Sober Perception Breeds Good Judgement of Our Economy

The US economy seems like it is broken, so goes the video, A Cure for Capitalism. Regardless of your views, the speaker in the video has some great advice to share. You do not have to watch the video, nor be read up on the latest economic forecasts to see that things are not what they were in terms of opportunity, prosperity, and money circulation. I routinely pretend as if things are okay, but occasionally, I see a few things that show me the economic challenges of our times. As we mentally push through the pronouncements of economic decay and turmoil on the horizon, many of us will continue work jobs, participate in society as have generations before and do well in many ways. Some people say the entire economy will crash. Perhaps or maybe not. The important thing is to deal with the reality and build a map in your mind for how to navigate this world. This blog post is a range of observations I have about the general economic environment in which we operate.

US Economy

There is a shift in the US Economy. Yes, technology has driven off jobs. Outsourcing is real. Those two things, technology and outsourcing are symptoms of a much larger problem. Technology and outsourcing are not the cause of wages going down and less people participating in the workforce. The #1 cause was predicted nearly 200 years ago. The #1 cause of economic decline, all else being equal, is a high population.

You can be absolutely sure that unsound or outdated policies, imprudent judgement in finance, industry, and governance definitely contribute to the decline in economic conditions. However, these kinds of things can be absorbed well with minimal negative effect if the overall social climate is properly construed within a given population size. High population has reduced some of the natural shock absorption for out of control economic developments. Combined with bad policies and bad resource management, the economic travails can be expected to occur with regularity.

There are more of us than our designed economic system can seem to sustain. I say designed because the economic system we survive by was designed by people hundreds of years ago and they designed it primarily for the times in which they lived. Updates to the system has occurred over time, but it seems largely what the original theorists envisioned. The US economic system has held up across hundreds of years and millions of people. The big companies today seem to have enough people to make the products and operate the services they require and they are “curious” about cutting many of those positions to keep more of what they earn.

That is the instinctive diagnosis. There are more people alive, being borne, and graduating into adulthood than are jobs available in the pool of total jobs. What is the cure given the diagnosis? Some people do believe it will take care of itself. They believe that the market will correct itself and the opportunities to include more people in the classic American dream will arrive. I also believe in things working themselves out but you can influence that to a certain point and contain or diminish the damage experienced in a correction.

Government

People talk about campaign finance, lobbying and the like as maladies. I do not see any of that as an issue. Here is why. Many lobbyists and influencers have quite a bit of money to work out of an office everyday, conduct Internet research, call people on the phone, and talk for hours about the fine details of 1,000 page legal style documents called legislation. That is my gross oversimplification of what lobbyists do.

What you hear from the news is a summary of all this detail work. This detailed interaction with the political process is way outside the bounds of normal patience, knowledge, and interest level of most of us. Do we care about 1,000 page laws? We do care about the overall summary of the matter but the details of the process does not make for captivating reading material. That is why it is not really an issue.

What we see is a process in which you actually need money to have an office, wear a suit and engage with legislators at their level which is well above middle class economically. Most of us could not work with this process because you couldn’t work a job and be an effective lobbyist at the same time. You can either be a lobbyist or be a person that works. Lobbying is a full-time job out of an office in which you do some fairly technical activities involving lots of analysis, research, sales, phone calling, sitting in meetings and keeping track of what is happening and deciding what to do about whatever is happening.

That is why most of us are not involved in the political process. It is not a process where you just go up to a legislator, share your views and see things change. It is a structured, organized, formal process that requires money, time, and a certain appearance and cultural, social background and economic class in order to suitably address legislators. Most of us do not qualify to meet this criteria.

The other reason the financing and lobbying does not matter that much to the rest of us can be glanced by the disposition of TV news reporters. TV news reporters have gotten in front of cameras for over 40+ years, told the viewing audience what was going on and yet they continue to lament the unappealing state of politics and government policy. Thankfully, we are all more informed at least in terms of an interpretation of what is going on, but effective advocacy that results in quality change is rare.

What to say about an informed electorate. Either the message has to be delivered more effectively or the message is not important and the audience collectively knows it does not matter. Others say that it is a small, incremental process to move from an awareness of insufficient and unfavorable policies to a movement for change that bears results. Public advocates call for more involvement among the populace in order to bring about more immediate transformation. I posit that the structure of the process itself holds little promise of such a development.

Some of these observations seem aligned with some of the findings from a Princeton and Northwestern University study. An interpretation of the study seems to be that most of us truly do not have a voice. Most of us just do not matter in the eyes of the larger system. There are pros and cons to that and the society at large can search to see which is more favorable.

Solutions

Let’s move beyond matters of governance back to the arena of economics, markets, and jobs. There are a couple of solutions about. A more lengthier form of my ideas to the conversation can be found in an earlier article I wrote. My perspective has shifted slightly since then and the summary of views are as follows:

Small Business Society

The best solution by far is to de-emphasize large companies and put intense investment into small businesses. The climate does not look favorable to that long-term but that could change. Enabling an environment of clear but balanced competition that improves the prospects for widespread employment in a way that leads to a higher percentage of individual prosperity is the surest way to a full and sustainable recovery.

Widespread Federal Job Participation

At the same time, providing excellent and more accessible employment paths into Federal service could benefit a huge # of people. Federal service could stabilize the lives of many so they could return to the private environment personally resourced to build businesses. In a sense, widespread Federal employment can be viewed as the society looking to itself during this vast period of correction.

