During bad economic times people seek ways to get more for their money – in other words they try to become efficient spenders. The trouble with that thinking, it’s bad for the economy. What we want is a thriving economy where there’s a chicken in every pot and the future is rosy. Woefully, a thriving economy is highly inefficient.
Take saving money. All money advisors advise people get out of debt, save a portion of their salary and only buy what they’ve saved up for – good Puritan ideals. If everyone followed this advice we’d fall into a world-wide depression. The economic success of all depends on everyone spending as much money as they can. If we had a world where the only credit card spending was paid off at the end of the month, people wouldn’t buy nine-tenths of the crap that they do. That’s a lot of people out of jobs. And when those folks lose their jobs, even more bad things happen, and a recession becomes a growing snowball rolling down hill.
There’s always a silver economic lining, even to bad things. If everyone was honest we wouldn’t need jails, police, lawyers, judges, counselors, bail bondsmen, mystery writers, cop show producers, and so on, as I’m sure you get the idea. I hate the idea of crime. Crime is the true terrorism in America. But ending crime would be like one of those stories about a person finding a Genie in a bottle and getting a wish that turns out disturbingly screwed up. If someone did get to make that wish and tomorrow all illegal activity stopped we’d have a whole lot of honest people out of work, and a lot of criminals previously not working, would be looking for jobs too. Could the world’s economies handle the impact of so much ethical behavior? I’d much prefer a crime-free efficient economy and the main way to reduce crime is for the economy to produce a lot of good jobs. It’s a Catch-22.
The same reverse philosophy could be applied to the advice about eating right and pursuing healthy lifestyles. If everyone ate healthy, how many people would be out of work when all the fast food restaurants went belly up? Add in the junk food makers, their related industries, vending machines, packaging, salesmen, suppliers, warehouses, etc. And then think about all the health care workers that clean up after we lead lives of poor healthy choices. Sure, we’d produce a lot more sport fitness jobs, but would they make up for all the lost careers selling evil calories?
What if everyone bought the store brands instead of the big name brands? What if everyone jettison their designer clothes and shopped at Target and Penney’s? What if everyone wore sensible shoes and drove practical cars? What if people gave up vanity, putting the make-up makers and cosmetic surgeons out of business? What if everyone stole their MP3 songs and DVD movies?
Certain things in life are vital: air, water, food, shelter and jobs. And maybe jobs should be listed third because getting food and shelter without a job is very difficult. Right now America is in a panic over an economic downturn and we see everything about the future through the spectacles of fear. It doesn’t seem to matter that there’s more peace and prosperity now than at any time during all of history.
Everyone is wailing and gnashing their teeth that gasoline costs $4 a gallon. Forecasters have been predicting that for forty damn years – so why all the tantrums? Nor do people seem to notice that the high price of gasoline comes just at the perfect time when we need to wean ourselves off of fossil fuels because of war and global warming. It’s a good thing. It’s our second warning before economic hell comes to town. We knew back in the 1970s that living off of cheap oil was like borrowing from the Mafia. Is it so surprising they’re breaking our legs right now? And we really haven’t had a true oil crisis, because no one is going without yet. Wait until there are oil shortages. That’s when they chain cement blocks to us and throw us in the ocean. Are you ready for the day when there will be no gasoline for sale at the pumps? Gas lines are just one terrorist act or hurricane away.
Cheap fossil fuels made for wonderful sensible things like wooden toys made on one side of the planet, practical to sell to people on the other side of the globe. See where the economics of inefficiency come in? We use cheap fossil fuels to move our fat asses, which desperately need exercise, around in 6000 pound vehicles, instead of vehicles, if they were efficiently designed, weighing in at 500-1000 pounds, and use renewable energy instead of molecules sequestered by the Earth millions of years ago to get carbon out of the atmosphere and allow life to blossom.
We may be the smartest creatures in creation, but heck, we ain’t smart enough not to poison our only habitat. When you live in the basket with all your eggs, eating omelettes every day is dangerous.
To pull ourselves out of this economic mess we need to learn to consume more while using less, a Zen koan if there ever was one. Moving music to MP3 files is a perfect example. Distributing MP3 music requires an infinitely small fraction of the resources it took to make and sell CDs. The demise of the CD puts a lot businesses and people out of work, but if the music industry worked it right they could eventually create a lot more jobs. This economic theory fails if you steal the MP3s.
