This is a response to a post by one of my favorite internet bloggers - Dave Pollard.

Because this is something of a conversation, it won't make sense unless you read what he said.

His post can be found here

I agree in principle with almost everything you have said, Mr. Pollard. And I agree that there is going to be an economic catastrophe in the Usa at some point years out from here, if we keep our current course. However, it seems to me that the Usa is not unique in how it has constructed its financial sector... and so when this big problem occurs, I don't believe the Usa will suffer like Iceland or Argentina have when their economies hit a brick wall. The West is kind of bound together in one big network. And the Usa is one of the bigger players in this family of nations.

And fundamentally, I think I disagree with the narrative through which you see these issues. I look at wealth differently than you do. I don't see money as being wealth, per se. I see goods as being wealth. And I see that the standard of living has really gotten better over the course of the last hundred years, in both the West and in the East.

I see the development of industry and the development of the middle class (which provides a market for industrial goods) as being responsible for this very vast change in our society over the last hundred years. And there are costs associated with that rise in standard of living. Industrial pollution, and loss of biodiversity in different parts of the world is one of the costs. Hopefully we can establish ways of ameliorating these problems.

Look at Japan, a hundred years ago. Look at the Usa, a hundred years ago.

There has been a substantive change in lifestyle. This is what I would point to and say it shows how wealthy we are. If a person today, in 2009, can live a better lifestyle than the kings of hundreds of years ago did, that's progress.

Now, according to my models, I see the socialist policies of people like Franklin Delano Roosevelt in the States as being responsible for bringing a middle class into being. When you help the extreme poor, and give them a leg up... then they themselves will seize upon the opportunity to better themselves; they will work hard, and become the middle class.

I think that we need to have a partnership between government and business to have a healthy economy. We need education and health care provided for free. We need to give financial incentives to companies which bring wealth to our communities. We need to open our markets to developing nations which are setting up factories.

To deal with your thrust more specifically, one gist of what you're saying is that a lot of things are overvalued monetarily. I think that assertion laid side by side with the assertion that "1% of the people in the Usa own such a preponderous proportion of the 'wealth,'" leads us to an interesting conclusion. Maybe those "wealthy" people have fictional wealth. One reads all the time of people who have founded corporations, and whose net worth is calculated according to the stock price of that organisation (because they own a lot of that stock). Years later, that stock price can drop to pennies on the dollar.

You criticise a lot of things in your essay here, Mr. Pollard... but what is the way forward for a different sort of economy? Tell me that. And then answer me this: "What is the way forward for leveraging a consensus that such a change needs to be made?"

In my assessment of how things work in the Usa - people here need to learn through the school of hard knocks. Really important reforms only occur when there is catastrophe. This "financial crisis" of 2009 was averted - and that means that folks in Washington DC don't seem to see the need for any substantive reforms in the financial sector in this country.

In sharp contrast, the financial catastrophe of 1929 was not averted. And consequently a lot of important reforms were made.

Just to throw in another example of catastrophe leading to reform: The month hurricane Katrina struck New Orleans marked a very big change in attitude in the Usa towards environmentalism. Environmentalists have been calling for reforms for decades... and such people have been sidelined and ridiculed, here in the States. But after hurricane Katrina, I saw a big change in the way major mainstream news organisations - such as CNN domestic - reported about environmental issues. And since 2006, we've seen a tremendous push across the entire Western world for green technologies.

So unlike you, Mr. Pollard... I don't believe a disaster is something that is final and dark; I don't believe it is something that needs to be feared. I understand why you yourself might think that way. You Canadians are much better at reasoning things out together - and this shows in how your politicians discuss matters. CPAC shows an entirely different kind of rhetoric, than we see south of the border on CSPAN. In Canada, you discuss eventualities - and I see that you earnestly work to avoid bad ones, and also seek to promote good outcomes. But that's not how things work in the Usa. Here, south of the border, policies are formed on an as needed basis.

In my estimation, your job as a citizen of Canada, is not to try to stop the inevitable financial calamity which will occur in the Usa. Your job is to try to get your country to disentangle itself from the Usa, before that event occurs. You Canadians need to stop being codependent on us. Increase your trade with China and India and the EU. Diversify your trade habits.