Posted by: Nicholas Davis | March 10, 2009

A completely impractical guide to saving the world

OK, enough with these itty-bitty stabilization methods by a plethora of seemingly-confused leaders on the advice of seemingly-confused economists.

Just say that someone gave you global exectutive power over all financial markets and carte blanche for any type of intervention into economic policy and other markets as you saw fit. What would you do to make things “better”?

Your goals:

  • Restore key functions to the current financial and economic systems and get lending and long-term investment working
  • Ensure that the downsides and upsides of the solution are fairly distributed – socially and geographically
  • Instil confidence in markets (at least in the long-term) and return economic activity to it’s (safe) potential growth level
  • Create a structure that is more stable internally, and robust to external shocks (don’t just regulate for the last crisis)
  • Avoid bankrupting key countries or otherwise writing-off entire regions in the process
  • As much as you can, ensure the new system is self-sufficient and self-repairing, able to evolve and adapt without major disruptions required
  • Do all of this within about 2 calendar years in an completely transparant manner

I’m looking for actions that could be taken by a benevolent dictator (assuming you’re benevolent) to achieve the above goals (even just partially). You get to spend up a lot of money, but let’s assume you won’t spend more than 20% GDP for any single country you’re drawing funds from. But you can also effect change by changing regulation, finding methods for instilling practical wisdom, convincing people to change their behaviour etc.

Post your ideas in the comments!

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Responses

  1. Reduce all debt! Figure out a way to deleverage the financial system and then not re-inflate it in the name of future growth. Then fix global imbalances…

  2. […] pour les Nuls (i.e. me) Following from my last post about solving the global financial crisis and a previous one about bank nationalization, I’ve just come up with a completely […]


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