If everyone had solar panels on their roofs it would require the creation of whole new industries and millions of jobs. To feed and educate all the needy people in the world would create more millions of jobs. To build houses that withstand hurricanes, tornadoes, floods, fires and severe weather of the changing climate will create more millions of jobs. There is no end of jobs to be create because of need. There is plenty of economic activity, both efficient and inefficient if you have the vision to see it.
I know a lot of Americans are suffering because of the current economic crisis, but I have to agree with Phil Gramm that part of our economic recession is a “mental recession” and we’re doing too much whining. Hell, we’re not living in Afghanistan. What happened to that American spirit of when the going gets tough, the tough get going? I’m voting for Obama, but I didn’t like his quip about not needing another Dr. Phil. We need all the positive thinkers we can get. There’s lot about McCain that I like, and if he wins I won’t be too unhappy, but his spin-control pandered to voters rather than exploring the point I think Gramm was trying to make.
During election times all voters become beggars looking for handouts demanding that their politicians promise and promise and promise. Politicians get nowhere if they aren’t leaders. Of course sometimes they lead us off the cliff into places like Iraq, but didn’t George Bush take us there because he was playing off the country’s fear? We’re living in the current economic chaos because of greed and the refusal to think and pay attention. Do we really need brilliant hindsight to know that making house loans to people who can’t afford them is silly or owning SUVs are a bad idea when oil was predicted to run out forty years ago?
Our crazy economy reminds me of the classic science fiction story, “The Midas Plague” by Frederik Pohl, where consumerism drives the economy so much that the poor are forced to change clothes several times a day to keep up with production – because to make less would hurt the economy. In this bizarro world, the rich get the freedom to live without being consumers, but the poor must consume like hamsters on a wheel to keep the economy going.
Who’s fault is it if we take the most powerful and prosperous country in the world and run into the economic ground because we all like to make bad choices? For decades we have built an economy on inefficiency. What happens to China when we stop buying all that crap we don’t need? What happens to the U.S. if China suffers an economic chill? It’s like “The Midas Plague,” we could stimulate the economy by forcing the poor to go into debt and buy a new HD TV every month.
Right now everyone is panicking and cutting back on their spending, but if you wanted to help the economy, you should be doing just the opposite. Now, here’s the crucial part – your economic decision has impact. You can make an efficient choice, or a wasteful choice. If you buy a new HVAC that uses 1/3 the energy as your old one, then you have stimulated the economy and reduced the demand on fossil fuels, plus saved yourself some bucks. If you fly to Paris for a vacation, you have helped the airlines, but hurt the rest of us by increasing the demand for oil. You can’t win for losing sometimes. But if you had the choice between flying on a plane fueled by green technology or old technology, your choice could build a new industry.
We need to cowboy up and channel our ancestor’s pioneering spirit. We need to take responsibility for our actions. Like the old Pogo cartoon said, “We have met the enemy and he is us.” Whether gasoline is $2 or $4 or $7 a gallon, the choice is made by us, we set the price. If you want gasoline to go to $7 a gallon, keep burning oil like there’s no end of it, live like the oil companies will always find new resources, use it like we’ve been doing for the last thirty years. Keep panicking over the economy and oil prices will rise. Keep advocating going to war with Iran and oil prices will rise.
We need to get our heads together, overcome fear like FDR taught us, become frugal like our Puritan forefathers, develop green technologies, and oil prices will come down. If gasoline went to $10 a gallon, but we had cars that got ten times the mileage, it would be like getting $1 a gallon gas. When gasoline was $2 a gallon we could have been driving cars that made it equal to 50 cents a gallon, but we didn’t. We collective decided to drive cars that would force gasoline to become $4 a gallon. Our choice – so why bitch and moan now?
The other lesson of this current economic crisis is the world changes. We built our current economy psychology, retirement system, investment system, and all our financial expectations around the idea that the world won’t change and growth would be predictable. How stupid is that? Our current state of economic fear is because we’re having to deal with change. Change is as constant as time. People hate change, but we’re the dominant species on this planet because we’re adaptable. Humans can handle habitat change that puts all other species into extinction, but that’s at the species level. Cultures go in and out of existence like TV series. Because the U.S. is a very diverse culture, we can take quite a beating and still keep on ticking. Go study your Douglas Adams and Adam Smith, and don’t panic.