The economy is in trouble – or at least it seems to be. This is hardly a shocking statement for anyone who has not been under a rock for the last year. I sit and I wonder (as I am sure many people do) just how we ended up where we are. I am not an economist or politician or any of the people who are presumed to have an understanding of the dynamics of national and global economies. I am just a poor dumb physicist/mathematician/software developer/business person, making a few observations.
1) Is the state of our economy driven largely by media? I have noticed during my lifetime that at all times, there are certain people in the press, on TV, publishing books, etc. with “end of the world” stories about the coming economic crises. It seems to me that at certain points, mass media starts giving these doomsayers much more attention than they deserve, and further that a year or so after that happens, our economy tanks. I wonder at times if it is not at least partially a self-fulfilling prophecy – if the mass media tells us for long enough that things are bad, then our resultant behaviours cause things to get bad.
It is kind of like a (not serious) theory I have about airplanes. What if heavier-than-air flight is really impossible? Maybe airplanes really only work because the people on board believe that they work? At any given time, there will be some people who do not believe, but as long as enough believe, the everything is great. But what happens when suddenly a critical number of people on the plane start thinking “Hey, this can’t work”? Poof, the plane crashes.
Maybe the economy is something like that.
2) Big banks, Wall Street, rich people, major corporations. Everybody’s favourite targets. Have they done a lot to contribute to the current problems? Of course. Are they and they alone to blame? Hardly. Our economy got where it is because pretty much everyone involved drove it here. The real estate industry predicated on constantly rising home prices. The mortgage bankers finding new and creative ways to allow people to afford the ridiculously expensive houses they really could not afford. Consumers expecting that they should be able to afford these houses. Consumers digging themselves huge debt loads buying things they could not afford. You. Me. Everybody. We are in this mess because we all created it. Maybe to greater or lesser extents, but we all played along (except maybe for the segment of the population who never had the opportunity to play, because they have been in an economic crisis the whole time.)
People are talking a lot about this psychology of entitlement, mostly referring to executives at banks and on Wall Street. I think the problem goes much deeper than that. Our whole society has a feeling of entitlement. We work hard, so we deserve that bigger house, that newer car, that big vacation – who cares if the numbers don’t work out, we deserve it, dammit. It is the whole “American Dream” (or in my case, “Canadian Dream”) concept. It is just that, however. Just because you have worked hard and you deserve it, does not mean it will happen.
3) Values. Not religious or moral values, but the values we place on things. Who are the highest paid people in our society? Corporate wheelers and dealers. Professional athletes. Movie stars. TV stars. Musicians – at least the popular ones. I know and understand the economics of why these individuals are paid such ridiculously huge amounts of money relative to their contribution to society. I understand that what they get paid is an investment by someone, and they get huge amounts because those paying them expect to get much, much greater amounts in return for their investment. The athlete gets huge sums of money because he/she puts butts in seats at stadiums, and sells merchandise.
The problem is with the people who buy into this crap. The people who pay silly amounts just to see a sports game, or a movie, or a concert. The societal value system that says these people are worth paying to see.
It is also silly that in our society, these people are valued at such a level, when the people who really have the power to solve the worlds problems – researchers in science and engineering and medicine and throughout our universities have to fight tooth and nail to get enough money just to keep the research going. Not to mention the value we place on our educators and the infrastructure around them. Education and fundamental research should be getting the big pay checks, not people playing games, playing make-believe on a movie screen, or pumping out music.
This inversion of value is endemic in our society, and we will not truly break out of the current cycle of economic crises until our values change. Period.
Just my thoughts – but they are, of course, correct. 🙂