EconomistMom.com is a new blog, started last month, and I've been following it since then. The author is an experienced economist, with years of experience in and around the centers of economic power. I'm not precisely sure which way she leans; she currently works for the Concord Coalition, which is a group primarily focused on budget balancing and deficit reduction. I'm not absolutely convinced that those should be our highest priorities right now, but it would certainly be nice to see the trend moving in the right direction, which it isn't. The blog is engagingly written, delightfully personal, and close to math-free (I don't mind some, but I've read that even the hint of an equation hurts readership; don't shy away from this one because of an occasional graph).
At any rate, I'm always inordinately pleased when someone "official" seems to understand what the vast populace is seeing, because I'm not at all convinced that the ivory tower academics, the marble-halled politicians, the plush-carpeted executives, or the ink-stained media come close enough to the real world to get the very real nervousness experienced by those of us without tenure or a big bank account. The level of risk that has been thrust upon the bottom 90% over the past 20 years or so, with little in the way of reward or potential for reward, is felt, but it's not discerned at all by the opinion-makers.
So I'm probably a little happier than I should be when some of the anxiety actually filters up to the elite. We who've been writing about such things aren't really helped by the occasional light than dawns on the big folks; nevertheless, when a "real" economist sees what we see, it's gratifying far beyond any potential real effect.
Therefore, I "enjoyed" reading Why We're So Gloomy, which pivots off a Washington Post piece that offers the standard, everything-is-OK, it's-probably-just-that-negative-media spin on why consumer confidence is so low. EconomistMom takes a different tack, believing that we may well feel the way we do because "much of what we’re seeing in the short-run economy is symptomatic of longer-run challenges that aren’t going to go away within the next few months or even years."
Gas won't go back down, home prices will not rise quickly enough to allow us to use our equity as we planned, health care prices keep going up and up, layoffs will continue -
In a way that transcends simple lack of confidence, I believe Americans are getting some sense as to how their children are likely to live, the extent to which our leaders have neglected so many issues for so long that weaknesses have emerged in the very system. Can they be fixed? It's not clear that the remedy isn't just about as bad as the illness, and the perfect storm of problems has coincided with one of the most negligent governments in our history. I've said before that I see disruptions coming to our way of life that will not yield to simple solutions, that we need to reconcile ourselves to a somewhat lesser life than we anticipated. It doesn't have to be a catastrophe, we don't have to buy into a James Howard Kunstler-esque view (though that is within the realm of possibility), but our casual abundance will be, simply, less than it is. I'd rather see us prepare for that than to insist that magic will happen, that we can continue on our same path. It's good to know that others are beginning to see this too.
At any rate, I'm always inordinately pleased when someone "official" seems to understand what the vast populace is seeing, because I'm not at all convinced that the ivory tower academics, the marble-halled politicians, the plush-carpeted executives, or the ink-stained media come close enough to the real world to get the very real nervousness experienced by those of us without tenure or a big bank account. The level of risk that has been thrust upon the bottom 90% over the past 20 years or so, with little in the way of reward or potential for reward, is felt, but it's not discerned at all by the opinion-makers.
So I'm probably a little happier than I should be when some of the anxiety actually filters up to the elite. We who've been writing about such things aren't really helped by the occasional light than dawns on the big folks; nevertheless, when a "real" economist sees what we see, it's gratifying far beyond any potential real effect.
Therefore, I "enjoyed" reading Why We're So Gloomy, which pivots off a Washington Post piece that offers the standard, everything-is-OK, it's-probably-just-that-negative-media spin on why consumer confidence is so low. EconomistMom takes a different tack, believing that we may well feel the way we do because "much of what we’re seeing in the short-run economy is symptomatic of longer-run challenges that aren’t going to go away within the next few months or even years."
Gas won't go back down, home prices will not rise quickly enough to allow us to use our equity as we planned, health care prices keep going up and up, layoffs will continue -
I think there is this feeling of much more permanent unsustainability that we are seeing repeatedly in our daily economy–little doses of daily evidence that we have been living beyond our means.While the post ends with the feeling that our national will may be able to counteract some of these large, long-term trends, and I think it minimizes the very real concerns about jobs and how education fits into career paths, it is on the whole, I think, dead on.
