Image by r0b0r0b via Flickr
The reaction to the global meltdown has so far consisted of so many variations on a common theme: governments deepening their debt to provide backing for too-big-to-fail stricken banks and central banks inventing new money. The single lyric on the hymn sheet is “save the system, return to growth!”
But it hasn’t been enough to do the trick and everyone knows it. The universal collapse in demand, trade and credit is forcing a new round of consolidation on struggling global corporations. The world economy is hanging on a hardly-functioning financial system while the boom on stock markets is a purely speculative bubble.
Every country is affected, and no government is able to act on its own. The only result of any significance from the G20 in Pittsburgh was the recognition that the unfolding global crisis has outpaced, outgrown and outstripped the 30-year-old political arrangements for managing international economic affairs.