As I write, the stock market futures are up, as are the European markets, largely in reaction to Obama’s push over the weekend for a stimulus focused on infrastructure spending, as well as to the increasing likelihood of a Big 3 bailout.

So, while economic pain will continue in the short term (and yes, for many it will be very painful), I’m starting to be sanguine about our collective economic future. But what does it hold for each of us? Read what Carlota Perez writes in Technological Revolutions and Financial Capital about the 5 great booms and busts since the beginning of the Industrial Revolution in the late 1700s:

Each time around, what can be considered a ‘new economy’ takes root where the old economy had been faltering. But it is all achieved in a violent, wasteful and painful manner. The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end…the time when the rich get richer with arrogance and the poor get poorer through no fault of their own…

When the financial breakdown comes, the party is over and the time comes for analyzing what went wrong and how it can be prevented. Though the debate about the causes and the culprits can go on forever, the more practical task of setting up an adequate regulatory system and a set of effective safeguards is soon undertaken. Thanks to the crash and the recession, there is a newfound readiness to accept such rules on the part of the – until recently arrogant – financial wizards, now sobered up.

If, at this turning point, the institutional adjustment is successfully achieved, what follows may be a golden age.  It can be a period of full employment and widespread productive investment. It can be a period of full employment and widespread productive investment, a period when production [v. finance] is at center stage when at last the benefits of the system begin to spread down and an era of ‘good feeling’ sets in…

Some are already planning for it: read more.

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