In Hans Christian Anderson’s iconic fairy tale, The Emperor's New Clothes, two swindling weavers promise an Emperor a “new suit” that they tell everyone will be invisible only to those who are unfit for their positions. So, when the Emperor parades before his subjects, the spellbound people laud his beautiful new clothes in fear of being exposed as unsophisticated or stupid. Eventually, it took a child to cry out, "But he isn't wearing anything at all!" before the king’s subjects could muster enough confidence to admit the obvious reality.
Scholars note that the phrase “emperor's new clothes” describes a common situation where "weavers" of official policy insist that the value of their labor be recognized apart from the physical reality of the moment, and has become a standard metaphor for anything that smacks of pretentiousness, pomposity, social hypocrisy, collective denial, or hollow ostentatiousness.
While today's existing global power structure continues to try to conduct business as usual and insist that the economy is in good standing, there is no question that existing systems are unsustainable. The economic value of all of our assets and resources are at stake, and dealing with the symptoms of the problem rather than their root causes, while delaying the consequences and numbing the public to their real effects only exacerbates the inevitable results. Note these sobering facts:
To make matters worse, the United States’ credit rating, described by the Wall Street Journal as "a cornerstone of the global financial world," was shaken this month when S&P downgraded it from AAA to AA. Notably, S&P said the downgrade "reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics."
And it’s no better across the world. Arson, riots and looting are on the increase in Europeas public and private credit spirals into ever-riskier realms. The debt crisis is more advanced in Europe than it is in the U.S. Can Europe be anything but a precursor for theUnited States in this case? Remember,Greece had its first credit downgrade in December of 2009.
Ominously, the same day the financial world was shaken by the U.S. credit downgrade, nakedcapitalism.com officially began its Bank of America Death Watch with with the following reasoning:
It is clear that the Charlotte bank has too much in the way of legal liability that it will not be able to shed and yet-to-be-taken write-downs on balance sheet items (for instance, roughly $125 billion of home equity loans and junior liens on residential real estate as of end of last year) for it not to be at risk of a death spiral.
We meet here today almost exactly three years since the beginning of the most intense phase of the financial crisis and a bit more than two years since the National Bureau of Economic Research’s date for the start of the economic recovery.
Where do we stand?
There have been some positive developments over the past few years, particularly when considered in the light of economic prospects as viewed at the depth of the crisis. Overall, the global economy has seen significant growth, led by the emerging-market economies. In theUnited States, a cyclical recovery, though a modest one by historical standards, is in its ninth quarter. In the financial sphere, theU.S.banking system is generally much healthier now, with banks holding substantially more capital. Credit availability from banks has improved, though it remains tight in categories – such as small business lending – in which the balance sheets of potential borrowers remain impaired. Companies with access to the public bond markets have had no difficulty obtaining credit on favorable terms. Importantly, structural reform is moving forward in the financial sector, with ambitious domestic and international efforts underway to enhance the capital and liquidity of banks, especially the most systematically important banks; to improve risk management and transparency; to strengthen market infrastructure; and to introduce a more systemic, or macro-prudential, approach to financial regulation and supervision.
Perhaps the real truth of The Emperor's New Clothes is not that the child's truth is mercifully free of adult corruption, but that it recognizes the terrifying possibility that whatever words we may use to clothe our fears, the fabric cannot protect us from them. Even Chairman Bernanke seems to acknowledge this sober fact when he concludes in his Fed meeting speech:
To achieve economic and financial stability, U.S. fiscal policy must be placed on a sustainable path that ensures that debt relative to national income is at least stable or, preferably, declining over time. As I have emphasized on previous occasions, without significant policy changes, the finances of the federal government will inevitably spiral out of control, risking severe economic and financial damage.
In a revealing new article, Developing a Sustainable Endgame for the Global Economy, SLDI has identified why this should all have been expected (but wasn’t), and how shifting investments from Wall St. and banking-based assets to the only investments which mitigate the increasing risk of systemic failure of the economy brought on by excessive debt - sustainable global infrastructure – is the best course of action from here. Only by investing in nature-based assets with lasting inherent value such as land, shelter, food, water quality, and other ecosystem restoration services will we mitigate the increasing systemic economic risk and achieve the short- and long-term wealth gains we all strive to achieve.
