He is out there right now trying to catch a wave. The ocean has been unusually ferocious this past week but today it is different… calmer.

I made $4,000 CAD last week following the very few hedge fund traders that bet against the system. These people would make the millennials that organized Occupy Wall Street proud.

My assets are stored in resilient banks that I have researched VERY deeply. I have no financial worries for the foreseeable future. I was prepared for this crash, physically, financially, emotionally and most important spiritually. I saw it coming. I have a bit of an outsider perspective on this economic catastrophe we are in (I realize that many humans lost years or their savings and it might sound like I am bragging, please be patient. My intent is more to help people understand how the system really works so that we can transform it together).

The past two weeks have been WILD! We showed up at the Panama / Costa Rica border the day it closed so that we could renew our tourist visas because we decided not to go back to Canada for a while. Costa Rica had stationed a border security person outside the office who was dressed nonchalantly and was friendly. When I asked him in Spanglish “es possiblemente hablo ingles” he broke out a fluent North American accent and said “Yes. How can I help you?” We had a short conversation where we gave me specific information about the special process that day.  I think his name was Victor. I was totally impressed. 

When we got to the Panama border we had to walk past the usual Panamanian border guard wearing army khakis with a semi-automatic weapon around his shoulder. All the Panamanian border security people were wearing masks and gloves. A young woman wearing a HAZMAT suit with a look of kindness in her eyes took our temperatures. Panama screened my fingerprints on the way in and on the way out. They were kind to me when I talked in beginner Spanglish.  I was deeply impressed (in a Central American way) about the expediency of the process. OK so now the Panama government has my fingerprints, Costa Rica probably does not have the technology to know I am back in the country but there is a stamp in my passport allowing me to stay for 90 days. No problem.

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There have been many surreal moments this week. I have experienced almost every emotion possible. Social media has been surreal. I have met some new authentic twitter comrades (I did not know that was possible). I call them the “REAL Economists & Hedge Fund trader” team. They all saw this economic-apocalypse coming. They have been shouting about the potential of a global system failure for years and were all prepared financially and physically for this. 

They are doing their best to educate everyone about why this happened so that it doesn’t happen again. I cried when I witnessed a woman drive up on a motorcycle, navigate the dogs in the house and then deliver fresh fruit and vegetables to the kids that go to the local school.  The locals were supposed to pick up food in person the next day but the food came early so they hand delivered it.  Getting things done at the exact agreed time in Central America is rare, so getting something done early appeared a miracle to me. 

The other part of the story is that I was VERY ANGRY!! I was angry when I watched national politicians of all stripes and colours attempt to merge “short term economic relief” packages with draconian long-term measures that centralized more power to the systems that allowed this collapse to be created in the first place. I had to turn on my new favourite song Gaslighter, pour myself a few drams of whiskey, blast my portable speaker as loud as it could go and dance in my office by myself for hours. 

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From an Economics perspective if there is one thing that needs to be said right now it is this: 

Macroeconomics is broken and extremely dangerous. It needs to be reinvented. We need to add ecosystem and human health into the models for a start.

If I was running the world right now I would issue a 90 mandatory day quarantine to all the mainstream economists and central bankers. I would ask them to read  Confessions [1] of a recovering economist and send them to a re-training facility to teach them how to be part of the productive economy. 

The big mistake in their models is the omission of 5 variables. They call them externalities in Econ 101 and they are never referred to again:

1. The role credit creation plays in creating asset bubbles
2. The relationship between money and the political system (especially in the USA)
3. The health of the human population (How do you like that humans?  You apparently don’t matter)
4. The health of the ecosystem
5. Opaque (many would call if nefarious) global economic governance system

A week ago, I was very angry. I was debating getting on twitter with one final multi-part tweet and giving up on the world but I didn’t hit the send button. I debated switching to Reddit to see if I could find more comrades and solutions.  My millennial advisory board said I shouldn’t bother because I would be censored. What does that say about the world?  What this says to me is that innovative ideas about regenerating local economies are not welcome.  Ideas like this are routinely banned like some kind of scene from George Orwell’s famous “fiction novel” 1984.

So now what do we do then?

1. Let the temporary economic relief measures flow. Don’t worry about how much it costs just get this disease in the rear-view mirror. Seems the world has a pretty good handle on that now. Yeah! Go Team Human!
2. Be extremely vigilant about any long-term solutions proposed right now because they are all being created with a neoliberal perspective which has a long-standing pattern of increased centralization, increased control and reduced financial wellness for the 99%.
3. Get the renegade economists and hedge fund traders that predicted this together in the same room and get them to hammer out a solution template on how to replace the central banks.  Then get the experts in each country to customize it for their culture.  This is not a one size fits all thing.  Countries are different.  Cultures are different. The solutions need to fit together at some point to allow financial transactions to flow between countries but they absolutely do not need to be the same. The solution in Ethiopia is going to look very different than the solution in Canada.  Here are a few names of compassionate credentialed economists and banking experts for a start: Richard Werner, Steve Keen, Stephanie Kelton, Kate Raworth and Jim Stanford.  There are many more but we can start from here and they will know who else needs to be involved.  Many of them are already doing this work but are doing it without getting paid.  The rest of us can wait until a healthier economic model can be agreed to.  Let’s pay them a professor salary and make them citizen economists.  Their job is to:
4. create a transparent economic model/prototype that enriches local economies and ecosystems
5. make the data and decision-making structure transparent. 

Humans, we are at a crossroads. We are all in collective trauma. As Elizabeth Kubler Ross described there are stages to recovery. Our entire planet is experiencing PTSD at once. This IS NOT THE TIME TO MOVE FAST and trust “the plan”, a guru, a prophecy, a book written thousands of years ago, or anything that has been done before. This is new. Our collective ability to make thoughtful long-term decisions will be compromised for a while.
 

This is what I see happening in the world. Generation Zs [2] are shaving their heads, looking for guidance from their parents and their parents don’t have any.  The boomers and traditionalists are checking their bank accounts and uncorking one of the good bottles of wine out the cellar and chugging it.  Small businesses at the heart of the productive economy are deciding if they will ever be able to afford to open again. Governments are throwing money at huge corporations that just bought back shares. This opaque global governance system we have is doing what people with narcissistic personality disorder [3] do… taking advantage of the situation and pressing for more centralization with a nice sounding utopian story and a digital currency that will track your every move permanently. DON’T FALL FOR IT!!

We are all in this together. Let’s take a few weeks and think this thing through. There is a more compassionate, ecosystem regenerating, human-centric economic model screaming to be born right now.  Humans we need to collectively birth this baby… all of us… as a team.  We are all in collective labour right now. This baby is coming and we can’t stop it.  We are going to have to parent this thing and be responsible for what we create.  We will need to keep improving it, and monitor the transparency and effectiveness of it. We need to start creating measures for the important attributes of a healthy human society. Put the words “GDP and growth” on hold for a while until we find and perfect more compassionate metrics.   

The central bankers, the field of Macroeconomics and our economic governance system have failed us. 

It is time for a changing of the guard.

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The views and opinions expressed in this article are those of the author. 

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[1] http://www.paecon.net/PAEReview/issue21/Stanford21.htm

[2] https://www.thoughtco.com/names-of-generations-1435472

[3] https://www.mayoclinic.org/diseases-conditions/narcissistic-personality-disorder/symptoms-causes/syc-20366662