In a way that transcends simple lack of confidence, I believe Americans are getting some sense as to how their children are likely to live, the extent to which our leaders have neglected so many issues for so long that weaknesses have emerged in the very system. Can they be fixed? It's not clear that the remedy isn't just about as bad as the illness, and the perfect storm of problems has coincided with one of the most negligent governments in our history. I've said before that I see disruptions coming to our way of life that will not yield to simple solutions, that we need to reconcile ourselves to a somewhat lesser life than we anticipated. It doesn't have to be a catastrophe, we don't have to buy into a James Howard Kunstler-esque view (though that is within the realm of possibility), but our casual abundance will be, simply, less than it is. I'd rather see us prepare for that than to insist that magic will happen, that we can continue on our same path. It's good to know that others are beginning to see this too.
2 comments:
We've been living beyond our means throughout the last decade (or two), culminating in a negative savings rate and huge federal spending deficits, so yeah, like economists like to say: the unsustainable ends eventually. Factoring out the new advances in medical care, mostly in pharma, lowers both costs and quality of life, but there will be a massive nursing shortage. Time for skilled labor immigration? Don't tell Carrie!
I am probably in a minority saying things are going well for me as compared to my parents. I do believe there's a "dual income trap" that didn't exist in my parents' era, but my response is to live far below my means. Communities that require a lot of gasoline are suffering, and there will be changes. I don't understand her statements such as "as we fill up our gas tasks each day..." but I know vast swaths of this nation built their civilization on the stuff, and they are suffering. I ride a bicycle. I live in an environment where that's viable. So I fill my gas tank each month or so. I'm not sure what people expected from home prices when the historical trend is 1% since the Great Depression. We all rode a bubble, and of course that's not sustainable. But I'm not convinced things are so different in this era. In the end, how useful and accurate an indicator is "gloom"? Mondale asked in his campaign, "So we'll all flip burgers?" and it didn't turn out that way. A willingness to adjust to market conditions, work hard, retrain, and save liberally for the future will probably continue to result in sustainable first-world standards of living.
Let's put it another way: Monofuel dependency, deficit spending, credit card abuse, home equity reliance, a meat-heavy diet, and a hope that nothing will ever change: WAS IT EVER A GREAT IDEA?
And so we begin to see a kind of convergence in our thinking, mcfnord. For all that some might accuse me of peddling gloom, my primary contention is not that we are in a "malaise," but in a state of denial. We're refusing to accept the reality of our future, and, in our belief that the way we live is the acme of progress, we'll be very disappointed.
mcfnord, we should absolutely do all the things you're talking about, though I continue to believe there are structural problems with some of your remedies (retraining is too easily passed off as just another economic transaction, whereas I believe it to be a major relationship change - far more wrenching - but probably necessary).
And those things you correctly point out as weaknesses in our way of living are, unfortunately, perceived by many as among our strengths. When a president tells us to spend our way out of our national trauma surrounding 9/11, it is no wonder we see spending psychosis. Stability has become the goal for many, rather than the flexibility to ride and enjoy change (but I do think we as a nation are rather glib about the potential negative effects of change).
You say that we can continue "in sustainable first-world standards of living." I'm not sure exactly what that will mean, especially if the trends toward income and wealth inequality increase, but I do know that that will represent a major shock to a country that expects excessive, luxurious first-world standards of living. It is true that not everyone needs a big-screen TV, but everyone thinks they do, and the change in mental frame that is needed will be wrenching in a nation that sees those things, things that are unfathomable to the vast majority of the world's population, as absolute necessities.
One quibble: we're talking about vast long-term trends here, and, while I'm no apologist for Walter Mondale, that we aren't all flipping burgers yet does not entirely invalidate the statement (not that I believe that we all will be, either, just that we haven't played it out long enough to determine anything).
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