Monday, March 30, 2009
The New Economy
When I was a child I never quite believed that tunnels had openings at the other end. It takes to this day a real act of faith to venture into tunnels that are long or go under water or are totally unfamiliar to me.
Watching yet another Sunday talk show on the economy yesterday it struck me that this dark recession is a tunnel and that the economists haven't a clue about where the end is or what the other side will look like.
They keep relying of phrases like "our economy will be stronger than before" or "we have some models of what has not worked" and "where FDR went wrong." But the one question they all tap dance around is what this new stronger economy will look like? One thing becomes increasingly clear is that it will not look like it did before.
The robber barons of the new century have proven that we cannot let them drive the train. The Republicans chant that to not let the capitalists drive is to have a socialistic country. Wake up we already do. When any government owns 90% of the leading economic factor (banks in this case - trains in England a while back) they are socialistic. We would like to pretend it is temporary. But if the G8 in the world are too big to fail then life support is called for.
We want to all to pretend that life support, be it in a hospital for a loved one or the economy for the country we live in, is temporary. But let us be honest here. If we are being constantly gouged by the utility companies wouldn't regulation be nice on pricing in the midst of winter. A cap? And if gasoline prices rise to the point that Exxon is making insane profits and nobody has the money to fill their tank to drive to work? Or the airlines have so totally cornered the transportation market that there are no light rails to fill in for routine commutes or freight when another 9/11 grounds all air traffic?
What seems to be different in the recession/depression is the population is not merely angry with the banks like AIG, but they are pissed at Parker Bros for lead based paint on toys they no longer make but only import. We don't want to go Vista whether Bill Gates says it is the best or not. We don't want to talk to someone in Pakistan about a technical problem. And we definitely distrust Exxon and any product produced in China. And food producers because of artificial protein and raised prices they will not lower. And what we think of credit cards cannot be gone into here.
Even if suddenly we had available credit and excess money in our budgets there is a question about whether we will even spend it. One of the reasons they have not given us one of those tax rebates to stimulate the economy. It is believed we would just save it.
So what will the new economy - the other end of the tunnel - look like. I think it is safe to say nothing like what we left behind when we went where no country or global economy has gone before.
Anyone have any thoughts on this?