Sunday, 27 June 2010

Damned if they do, damned if they don't?

Stephanie Flanders recently posted the following blog - "... In many ways, the argument over the right way to support the global recovery here at the G20 summit in Toronto is the mirror image of the debate at the London Summit last year.

Back then the argument was that governments needed to act together to prevent another Great Depression. Now the worry is that they will hurt the recovery if they withdraw that support all at the same time.

But there is one crucial difference. In April 2009, any student of economic history could tell you which policies would maximise the chance of recovery - or at least minimise the chance of economic catastrophe.

The hard truth about today's situation may be that there is no perfect mix of policies that can guarantee a strong recovery after a financial crisis this severe, and a run-up in sovereign borrowing this large.

Put it another way: we could be damned if governments do cut borrowing rapidly - with the global economy still fragile - but we could also be damned if they don't ..."

I replied by saying ... "Countries need to acknowledge that traditional 'economics' has failed, was far to narrow in scope (and effectively a toxic mixture of Poweromics* and Ignoromics) and is now effectively dead ...

... and a new positive and broader form of 'economics' is now required (e.g. Leanomics - based on 'adding real value', as well as values such as trust, honor, responsibility, respect) if we are going to come 'Out of the Crisis' and realize true prosperity and (sustainable) growth.  

Dr W. Edwards Deming predicted this over 20 years ago, writing two books entitled "Out of the Crisis", and "The New Economics: For Industry, Government, Education".  His foresight was incredible ... and my work (including my own book ' Lean World'), and Leanomics, build upon his profound insight ... and there's a great deal to do if we are to going to not only survive ... but prosper.