The 2008 financial crisis showed the Milton Friedman economic model of a laissez faire, production-oriented, trickledown, austere and financially driven economy to be a paper tiger.
The idea that the economy is the tool of the one percent at the top of the wealth pyramid has led to anger in blue-collar communities in western societies, and ultimately to today’s populist and fascist resurgence, with authoritarian types at helm of the western world.
Unfettered deregulation, far from generating strong economic growth, has led to lower economic growth, greater inequality and social disruption.
The Covid-19 pandemic has been the nail in the coffin for austerity and trickledown. Big government is back. And big government and community cohesion alone will take world to the place of sustainable economic and social prosperity.
A better future for mankind after this pandemic is one of deeper cooperation between nations, especially in combatting the environmental and ecological challenges facing humanity.
The swift and vast spread of the Covid-19 pandemic was the direct result of a world that saw various governments sitting in silos and foxholes unable to cooperate. The age of the statesman had given way to the era of the populist and authoritarian seeking national glory.
Statesmanship and thoughtful and painstaking global policy are great for safety and security, and especially good for economics.
On the other hand, the world over the past four years — with United States President Donald Trump, Brexit and the creed of the populist strongman — has driven uncertainty and instability.
President Elect Joe Biden promises a return to balanced statesmanship and thoughtful leadership, rejoining the Paris climate agreement and the World Health Organization.
The world also may need to restructure global debt, which is becoming unsustainable. Debt restructuring will offer confidence to investors and consumers and will lead to more sustainable economic growth.
The world remains deep in recession. And it will take strong economic statesmanship to introduce and drive the policies that will allow a return to economic growth.
But that will further mean international cooperation and understanding that only statesmanship provides.
Economist Joseph Stiglitz has stated that with multiple vaccines in sight, a bridge is now needed from the pandemic to the post-pandemic economy.
There will be no V-shaped recovery. Businesses have gone bankrupt. Home budgets have been destroyed. The pandemic has increased inequality and taken a massive toll on the bottom of the wealth pyramid.
It will take strong and technocratic type leadership to rescue the world economy.
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