A new era in economy...

...is coming, says Michael Malone. Painfully, but surely.

From where I sit, the United States government has embarked on two pieces of social engineering in the last few years. One was to make oil [as expensive] as possible to drive people to greater use of alternative energy sources — because anything less would be irresponsible and destructive to the environment. The other was to enshrine home ownership (i.e., easy-to-obtain mortgages) as a new American right — because anything less would be unequal and racist.

None of us voted on these decisions — indeed, neither was even spoken about directly, much less debated. But nevertheless, both became national policy… and both have sparked national, now international, crises. Then, once they became crises, both were blamed on ‘greedy capitalism’, instead of what they really were: legislative interference into market forces. […]

To my mind, what makes this economic crisis different from ones in even the recent past is that it has exposed the fact that there are, apparently, no real leaders left in Washington — that the intellectual capital in the National Capitol has fallen to a new low — if that’s possible. Most of all, it shows that we can no longer look to D.C. for leadership into the rest of the 21st century.

Marxists and statists of all stripes are, as one might expect, rubbing their hands in glee and declaring this the final death crisis of Capitalism. But I think just the opposite is occurring. What we are in fact seeing are the final death throes of governmental social engineering. As I noted two weeks ago, we are in a kind of Mentos-in-coke world right now — where, thanks to tech, the sheer speed of transactions and the enormous breadth of response, almost any outside influence can quickly turn the whole economy (or culture) into an explosive brew.

As it happens, out here in Silicon Valley, we have been conducting our own social engineering experiments. Three, in fact, have been at least as sweeping as Freddie Mac’s changing of mortgage eligibility rules. One of them has been to wire the entire world in a huge, high-speed global information grid (the Internet). Another has been to restructure the entire entertainment industry and its pricing model (the iPod). And the third has been to empower the citizenry to form groups based upon common interests rather than the limitations of physical proximity (Web 2.0 — social networks). […]

(Read the rest here.) The prognosis sounds good, although I am not sure that I am as optimistic. But what do I know?…