Magic Mushrooms – rerun

OLD planet Earth has been on a drug induced high and is now going cold turkey; Magic Mushrooms are in short supply! Yet another gathering of the world economic bloodsuckers has just finished.

‘Deadwood Davos’ revealed all; all these clever sods do not have a clue, Stiglitz excepted, who got fired from the World Bank in 1999 for being right! Five days of jawboning, culinary excess and endless media interviews placing bets on ‘how long the recession will last’ ended with the only conclusions being ‘it’s not my fault’ and that the stem cell problem is ‘executive pay’ in the financial world!Pit stop. Where is the planet economy now? Industrial production slumped by over 20%, container transport, air freight and packaging by 30%, commodity prices collapsed and house prices worldwide are in serious decline. Consumers have closed their wallets and are saving (or reducing debt), commercial banks are scared to lend to good commercial customers and investment bankers have gone subterranean. The best is yet to come as the inventory download cash runs out. Nation states have reverted to self-preservation through printing vast amounts of stimulus and bailout money, are building pyramids and supporting failure. And nothing will change as ‘they’ all are doing the same thing – a zero sum, financial MAD (Mutually Assured Destruction) Global alliances will falter and fail, protectionism will mushroom and the ‘no pain, gain’ scenario will play out with a new order emerging.The ‘Global Village’ is going to be strewn with the bodies of multinational organisations (especially the UN, WTO and IMF genre), Davos Dodos, service institutions and iconic companies going belly up. Reminiscent of TV detective series in rural England where the bodies exceeds village populations. A happy scenario especially when two billion people live in poverty and formal job losses are going to exceed 100 million in 2009.However, the Davos lot somehow got it right. A lack of accountability and executive pay (and political benefits?) is indeed the root of the problem plus that ‘pie in the sky’ of sustainable growth. GDP rule, average incomes the barometer of policy, individual net worth measured social status.Thus the economic division of a ‘real economy’ where real people live and the ‘virtual economy’ where money is a traded commodity. Evidence? Stock markets have become daily betting shops where millions are made through clever manipulation. Markets are certainly not the basis of ownership, solid asset addition and dividend creation. The fundamental market system has ‘failed’. Dictum Meun Pactum(my word is my bond), the UK Stock Market motto, is dead.The financial vultures pick the bones clean with the help of their political saviours. Their pay is a function of volume and measurability, not some esoteric skill! As oft said, there is nothing like a good crisis to make change work. The BIG opportunity.Cool matters down to the Namibian level, home. This will affect our economy to some degree; how should we approach matters?Our region, from a low base, has much potential if use of the Magic Mushroom of an election year is moderated, Policy makers, get real. Clean power, trade corridors, BIG (with conditions), Zimbabwe recovery (join CMU?), food production (Green Scheme) and many other areas offer opportunity for all. Policy and actions that target political outcomes will cause security problems. The rest of the world has fewer options than Namibia; they are deep in their excrement.Look regionally, look to all people, help people onto a new economic model. Outside advice, generally, is now proven disastrously wrong. Do it our way.csmith@mweb.com.na

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