This is a guest post from RogerK, a hardware engineer from San Jose California who thinks and writes about the finite world paradigms which will be needed to replace the 'no limits' paradigm which exists as the cultural norm of modern industrial society. Tonights post expands on a comment he made in last weeks guest essay from Herman Daly on a Steady State Economy. Roger previously has written a related essay on TOD here, and a follow up here.

This is a repost of Herman Daly's comments on the credit crisis from October 13 of this year. The original post and comments can be viewed here. Given Professor Daly's association with John Holdren, one can hope these heterodox first principles are being discussed at the highest levels.

Previously, Herman Daly wrote a guest post on the Steady State Economy, outlining core suggestions on how to overhaul our banking, financial (and value) systems. I encourage everyone to read it (if short on time, please read the conclusion). Professor Daly was Senior Economist at the World Bank before leaving to teach Ecological Economics at University of Maryland's School for Public Policy. He was also the catalyst for me to leave my own financial career and return to school to study the real economy (i.e. what we call the human economy is only a small part of a larger closed system). Below the fold are his thoughts on the current crisis (current being defined as last 30-40 years or so). (For comparison, here are links to what 'mainstream' economic icons George Soros, and Bill Gross are saying.)

It is doubtful we can adequately inform energy policy without addressing the linkages between equity, the environment, finance, and our end goals. I post this on theoildrum not only because Herman is one of my tribal elders but because his eloquence, courage and foresight on these issues have historically been, and continue to be, ahead of the curve. During his resignation speech from the World Bank, Herman recommended the Bank take "a few antacids and laxatives to cure the combination of managerial flatulence and organizational constipation giving rise to such a high-pressure internal environment." To improve interactions with the external world he prescribed "new eyeglasses and a hearing aid."

Nearly 15 years later, here is Professor Daly's current synopsis of the state of economics and his prescriptions for change.