The free market guru Milton Friedman understood what so many progressives do not: that crises create opportunities for radical change. Naomi Klein called this the “Shock Doctrine.” One of Friedman’s opportunities was the brutal 1973 coup in Chile, which opened the door for the market-opening fundamentalism that Ronald Reagan and Maggie Thatcher then pushed around the world in the 1980s.

Today, the global and U.S. financial meltdowns offer such an opportunity for progressives. A progressive shock doctrine.

In this crisis, the victims are the millions of workers who have lost their jobs (600,000 in the United States in January alone) and the millions of families who are losing their homes. The villains are the executives whose reckless behavior got us into this crisis and continue to pocket massive bonuses and redecorate their offices while the economy burns.

Obama has embraced bold rhetoric, lambasting executives for their “culture of narrow self-interest and short-term gain at the expense of everything else.” Even business professors, such as Harvard’s Rakesh Khurana and Andy Zelleke, are trashing the prevailing corporate milieu wherein “little has been meaningfully valued by either executives or shareholders beyond the short-term accumulation of wealth.”

Yet neither Obama nor most progressives are seizing the moment with bold proposals to meet the growing anger across America. A notable exception is David Korten, who has just released a 196-page Agenda for a New Economy, building on a series of articles in YES! magazine.

Korten is nothing if not bold. His answer to the financial crisis: Close down the Wall Street casino. Replace it with a revitalized Main Street by resetting economic priorities to support local economies and dignified work that best serve us all. Instead of “phantom wealth” that doesn’t create anything of value, let’s prioritize the real economy.

Korten also understands that we must use the economic meltdown to solve the other giant global crisis: climate chaos. His transformative agenda of vibrant local economies can deliver us a carbon-free economy within a few decades.

How do we do it? According to Korten, we have to redefine how success is measured. He has sharp ideas on how to get the market price of goods to reflect their full costs of production, including their adverse impact on workers, the environment, and communities.

In his real-wealth economy, government and citizen groups work to reallocate resources from the military to health care, from cars to public transportation, from mining to recycling, and from suburban sprawl to compact communities.

We close down the Wall Street casino through smart regulation, a transactions tax on the purchase and sale of financial instruments, and a fair tax system. We create a set of rules and incentives that favor human-scale businesses owned by local stakeholders. Korten is full of ideas on democratizing ownership and reclaiming corporate charters from footloose global firms. And, he is smart enough to know that these solutions work best if they are coordinated across countries.

The book is compelling, urgent, and easy to read. It will be a great tool to help harness the anxiety and anger gripping our nation. And it will link together the disparate parts of our country to work for progressive economic change, including grassroots groups like Jobs with Justice, which is has working with my own Institute for Policy Studies to create a new comic book on the meltdown. It will also draw in an organization Korten co-founded, the vibrant Business Alliance for Local Living Economies, which is spreading innovation among local business leaders, and YES! magazine, which has posted an excerpt from Korten’s book, entitled “The Speech President Obama Should Deliver.”

From low-wage workers, to local entrepreneurs, from independent thinking elected officials to the global networks that brought you the Battle in Seattle a decade ago, there’s a new questioning of the Wall Street-based economy. All who are ready for a new approach would do well to spend a few hours with David Korten’s big ideas as they link their work with one another.

John Cavanagh is the director of the Institute for Policy Studies, a member of the New Economy Working Group, and co-author of Development Redefined: How the Market Met its Match (Paradigm, 2008).

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