Globalization has generated hyper-specialization in local and regional economies, stripping them of resilience. Fully exposed to the demand flows of a globalized class of consumers with surplus discretionary income, regions specialized in tourism, manufacturing, commodity mining, etc.
All these regions are now facing a structural collapse of global demand, and they have no diversified local economy to cushion the blow to jobs, incomes, profits and tax revenues.
This is the future of vast swaths of the global economy: labor, commodities, assets, goods and services, and the tax revenues that are skimmed from the private sector, will all crash as supply far exceeds demand.
The price of a great many assets will crash, out of proportion to the decline in demand. Only the global top 10% can afford to buy pricey vacation homes, for example, and as the top 10% own 90% of the assets that are melting away like ice cubes in Death Valley, when their ability and willingness to buy assets they can no longer afford vanishes, the market price of those assets can fall 90% or even to zero.
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