Permission To Trust Each Other And Shop...

"Rousseau wrote about a hypothetical situation in which two hunters must cooperate to kill a deer. If a rabbit hops by one of the hunters, he would probably pursue the rabbit 'without scruple,' said Rousseau. Although the rabbit makes a less satisfying meal, at least it's a guaranteed meal. On the other hand, the deer isn't a guaranteed meal, because neither hunter can be absolutely sure that he can trust the other to help kill it. In the end, though, when one hunter chases a rabbit, collectively both hunters are worse off: while one gets the rabbit, both lose any prospect of getting a deer.

"For families and companies in this economic crisis, the choice isn't between a deer and a rabbit, of course, but between spending and saving. Because we can't trust other people to spend, we do the economic version of chasing the rabbit - we keep our money in our pockets. But this individually cautious behavior worsens the collective economic crisis, and as the crisis gets worse, we're even more afraid and even less willing to trust others to spend."

from Globe and Mail by Thomas Homer-Dixon...

The main reason deflationary cycles are so diabolically
hard for policymakers to stop is that governments
can’t force people to trust each other. Instead, all they
can do is inject spending directly into the economy,
through increased unemployment benefits (because
the jobless spend almost all the money they get) and
infrastructure investment, and hope that by putting a
floor under economic demand, people and companies
will eventually become less fearful and start to spend
again.

Governments need to move fast, because this crisis,
which has taken several forms already, is about to
change form again. In the last few months, we’ve
move from a seizing up of credit markets to the
collapse of economic demand in the mainstream
economy. Soon we could see a string of sovereign
defaults of poor and emerging economies that can’t
meet their debt obligations.
Even worse, hundreds of millions of previously poor
people from Hungary and Turkey to India and China
-- recent arrivals in the global middle class who’ve
benefited from an economic boom fueled by endless
quantities of cheap credit -- are about to see their
standard of living fall of a cliff. Around the world,
Western-style capitalism will be discredited, as it’s
perceived to have wiped out people’s jobs and life
savings. Our global financial crisis could then morph
into a global political crisis, as extremists of all stripes
– neo-Nazis in Eastern Europe, hyper-nationalists
in China, and Hindu fundamentalists in India –
accumulate popular support and power.

So...go save the world today and SHOP!