The Trillion Dollar Question - Two bets

What is the way out of the recession? This is the trillion dollar question these days. If someone could credible answer this question and had a money-back guarantee, the G-20 (which meet later this month) may even put their remaining funds together. This would be money well spent.

But there is noone who has the answer. And so the trillion dollars are spent by governments betting in the worldwide lottery. Some put their money into nationalising banks, others in betting on automotive and Japan is just handing out money for free. Some of these numbers may win. But it looks like the jackpot will continue to build up.

I am in no position to bet government billions. But if I had I would be torn between two bets: system change or Re-bubbling.

Bet 1: We are experiencing a total system failure. This is not just a banking crisis but a crisis of our whole economic system which is based on permanent growth and consumption. This system encouraged extreme risk taking, greed and decoupled the real from the virtual economy. In the last years we saw that a substantial part of our growth was based on invented values, or on nothing. Quite clever actually - making billions out of nothing. For many it’s now back to its original value-nothing.
This could all be a normal recession if it were not for the fact that it hits almost all sectors and all countries. We have a system failure. Can we just rebuild the same defaulted system? Or should we think again and come up with a new system? This is not about going back to socialism. This is about thinking new. Let’s have a competition for a new economic system which can be retrofitted to what we have at the moment. Or we wait a bit longer and we may have to go for a totally new model.

Bet 2: System change is hard, especially globally. It will probably not happen. Therefore, my second bet (and second best option) is to revitalise the current economic system by create a new bubble which creates growth, prosperity, jobs. But this time let’s at least create a bubble which makes sense, let’s create a green bubble. Governemnts have started putting stimulus money into green investment, on average 10-15%. This is good but not enough to create a green bubble. Let’s study the previous internet, housing and banking bubbles and transfer that knowledge into creating a green bubble. And when the green bubble deflates, let’s plan the next useful bubble already.

Disclaimer: Before taking this advice please consult your common sense. There is no money-back guaranty.