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Caught in the Infinite Loop of a Nightmare

Since politics has no strategies of its own to re-stabilize the economic system, it hopes in the self-healing powers of the market after the bank bailout. De-stabilization of the economy is actively promoted.. The whole host of decision-makers were "falsely programmed" in their education. Politics and the media- and economic system are affected.
The Economic- and Financial Crisis
By Gerd Neumann

{This article published in: Welt Online, January 25, 2010 is translated from the German on the Internet,  http://www.welt.de. Gerd Neumann is managing director of the European Office of the Institute for Structural Economics and author of the book "Job's Good News: The End of Illusion is the Beginning of the Future" (Hiobs gute Botschaft: Das Ende der Illusion ist der Anfang der Zukunft).]

The threatening consequences of the financial crisis exceed our powers of imagination. The defensive reactions to Barack Obama's plan to put banks on a leash arise from forces bringing disaster. We are caught in the infinite loop of a nightmare in which the causes of the crisis are continuously reproduced.
Greed, moral degeneracy and criminal energy were undeniably joint causal factors of the crisis. These factors are certainly not sufficient to explain the whole extent of the crisis. The alarm of people can almost be felt and has largely destroyed trust in the capability of action of decision-makers from politics and the economy.
Intuitively society senses something much more dangerous than the crisis lurks in secret. This intuition is right! The vehement reactions to Barack Obama's plan to put the banks on a leash arise from baneful forces in which the real causes of the crisis are continuously reproduced.
Within the political and economic structures, people do not really know how to deal with the crisis. Decision-makers labor on shaking off the symptoms and rely on the principle of hope. They expect the economy will recover so people can "sit out" the crisis. The strategy of sitting out will ultimately lead to catastrophe when one rationally follows the facts and connections.

In principle, all the factors that led to the crisis are well-known and can be simply outlined with several cogent points. The crisis began seemingly harmlessly in 1971 when the gold-backing of the American dollar was abandoned. As a result, a systematic expansion of the money supply led to an enormous expansion of the financial industry.
Parallel to this, economists developed theories and economic models that concentrated almost exclusively on the financial markets. Through the media, the expanding financial markets moved into the center of social perception and other economic events were faded out.
This selective way of looking at things had fatal consequences.
In addition, the decision-makers from politics, academic and financial management have not understood that a dramatic form of de-industrialization began through the separation of the financial markets from the real economy6 and false economic theories on a broad scale in western industrial countries. All this led to an insidious destabilization of the whole economic system with its effects and consequences visible today. Thus the current economic- and financial crisis is only the final phase of a protracted process ignored for over 20 years. Since politics has no strategies of its own to re-stabilize the economic system, it hopes in the self-healing powers of the market after the bank bailout. De-stabilization of the economy is actively promoted.

What lurks in secret and more than justifies the alarm in society has a very different dimension. The crucial factor of the crisis is not currently on the radar of decision-makers. The false economic models of economics are extremely widespread in the academic curriculum.
Across decades, male and female economists provided foundations for economics with their false economic models and ideologies. In this way, they produced a century-error with belated consequences. Formulated coarsely, the hosts of decision-makers were simply "falsely programmed" in their education.
Presumably this "ideological programming" was mainly found in financial management. However politics and the whole media- and economic system are affected. Economists with their false economic models are firmly established in all areas. The consequences are like a nightmare that became reality. Continuing false economic models inevitably leads to the next crisis.
All this reminds us of the feature film "Und taglich grusst das Murmeltier" with the difference that more building blocks for the economic catastrophe are produced again and again in our case. As in the film, we are caught in the infinite loop of a nightmare because the errors that led to the crisis are constantly reproduced.
This infinite loop is the source of all evil. The financial branch already demonstrated this. The "gambling casino" is re-opened. Politics, the economy and the media follow on the heels because they are all stuck in their old behavior patterns. The whole economic system is firmly programmed by the false economic model in the direction of bankruptcies, mass unemployment and collapse of the financial system.

This malformation confronts governments worldwide today with concrete economic problems to which they have no answers. Whether Barack Obama or Angela Merkel, they all face the same challenge and come under increasing pressure. Their political leadership is already put in question since they have no convincing solutions to fighting the economic crisis. However no time remains for protracted discussions or decision-making processes in view of the dynamic of the crisis. How can we break out of the infinite loop of this nightmare?
Nightmares end when the light is switched on. Our nightmare can also be ended this way. In our case, a simple functioning economic model with which society can see itself - without any expert opinions - in what direction the economy develops brings light in the darkness. In its decision-making, society must make itself independent of speculators and economists who have completely failed with their prognoses.
With a functioning economic model, society can orient itself independently and reliably and become capable of acting. The bottom would be knocked out of the malformations and the swindling. In a word, we need an economic model that functions. Mr. Average understands this.

For politics, there is no alternative. The only possibility is opposing a critical mass to the hosts of "falsely programmed" decision-makers who work with false economic models. Without the active support of society, politics has no chance in the struggle against the crisis.
Everything necessary for Mr. Average's economic model exists. One hearkens back to a representative cross-section of economic prognoses that accurately predicted and analyzed the crisis. From the concentrate of answers, a functioning model of the economy can be distilled. A model can be outlined with available economic data and visualized in a simple form so it becomes understandable for normal citizens.
With this economic model, an information campaign can be launched with the goal of offering society orientation and future perspectives. On this basis, further necessary measures for stabilizing the economic system and new forms of industrialization can be developed.
Following a reasonable orientation, making a healthy connection between the real economy and financial management and discovering new possibilities of action will only be possible for the economy in this way.
Such an action is efficient, sustainable, quickly realizable, inexpensive and needs no legislative measures. The project can be realized by private initiatives, foundations, organizations and economic associations, not only by politics.
Hopefully politics will see the seriousness of the situation and the necessity for action as quickly as possible since time works against it.

"The End of Illusion and the Beginning of the Future"
"The Cure is the Sickness" by Jorg Goldberg
"Democracy is a Useful Fiction" by Chris Hedges
"The Quiet Coup" by Simon Johnson
"Ways Out of the Crisis" by Jean-Paul Fitoussi and Joseph Stiglitz

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