WEF 2009: Global crisis ‘has destroyed 40pc of world wealth’
This is so frustrating. (note, the quote is from 2009, but I just came across a present-day article referencing this) The world’s wealth is our infrastructure, our skills, our goods and our labor. 40% of that did *not* go away. We did not blow up 40% of the world’s buildings, we did not salt 40% of our fields, we did not trash 40% of our clothing, cars, TVs and computers, and we did not suddenly vanish 40% of our people.
Putting it another way: the Fed could print a Trillion dollars today and there would still be children in America going to bed hungry tonight.
40% of our *money* went away. How exactly that happens is a little puzzling as well, but it’s a measure of the faultiness of money as a metaphor for everything else that something like this can even happen, and a measure of the danger of the metaphor that supposed experts can say something like this with a straight face.
Actually, I should qualify that. The last time I attacked a stupid quote like this, I happened to be able to trade emails with the expert in question. He was very gracious in the face of my rough-edged criticism, and explained to me that his actual paper had said none of the things I was criticizing him for. It was the news writer’s lack of understanding showing through, not the researcher’s (supposed) ineptitude.
So I’ll simply say that *if* this article accurately represents what these economic experts said, then I’m very disappointed in their understanding of reality, or their ability to express themselves.
All of which is not to say that 40% of our money disappearing in a little over a year isn’t incredibly disruptive. It certainly is, because we didn’t take away the money evenly. I’ve said it before: if we had everyone take out all their money and add a zero, turning ones into tens, and hundreds into thousands, the effect would probably be unsettling, but not severe — little is changed thereby, and once people adjust to the fact that lunch at McDonalds now runs about $70, we’d be fine. The same would work in reverse: turn dollars into dimes (for everyone) and we’d adjust. But of course this 40% destruction didn’t happen equally for everyone. People lost their houses, their retirement funds, and their jobs. Others didn’t suffer so much, and I’m sure some profited, some wildly so.
*That’s* where the pain comes from.