(MONEY Magazine) – In his 1997 book, One World, Ready or Not, left-wing muckraker and Rolling Stone writer William Greider argued that the global economy could collapse because of industrial overcapacity. With "global recession" now replacing inflation as public enemy No. 1. MONEY's Pat Regnier checked in with Greider recently to ask what he thinks should be done.

Q. Can you explain the term overcapacity?

A. Companies go out and build more factories that produce more than the world can consume. At the same time, the same dynamics are depressing wage income. Whether it's high unemployment in Europe, declining real wages in America or repression of worker rights in Asia, your consumption base is not keeping up with production. As one corporate executive said to me, if you keep pounding down costs and wages, who's going to buy all this stuff?

Q. You've drawn parallels between today and the days leading up to the Depression. Is it really that bad?

A. I've sort been tagged as a Chicken Little, but we are in an unwinding of both real economies and financial values, and that generates fear. When things then go off the rails, people get skeptical and hunker down. That leads to a depression.

Q. What should be done?

A. The gut question is what to save first, the financial markets or the real economy of production and consumption. I argue that if you save the real economy, finance will get well on its own. We have to cut taxes and interest rates and accept the necessity of running budget deficits for a couple of years.