Understanding economics is vital to understanding how to fix the problems we face.
The field of conventional economics tries to provide the tools needed to understand economics. Efforts to quantify the economy have been made, but even adherents to conventional economics understand the limitations in trying to apply theories to a field as diverse as economics. Nonetheless over the years the conventional assumptions take root in academic institutions and the like, where the knowledge is passed down, rarely changing although the theories are scrutinized when they appear to be ineffective.
The response to the 2008 crisis is an example of conventional economic theories failing to explain the problem. So it's inevitable that solutions offered by conventional economics will not work.
The biggest crisis we're facing is demographic. It's important to understand that the Baby Boomers' peak earning years are behind them. Few have much saved up, and already the cost of health care is rising rapidly due to the number of aged. Any economics solution that doesn't consider demographics is doomed to fail.
We need to distinguish between systemic problems and those we can fix. Systemic problems are those that the system is incapable of addressing without changing the system.
The best example of systemic failure in economics is Japan from 1991 to the present. No matter what the Japanese try to do, they can get little growth out of their economy.
A systemic problem requires change at the system level, and more significantly demands a change in policy direction using new assumptions and unconventional analysis.
Any country with a big bureaucracy naturally is terrified of change. It was Iceland that actually changed its banking system after the 2008 crisis. Bankers were prosecuted and jailed for the fraud they committed--hundreds jailed as opposed to only two in the entire U.S.
Of course the global financial establishment punished Iceland in the short-term, but the country has recovered nicely. Whatever pain it suffered in jettisoning the conventional banking system it has since converted into a pro-Main Street banking system that isn't dependent on central-bank intervention, largely in the form of foreign loans from the IMF.
A second big systemic issue is the issuance of money and overabundance of money. This has led to speculative bubbles. It's also led to moral hazard among many large banks--the belief that no matter how badly they manage their money, they'll get bailed out and thus are free to lose as much money as they want.
Of course the unending replenishment of money allows the banks to behave badly. Yet no matter how bad they seem to get, the government can only fine them, fines that are paid by the endless fountain of nearly free money they can borrow from the Federal Reserve, if they're big enough.
The regulations, you see, are not about making banking safer for consumers but rather are meant to serve a perverted system that forces arduous regulatory requirements on smaller competitors and shields bankers from the legal consequences of their criminal activity.
The ultimate systemic perversion is the way that the banking cartel has been allowed to borrow for essentially nothing, and lend at very high interest rates.
Clearly paying interest is an economic negative. We hear in the corporate media scarcely a word about how the monetary system works. For if we did, as Henry Ford said, there'd be revolution by morning.
What kind of country lets its banks charge the poor such usurious rates? What benefit is there to redirecting wages into ridiculously high rates of interest?
The Nazi example is the best. They nationalized the banks and made interest-free loans available to small businesses, albeit with piles of restrictions no doubt. They rose politically because they implemented policies removing the drag of interest, which doesn't need to be charged except by a system beholden to the bankers. (In Europe Jews had been limited to fields like banking, so anti-Semitism popularized the dismantlement of the German banking system.)