It is sheer madness that Wall Street types insist some changes in the rules of accounting can turn around the global economy.

Fixation on such exotic notions as the mark-to-market and up-tick rules only perpetuates the “smoke and mirrors,” and completely misses the mark on what’s really wrong to begin with.

The typical Wall Street operative, like an accountant, has as his life’s objective evening out balance sheets to conform them, among other things, to investor expectations. Therefore, if there are rules that make it hard for that to happen, there are howls to change the rules.

It has been by following stock market and typical accounting principles that many U.S. newspapers, for example, are now on the brink of bankruptcy. Faced with shortages in revenues, newspapers cut non-revenue generating costs. So, newsrooms were gutted while preserving advertising sales staffs.

What accountant can figure the true value to a newspaper of a good reporter? All the accountant sees is that the reporter is taking a salary, and not bringing in revenue.

So, by such flawed thinking, newspapers undermined the very basis of their value, which is not an investor “rate of return,” but content. It set in motion a downward spiral. Less news, less relevance, less revenue, less news, less relevance….and so on.

Moreover, the first news components that were tossed overboard were the ones that could have salvaged them: local news covered in depth in a way that no internet alternative could keep up with.

The same contrasts between nominal market value and reality, applies to small businesses more generally, or local governments. The same kinds of mistakes are made. Rather than building for the future, the tendency is to hunker down and cut costs, including in areas that may be vital to future growth.

On a macroeconomic scale, this is at the core of what’s wrong globally. For decades, the global economy has been fixated on growing nominal values, while paying no attention to actual values, much less to the effect of the former on the latter.

There has been a breathtaking expansion of nominal value, to the point of starving and weighing down actual value, reflected in such practices as routinely leveraging a mortgage or other debt instrument to 40 to 1, and higher, above its original face value.

This is pervasive throughout the economy, where since the 1950s, wealth gradually became redefined away from the ability of an economy to sustain a rate of improved standards of living, as measured from a second derivative perspective.

The components of a sustainable rise in standards of living depend on a growth in operational, educational and health infrastructure, including of products that contribute to them, and of the extension of those benefits to all stake-holders, workers, administrators and owners alike. This extends globally, by definition.

But escalating out of control since the Reagan revolution of the late 1970s, wealth became structurally redefined as nominal, and not actual. It became defined in terms of values not based in the second generation and beyond benefits of global living standard improvements, but in those defined by, “How much can I get for this right now?”

With the help of credit (a.k.a usury), the value of shoes became not their cost of production plus a reasonable profit, but an exorbitant nominal cost rooted in marketing and image-formation factors. The same applied to almost every consumer item in the overall economy, from cars to houses to clothing, leisure items and food.

So what’s actually happening now, on a global scale, is that the air is coming out of all this false, nominal valuation, from exotic financial instruments to the cost of a cup of coffee.

This isn’t some cyclical recession that will turn around later this year. This is, for the entire planet, veritably an apocalyptic age, marking a reckoning of decades of unparalleled speculative excess, with no end in sight, short of either a global conflagration and new Dark Age, or a massive revival of an alternative, real value-based set of policies and practices that would be a Wall Street nightmare.