Sinking the world

When your economic model fails again and your economy is once more on the verge of collapse, what’s the solution? Do the same thing but big it up!

World leaders on Thursday heralded the G20 summit as the day the world “fought back against the recession” as they put on a show of unity that lifted global markets and mapped out a new future for financial regulation. Gordon Brown, UK prime minister, host of the summit, said the meeting marked the emergence of a “new world order”, as he unveiled what leaders claimed was a $1,100bn package of measures to tackle the global downturn, including support for lower income countries and a $250bn plan to boost the international money supply.

There’s a pattern at work here. After the 1987 Asian currency fiasco nearly sunk Wall Street, the Fed managed to inflate the tech equity bubble. When that blew up in 2000, they used the martial response to 9/11 and the housing bubble to reinflate. Now, since their usual national tools have failed, they’re attempting to throw the combined weight of the G20’s resources at the problem, based on the same precisely the same set of assumptions that have repeatedly made the problem worse!

This action doesn’t “save the world”, in fact, it makes it much more likely that what was mostly an American depression from 1929 to 1940 will be repeated on a scope that is an order of magnitude larger. If we’re unfortunate, it will also be on a scale that is an order of magnitude larger as well.

The fundamental problem isn’t a lack of resources, it is a misallocation of resources. Giving GM more money isn’t going to cause more people to want to buy GM cars, it merely postpones the inevitable collapse and increases its economic and social costs. And don’t forget what happened the last time the media announced the world’s salvation… in February 1999.

There is no downside

PZ Myers provides amusement by worrying about the economic crisis harming America’s “intellectual infrastructure”:

One of the challenges facing the country right now in this time of economic crisis is that we’re also about to be confronted by the result of a decade of neglect of the nation’s infrastructure, in particular, the chronic starvation of our universities. It’s an insidious problem, because as administrations have discovered time and again, you can cut an education budget and nothing bad happens, from their perspective.

But where is the evidence that America’s universities are its intellectual infrastructure? It’s a self-serving assumption, and a problematic one when considered in a realistic light. The comments are an absolute gold mine of comedy – to which I have referred before – as the hard scientists begin by beating up on the humanities and the fake sciences until eventually both sides join hands, sing Kumbaya, and reach a general agreement that Womyns’ Studies and Postmodern Philosophy are just as important as Biology and Physics and that every academic discipline should be lavishly funded by the taxpayers.

However, the Pharyngulans are confusing theory with reality here, as they discuss what the liberal arts are theoretically supposed to be as opposed to what they actually are at an American university. This is ironic, as their community is one of the foremost examples of how an American university system does not teach one how to think ; indeed, it does precisely the opposite as one will not find a less thoughtful, more dogmatic individual than the average American academic.

And, as others have noticed, it’s becoming evident that the best and brightest coming out of America’s most elite universities are actively contributing to America’s economic demise. There is arguably a stronger case for shutting down the universities entirely than there is for not reducing their funding; paying to obtain a piece of paper calling itself a university degree is no longer tantamount to obtaining what passes for an education. From politics and business to economics and the liberal arts, the American university system has been a massive failure.

““It is so obvious that something big has failed,” said Angel Cabrera, dean of the Thunderbird School of Global Management in Glendale, Arizona. “We can look the other way, but come on. The chief executive officers of those companies, those are people we used to brag about. We cannot say, ‘Well, it wasn’t our fault’ when there is such a systemic, widespread failure of leadership.”