The Sustainable Economic Renaissance

By Scott Secrest

The media has focused intently on the gathering gloom around the economy in recent months. And, why not? Many leading indicators are flashing red for recession. Some are even talking of depression and wide spread failure of our financial system. I’ve even heard sentiments coming from proponents of the emerging sustainable economy, that this might be a good thing if something better can rise from its ashes. Is our capitalist system indeed the US headed off a cliff?

A recession is defined as two consecutive quarters of negative economic growth. A depression is defined as a severe and prolonged recession characterized by failing economic productivity, high unemployment and falling prices. Recessions occur with some historic regularity. When they strike, the usual duration is between 6 and 18 months. A depression could last several years – but we’ve only had one in this country’s history, so there’s not a lot of data to average out on this.

There’s a popular bumper sticker these days that reads, “If you’re not panicking, you don’t understand the situation.” Indeed, with the economy, there are some very valid concerns facing us. For starters, the skyrocketing price of oil is a tremendously inflationary force – it’s making everything more expensive, because moving materials and distribution is more expensive. This inflates prices of just about everything.

Then there’s the slow-down in the housing sector. The housing sector is influential beyond just itself because so many other industries benefit from new residential construction: furnishings, appliances, flooring, etc. Near record mortgage defaults and the resulting spectacle of hard working families losing their homes is part of the housing sector melt-down as well.

Then there is the continuing saga of the “sub-prime” mortgage crises. Many large banks and brokerages, that one might have thought would understand how to control their investment risk, have lost billions of dollars on investments in bonds backed by low quality (read “speculative”) mortgages. All this, and we haven’t even gotten to the devaluation of the US dollar, a record war-spending driven federal budget deficit, and the sagging profitability of US companies.

Is there any light at the end of the tunnel, other than the headlamp of an oncoming train?

Right now is a good time to pause, take a step back, breathe… There has never been a period of history in the US that there weren’t potentially serious threats to our security and economic well-being. We have seen presidential assassinations, senseless wars, corruption and scandal at the highest levels, hostile missile installations just off our shores in Cuba, corporate malfeasance of every kind, and horrific terrorist attacks on our soil. At countless junctures, it would have been easy, and would have seemed quite reasonable, to predict our sudden and final demise.

But, in spite of countless abuses and manipulations over the years, the economy in the US has proven itself resilient time and again. Was there ever a crisis without a recovery? But, that was then we say, what about now? Our problems seem intractable, our leaders seem to lack the wisdom or determination to guide us, time is short!

Capitalism – while a bad word in some quarters – is a system that directs resources to problems. Problems are opportunities. Solving problems not only feels good, it earns money. For too long we on the left have denied that the engine of capitalism is a resource that belongs to all of us, not just to the financial elite. The day has come for the progressives, the social minded, the environmentalists to leave the negativism about our system behind, and work within its framework to strengthen our economy and reset the course toward sustainability. And, it’s already happening.

Record investments are being made in renewable and alternative energy sources. Not every technology is good enough to make it. Which ones will be able to deliver on the promise of renewable energy and which ones won’t? The free market will decide that. And, this is as it should be. Any solution imposed on a free enterprise system has failure in its very blueprint.

Why should we play ball with the current system, and not let it crumble to the ground, then build something more enlightened out of the rubble? This may appeal to the idealist in us, but seriously folks, think this through. We have vast a production and distribution structure based on credit and payment systems that permeate our economy and our lives like the thousands of veins in the most advanced living creatures.

While we weren’t watching, our world got big, really big. T here are millions who depend on our current system to finance and distribute goods, food and services that are needed for survival. And guess what? You’re one of them. Collapse of our current economic, financial and credit systems would cripple this vast system and humanitarian disaster would follow. Keeping your money in a mayonnaise jar isn’t going to help either, when there’s nothing to buy.

Until your county can produce everything it needs and deliver it by wagon, you’ve got reason to support the current economic system. Like it or not, we’re all very invested in it.

Fortunately, because of a private sector, grassroots renaissance which is unfolding right under our eyes, the petals of the new version of the old economy are unfolding. The “free” in free enterprises means just that – we are free to see need and opportunity and to act on that vision. We’re free to find a solution, build it into a deliverable product or service and make it available to the public. And, there’s often a profit in this. And why shouldn’t there be?

Among today’s most pressing problems are global warming and the specter of peak oil. The new sustainable economy is responding with record private investment being made in a host of renewable and alternative energy sources. Multiple methods of solar power collection, biomass, switch grass, thermal energy – investments are pursuing each of these and many more.

Organics are selling like never before. Biodegradable products, sweat-shop free apparel, hemp and bamboo fabrics, are all examples of innovative producers meeting newly defined demands. This is the free enterprise system ala the 21st century! While the old-thinkers will be washed away, the capitalism framework must continue to serve us.

The San Luis Obispo Chamber of Commerce has had a Sustainability and Resources Committee up and running for more than a year now. My socially responsible investment office in San Luis has seen brisk business since opening our doors in 2005. We’re directing capital investments to businesses at the forefront of the emerging sustainable economy. And, it’s working.

To the determent of our society, there have been many left out of economic prosperity. The new capitalism needs to embrace them. Worker training and a reining in of the outsourcing craze must be part of the system’s transformation as well. Technology has increased worker productivity in the US dramatically. We need to leverage this advantage so that our domestic workers can compete with lower paid foreign labor.

So, in response to the catchy bumper sticker mentioned above, I believe that panic is the wrong emotion for these times. Optimism and energy to put our shoulder to the emerging sustainable economy is the right path. Look around you, it’s happening. We can all be a part of the sustainable economic renaissance.

Contact Scott to discuss this topic.

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