The tipping point

1. we must seek to minimise the suffering of the most vulnerable and innocent in our societies and economies;
2. we must gird ourselves to clear from the Augean stables of our economic and financial “system” the mess which has built up over the years since 1969 and, more especially, during the buccaneering years of the new century; and
3. we must be prepared for fundamental reforms in our national economies and the global economy, of at least the magnitude of those we instituted after the Great Depression and World War Two. These reforms call for new attention to such issues as the validity of “Gibson’s Paradox”; the role of credit as distinct from interest rates; a return to relatively stable exchange rates of the pre-1971 period instead of the speculation-prone, trade-distorting, “free-floating” exchange rates we have now; and sufficient regulation of the flow of funds within both the domestic and the global economy to ensure at least an amelioration of the cycle of boom and bust inherent in the present arrangements.

If only because of the intellectual inertia caused by long conditioning, these reforms will be difficult to achieve and they will take time.

However, if we do not adopt them, the consequences not only in economic and financial terms, but especially in political and strategic terms will be grave.

The United States is already well on the way to political and strategic self-destruction as a superpower. It is in the interests of global stability that this decline should be arrested - or at least moderated - as quickly and effectively as practicable.