Capitalism, Socialism and Communism have been pretty tired labels for some time. Our capitalism seems to be buying nothing but socialism today. Today the only investment anyone wanted to make in our capitalist system was the US Government. This would indicate that the global market believed that the most viable institution and the one that would provide the highest return on investment was our Federal Government. Perhaps a vote of confidence for the new CEO, Barrack Obama, but disconcerting that no one viewed any other investments as worthwhile. This surely isn’t Socialism—no one is voting with anything but money: neither a popular revolution nor even government policy is driving this apparent nationalization of the auto and banking industries.
We need new monikers and conceptual frameworks to discuss and understand a system that has more than current supply and demand at work. We need to be able to conceptualize a system that is driven by climate shifts, demographic shifts, technology shifts, social and religious realignment. Without the global flow of money resulting from transnational resource purchases there would not have been a market for the highly leveraged mortgage backed securities and disastrous derivatives. The dimensional flattening that a pure monetary view imposes doesn’t even provide the facility to discuss quality of life issues that Baby Boomer aging and health care concerns generate. The “externalities” of terrorism or carbon driven climate change can’t possibly be evaluated in a system that only accounts for tax revenues, military expenditures and rising costs of resources.
Many of you are far more creative than I – what do we call this new global reality? What models do we bring to bear to set priorities and make tradeoffs on where we put our collective efforts? The complete lack of interbank lending, zero interest on T-Bills and a negative yield curve tell me the one we have is inadequate.