Economics and Humanity

My ramble for the day...

It seems to me that one of the main premises of economics is figuring out how to make the pie as large as possible, thereby giving everyone the largest piece possible.  The fundamental problem with this idea is that people behave in an unpredictable manner.  Specifically, some people are selfish, taking whatever they can and screwing everyone else, and some people are exceedingly altruistic, placing the wants and needs of others first.

These opposite ends of the scale bring disastrous results on an aggregate scale, economically speaking.  Greed, when allowed to flourish unchecked, brings satisfaction to a select few, but despair and suffering to the masses.  We only need to look at the early days of the industrial revolution to illustrate my point.  Altruism, when taken to the same extreme, breeds laziness.  After all, why should someone work for less than they can make on a welfare check?

Somehow, in our unending quest to find a satisfactory balance, we've allowed both specters to flourish.

Bank and (Mis)Trust

I was listening to the radio a bit ago and heard a commercial for a bank "...blah blah blah Bank and Trust blah blah blah..."

I thought How is it that the phrase Bank and Trust still exists in the English language?  Didn't "Banks" and "Trust" part ways several decades ago??

Recession Resistant

Call me a fortunate son. My last job was as an IT specialist at a manufacturing plant. This company never made much of a profit, even under the best of circumstances... that's the rub of working in a commodity-based business. Their biggest profits were all accounting-based profits... when the price of their raw materials went up, their net worth increased accordingly. Well, now the prices are dropping like a rock. And furthermore, their products are heavily tied to the automotive and housing industries, and we all know how these areas are doing. In other words, I got out just in the nick of time.

Now that the recession is really building a head of steam, I'm even more pleased to be out of there. I'm doing semi-freelance IT work for some very recession-resistant businesses -- doctors, dentists and attorneys. I'm making a much better hourly rate than I made before, I'm working fewer hours, and no night/weekend emergencies. Yeah, I still work the occasional evening or weekend, but it's at my convenience, and it's from home.

To make matters better, my wife's job is also recession-resistant.

And have you noticed the gas prices lately? Man, it's absolutely cool! I filled up my truck's tank yesterday at $1.95 per gallon. To put this in perspective, I drove by a gas station this morning that was closed due to the flood, and it had the price being charged just before the flood... $3.85 per gallon! The price has dropped almost two dollars per gallon in five months. With the price falling that far, that fast, other commodities such as food, plastic, rubber and other petroleum-based products should also drop soon. This would definitely help us recover from our current mess.

It's not all pretty though... my 401k has lost about 50% of its peak value in the last 18 months. Oh well... I guess I had to suffer somewhere, right?

Call Me Nero

Based on my last couple of posts, you've probably noticed that I'm paying attention to what's going on in the world around me. Bush is finally on his way out, meaning that one way or another things are going to change. Okay, I really don't believe that. I think that Democrats and Republicans are cut from the same cloth... they're just different sides of the same itchy, chafing piece of burlap.

While this happens, the global economy is collapsing before our eyes. Trillions of dollars (a sum of money I really can't put my little brain around) have evaporated... literally disappeared. My own retirement fund has lost 1/3 of its value in the last year. The press is calling this the worst crisis since the Great Depression, and I can't disagree with them.

With all of this happening around me, I have occasionally seen myself start to worry about the future... wondering how I'm going to get through this... how my wife will get through this... how it will impact my kids. I witness Wall Street's nosedive and think that each additional day of declines is another year or two that I'll have to work... a sacrifice I will have to make but can't quantify, because it's in the future. It would be easy to work myself into hysteria.

But I'm not going to do that. I have enough. I have enough for today. I have a wonderful wife, awesome kids, great friends and a kick-ass life. I can plan for tomorrow... for a decade from now, but I can't account for every contingency. And the more I try, the less I can enjoy today.

Besides, the money that's evaporating never really existed anyway. It's not real currency, it's money on paper. This type of currency doesn't really exist until you cash out. Furthermore, it's time to bring things back into perspective. We, as a country, haven't really suffered since WWII. During the Great Depression and WWII, we had to band together and do without in order to survive. Since then, yeah, a few have suffered, but for the most part we've lived a cush life. The baby boomers don't know what it's like to scrimp and save. They're selfish, which is a huge reason that our biggest problems -- such as Social Security -- have been put off and put off.

Now it's time to pay the piper. And I'm ready. That's right. I acknowledge that I haven't suffered. Life's been good to me so far, but I'm smart enough to know that things can't continue this way without the shit hitting the fan. The longer we put things off, the more shit... the bigger the fan... and the bigger the splatter. I say bring it on now. Unlike the Baby Boomers, who are unable or unwilling to deal with crisis, I am ready, willing and able to tackle our problems head-on, so my kids don't have to.

So, while our economy goes up in flames, I'm not going to scream and run in fear; I'm going to say "Pass the marshmallows."