Sep 25, 2010

A Holistic Economy

Heard a great interview on Bloomberg radio with Kathleen Hays, the Hays Advantage, on 9-21-10.
You may be able to find it if you go to the Bloomberg Radio website.

We like Kathleen Hays since she is smart, a trained economist, comes off as middle of the road most times, and is from the NW of the USA so you get a different perspective from the usual NYC investments marketing machine that CNBC and Fox biz always roll out

She spoke with a gent John Fullerton who apparently was burdened by such guilt for spending many years as a derivatives trader on Wall Street with Chase that he is now out pushing the green economy.
Thankfully he appears very smart and has many good ideas. His bio is at the article's end.

Mr Fullerton says our current model of economic growth has reached the max levels the biosphere will handle and the world is beginning to show signs with the decline in biodiversity, climate changes, and stress on food supply.

He sees a need for blending economics and environmentalism because he feels they are so connected.

He says finance is the fuel of the economic system and the fundamentals of finance should be changed to reward sustainability thereby changing the economic model of the world.
He says we need new metrics whereby pricing internalizes the externalities of the traditional economic system and more closely measures the carbon footprint.

We need to transition the economy to one where economy is a subsystem of the concerns of the  biosphere.

He mentions a need to balance efficiency and resiliency not just resiliency and that we need a
regulatory response to resiliency.

A good website that explains his bases is Capital

He suggests Herman Daley's book For the Common Good: Redirecting the Economy toward Community, the Environment, and a Sustainable Future as good reading to clarify his ideas.

We of course are always intrigued by these smart people rolling out their ideas without any mention of population control. If the population of the Earth can be forced to reach a near steady state and then a gradual reduction of human population, the demand on the Biosphere will immediately drop.

This seems part and parcel of what any "New Economic Thinking" should entail. Sadly most of the town criers of these ideas usually have 4 or 5 kids themselves.

But Fullerton's ideas are refreshing-we just have long way to go sadly since most of the next gen of Wall St is now being taught the same old "maximize shareholder value BS" that is very Un Green.

Here's Fullerton's bio:
John Fullerton is the founder of Level 3 Capital Advisors, an investment firm focusing on sustainable agriculture businesses.  Previously, he was a co-founder and CEO of Alerian Capital Management, a $300 million investment firm focused on midstream energy infrastructure.  Prior to Alerian, Mr. Fullerton was a Managing Director of JPMorgan.  During his career at JPMorgan, Mr. Fullerton managed various parts of the firm's industry leading capital markets and derivatives businesses around the globe, and subsequently was a private equity investor for JPMorgan, culminating in his role as Chief Investment Officer of LabMorgan, responsible for the firm's "eFinance" private investment activity.  Mr. Fullerton has also been a director of numerous private and public companies and was a member of the Long Term Capital Oversight Committee that oversaw the $3.6 Billion rescue of the distressed hedge fund in 1998.  He is currently Chairman of New Day Farms, (an organic produce grower in energy efficient greenhouses in Virginia), and a board member of Investors Circle, and The National Dance Institute.  Mr. Fullerton received a Bachelor of Arts degree from The University of Michigan in 1982 and a Masters in Business Administration from the Executive Management Program at the Stern School of New York University in 1986. 

He's also  involved with the Institute for New Economic Thinking

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