A difficult transition awaits developed, corporatist capitalist economies: their problem is how to downsize both states and corporations to confront the competition of emerging economies in the new era of “small is efficient”.
Here is a lucid diagnosis posted in the CNBC’s blog:
“Robin Griffiths, technical strategist at Cazenove Capital, told CNBC that key markers, including the long-term low yields on U.S. Treasurys, indicate that the U.S. is in a depression not just a recession.
The bond market is clear and unequivocal in its message—this is a depression, not just a period of slower growth," he said, adding that a different approach was needed by developed economies to get out of the current mess.
History shows that what we need are small government, low taxes, and low regulation, but what we have is big government, big taxes, and big regulation, which is not going to work this time," Griffiths said.”
This is nothing less than a U-turn in economics conceptions and policies.