Although my life is in most respects removed from the current financial crisis thus far (I still have a job, I don’t have a mortgage, I am not relying on my stock dividends to pay for my retirement in the next few years) I have taking more of an interest in the issue as friends, family, colleagues, and perfect strangers discuss their concerns on the subject and ask my opinion.
At first I wasn’t really sure. I am hesitant to throw my hat into any circle before I know exactly what it is the circle entails in terms of values. I am still uncertain and still lack all of the necessary macroeconomic expertise to understand the problem intellectually, but this is America after all, and even those with no knowledge whatsoever of a given subject are entitled to their opinions.
So here’s mine (or the pieces I’ve cobbled together thus far). My initial ideas about this whole mess stem from my reaction to a New York Times article I read yesterday. (click here to see what I’m talking about). The scene opens in Japan and the story unfolds of families who have weathered difficult economic times and adjusted accordingly. From Mrs. Takigasaki and her cottage soup solution to the high price of fresh vegetables to college student Risa Masaki who just wants “a humble life” and doesn’t indulge in expensive cosmetics or fashion, Japanese families, according to the story, have performed what Mr. Obama has been asking of all Americans since before his innauguration: Sacrifice. They don’t spend beyond their means. They save what they earn and prepare for harder times. Novel concept.
The attitude of the NYT article struck me and prompted me to write this reaction. The article speaks of a rising fear of deflation in the US: a downward spiral of price and wage driven deeper into the ground by people’s inability or unwillingness to spend money. I agree that we don’t want to fall too deeply into such a spiral. However, what disappointed me about the NYT article and about most of this conversation in general is people’s inability to think outside of the current economic system for solutions to the problem.
The tone of the article conveys the opinion that it would be almost morally wrong to find ourselves in a situation here similar to that in Japan. People should be spending. Our economy is based on growth, constant growth, and I feel that perhaps what this economic crisis has taught me is that maybe that economic model is just not working. (OK, macroeconomists and communist/socialist haters, have at me, this is your signal). I don’t exactly know what the new economic model would look like. I’m not an economist and my two economics classes in college certainly don’t qualify me to draft any sort of macroeconomic policy for the world. I guess all I’m saying is that maybe the solution could be found if we are willing to sacrifice a little more. Sacrifice not only in the sense of personal sacrifices that many Americans and others around the world have been forced to make because of hard times. But sacrifice in the sense of letting go a little of the principle that constant economic growth and consumption is the most practical model for our economy in the 21st century.
That’s my 2,000 VND (now worth about 12 cents US.)
