How to get out of the crisis?

A lot of effort is put in analysing the causes of the crisis. We now well understand that excess credit growth and unsustainable growth models in major economies led to the economic and financial problems we are now facing.

Problem solving and solutions are however a different matter. The UK think tank 'the Young Foundation' today published a paper entitled "fixing the future". It can be downloaded here .

We argue for adapting recovery plans to put a much greater emphasis on future growth industries rather than bailing out failing ones. Most available evidence suggests that the biggest employers of the next decade will be in health, education, care, environmental services and tourism. Yet recovery plans have been primarily oriented to sectors with smaller shares of employment and that are likely to further shrink in the years ahead. The care industry should be a higher priority than cars. The voluntary sector is more likely to grow jobs than retail banking.

All this seems to pass the "Econoshock"-test, and tries to balance sustainability with solidarity and free entreprise. Although some criticism can be given on the free market aspect of some proposals, they are not less or more subsidized than some ailing industries and companies at this moment.

Our central argument is that the majority of current policy responses have been inevitably designed to fix the past, putting right the mistakes of the banks and others. The priority in the next phase is to shift direction towards fixing the future.

And the future opportunities are very much according to the Young Foundation in line with the final chapters of Econoshock: energy and the the green economy.

The YF puts a BCG-like solution box, that combines short term and long term policies with economic and societal needs. It is worthwile to take this as inspiration for the current crisis.

Franklin Delano Roosevelt argued in 1932 for “bold persistent experimentation”, and said “it is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something”

I like the sound and the freshness of their approach.