Designed Corporate Patronage

A deal between large companies and government to hire more people is another option. That is oligarchy of a kind. That may be a temporary solution that is the very definition of unsustainable. It may also prove pretty corrosive and self-defeating. When the payrolls have to be cut again, but in much larger #’s than in previous times, the ripple effect could be pretty devastating. Not to mention the terms of the deal could be hugely unfavorable to a wide class of persons. Still, this is a solution with possibilities.

Population Size

What currently is a problem in terms of economics could be an opportunity for nearly all. Imagine if there is more capacity, more food, more resources in terms of built stuff than there is room to store. In that case, maybe there could be a valve by which some of that excess capacity could be directed to those who have no access to labor exchanges due to a far diminished demand for labor. I propose, the excess capacity that is possible through population, technology and advanced process management could very well serve to enhance the lives of those who, due to the condition of the market itself with respect to the share of available job openings, could benefit from that excess. The warning of course is that doing this would increase population growth exponentially, but I think the world could handle it.

Be Ready to Survive

I want to switch gears a little bit and drop in a line about survival. When the Great Recession emerged in late 2008, I had no idea what happened. I was in a corporate job and had a really good life. Even when people I knew who were well read about the motions of Wall Street talked about AIG and over extended insurance products, well, I really had not a concern in the world. The discussion seemed theoretical to me with no practical connection to the world. I look back at that time and ask myself how could I not know?

I changed jobs, thought things would progress more or less as they did the preceding 10 years of my career. You could say I was blinded by my past successes. I will not bore you with the details, but you can read about my story in earlier articles on this blog. Suffice it to say, I had some challenges ahead of me in terms of employment and basic subsistence. Anyway, the experiences I had reminded me of things I had forgotten during the nice years of the luxurious and aspirational 2000s. That lesson was that not everything lasts and you do better to be prepared if the world you see abruptly shifts another way.

National Emergency

The economic system could just collapse as it almost did with the fall of Lehman Brothers in 2008. One morning or mid afternoon, you simply cannot access money. Millions of people panic and it goes crazy. I think you should think about that.

War could break out. The US has avoided war on its lands for a long time, but it could happen. Do not assume that just because things carried on more or less the same for the last few decades that it would continue that way. Every person owes it to themselves to situate themselves for worse case scenarios so that they have the opportunity to survive it and come out the other side ready to prosper.

Sadly, any national tragedies reported by the news media is reported too late. By the time you hear about it, cars are already backed up on the roads, and crowds forming at grocery stores and the like. We have video of the typical on the ground response following Hurricane Katrina as an example. It may not be that way in all areas, but it is best to assume so and be prepared. Do the things today that prepared people do.

Prepare

Do not let your guard down. You may live in good times, but they are not guaranteed to last. Tragedy is when the good life disappears quickly and without warning and your mind has not come to grasp with what has happened. We can be in denial that our relatively pleasant life can end. How do you prepare?

  • Read books on survival and learn how to be aware of things.
  • You have two wardrobes, not just one. A wardrobe for your normal going about and another that is more robust and low key. Make sure you have a basic wardrobe is road ready and wear it proudly so you are accustomed to wearing it and not appear out of place when you have to wear it more often.
  • Learn to consolidate and concentrate your core possessions into a single bag. Use the bag in daily life.
  • Be mentally prepared to throw away and leave behind things you want but do not truly need. We are talking about nice but survival useless things like TVs, computers, furniture, suits, DVDs, clothes irons, microwaves, etc.
  • Understand that if there was a national emergency, money may not have any value (try to use it anyway). Think about how you could barter and exchange if you needed food, a drink, or a place to stay warm for the evening.
  • Carry as much as you can comfortably knowing you will shed off some stuff on the journey to wherever.

Most of all, try not to put yourself in a situation where you have to think about everything if the good times ended. Preparation is about making decisions ahead of time and having things in place so that you can just act. You want to use most of your mental and physical energy to act rather than spend critical time thinking about what to act on. Stress can have a weird way of cutting back on your ability to think properly. Stress can make you dumb. Think while you are still comfortable. Think today, prepare today.

Maintain

Now that you have prepared, let your preparations sit for a while. Months pass. Come back to your original thoughts, your preparations. If you settled into nice clothes and indulgent behaviors again, try to bring yourself back to practical wear and simpler things. Quiz yourself on your motivations and behaviors about life and what you really need. Do you still know what planned for, do you know your plans? Do you remember where certain things are and why your wardrobe, bags, and other life configurations are the way they are? Now is not the time to look wealthy. The new reality is to drift towards the practical. Always be road ready because the glistening abodes may not always be available. Maintain your road readiness.

Physical Conflict

Unless you are a trained warrior and engagement is inescapable, even then, your very first and most developed survival skill should be how to talk yourself out of coercive encounters. Altercations are ruinous on so many levels and diverting off to a more cordial place is one of the very heights of civilized intelligence. This is not something you practice, but be prepared to exit conflict through diplomacy rather than engage. Your chances of living are far higher this way. Better to always grow allies than enemies.

Forget About All That After All (just kidding) – Final Note

All of this is just thoughts being shared on a blog post. None of it is a prediction. None of it means that things are dim and disappointing. It is very likely many of us will live good and steady if not economically challenged lives. However, the real message is to be careful of getting drunk on success, small or large. A good life as you know it is not guaranteed. The routine gifts of civil living in Western society can give many of us a false sense of security that we do well to recognize. When we can recognize and build on what is truly good apart from that which is an illusion of goodness, we are well on our way to more sustainable level of quality living.

A sober realization of your situation is a good path toward good judgement.

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