Back in January 2009, amid all the bad news and demands being placed on the President-elect Obama transition team prior to his inauguration, SLDI offered a reason to hope for the future by formally submitting its offer of assistance to help boost the administration’s economic recovery plan and policy agenda – and save the country billions in the process. Unfortunately, the politics of money have continued to rule Washington. SLDI's public proposal for sustainable infrastructure was ignored, and little has been done to improve our dire circumstance.
While today’s weavers fail all of us, the real economic system at play will continue to deliver real value – if we manage it sustainably. Anything less, including the actions currently being taken, is akin to attempting to build on top of a falling house of cards. Those with the vision to invest in sustainable infrastructure assets will profit through this time of unprecedented turbulence – even while trillions worth of financial “assets” disappear into thin air.
<font color="#006138"><h4><i>For the latest SLDI tweets, <a href="http://www.twitter.com/sustainlanddev" target="_blank">click here.</a></i></h4><br>
<font size ="+3"><b>T</b></font>he 21st century will overturn many of our previously-held assumptions about civilization. The challenges and opportunities land development stakeholders now face – to fulfill the needs of society and achieve a favorable return on investment without harming the environment – have vast implications on the sustainability of our communities around the world.<br />
<img src="https://www.triplepundit.com/wp-content/uploads/2011/02/Sustainable-Lan…; class="center" />
<br /><br /><br />
<font color="#006138"><strong>SLDI - Sustainable Land Development Initiative</strong></font> is a stakeholder social media association now positioned to help transform the industry that creates the very infrastructure of our civilization. SLDI is dedicated to delivering sustainable land development technology and knowledge resources to promote and enable fully integrated sustainable land development worldwide.<br /><br />
<font size="+2"><b>How do we develop a sustainable civilization?</font></b><br />
By delivering the <a href="http://www.sldi.org/images/Research/sldi%20in%20focus%20-%20world%5C%27…; target="_blank">"holy grail of sustainable decision making"</a> - a universal geometrical algorithm that balances the needs of people, planet and profit - The SLDI Code™<br />
<img src="https://www.triplepundit.com/wp-content/uploads/2012/04/The-SLDI-Code-3…; class="left" /><a href="https://www.triplepundit.com/2010/10/achieving-sustainable-land-develop…; target="_blank">The World’s First Sustainable Development Decision Model</a> is symbolized as a geometrical algorithm that balances and integrates the triple-bottom line needs of people, planet and profit into a holistic, fractal model that becomes increasingly detailed, guiding effective decisions throughout the community planning, financing, design, regulating, construction and maintenance processes while always enabling project context to drive specific decisions.
<br /><br />
2400 Green Street, Suite 201<br />
Dubuque, IA 52001<br />
Contact: <a href="mailto:firstname.lastname@example.org">email@example.com</a><br />
<br /><br />SLDI Co-founders: <br /><a href="https://www.triplepundit.com/2010/08/terry-mock-sldi-founder/" target="_blank">Terry Mock</a> <br /> <a href="https://www.triplepundit.com/2010/08/tony-wernke-founder/" target="_blank" >Tony Wernke</a><br /><br />
<img src="https://www.triplepundit.com/wp-content/uploads/2011/02/Fractal-Frontie…; class="left" />Read <a href="https://www.triplepundit.com/2011/02/universal-principles-sustainable-d…; target="_blank"><em>The Fractal Frontier - Sustainable Development Trilogy</em></a>.<br>Read <a href="https://www.triplepundit.com/2013/01/budding-model-sustainable-communit…; target="_blank"<em><i>Developing a Sustainable Endgame for the Global Economy</i></em></a>
See history and evolution of SLDI @ <a href="https://www.triplepundit.com/2010/09/sldi-foundational-primer/" target="_blank">SLDI Foundational Articles</a>