Tuesday, November 18, 2008

Upside to Downsizing

It's not exactly true that the economy is like the stock market -- all about emotion. Other people are buying, so I'll buy. They're selling, so I'd better sell. True, we hear so much about the bad economy that we might hold off on some purchase, but that's not really the herd mentality at play on Wall Street. I suppose it really comes down to jobs. Unemployment tends to focus the mind, and buying more crap doesn't seem all that prudent, when food becomes a problem. Clothes aren't optional, but new clothes are. The latest gadget, sound system, whatever it is the kids care about nowadays -- the old one will do.

All that is obvious and elementary. So consider the root of the problem. The economy grew because people were buying more. Alas, they bought with imaginary money. Credit cards. Which generally tend to require repayment, at high interest. Spending money you don't have to buy stuff you don't need -- a consumer, indeed. Like fire. Like locusts. We are currently enjoying the time when the debt should be paid. Money that used to go to buying more crap, now goes to paying debt, and living. Theoretically, anyway.

This is a bad thing? It's a grasshopper-ant thing. Odd how we forget sometimes those very earliest lessons. Perhaps it's because morality is generally out of fashion. It's just that it hurts, when the bill comes due. And when it comes with a surcharge, say, of unemployment, then it really hurts.

But consider China. We sneeze, China catches cold. No longer the Great Economic Dragon, it seems. If we don't buy, China doesn't sell, and we're the only thing that has been sustaining the corrupt Chinese mongrel government, Communist in name only, authoritarian and power hungry. It has remained in power since the late seventies only because of an average annual economic growth of ten percent. Why, if you grew ten percent for thirty years, I bet you'd weigh 200 pounds! Something huge like that! Well, maybe my math is a little off. But you see the point. China is in worse shape than we are, by far. We don't have to buy China's crap. They do have to sell it.

And you may have noticed that gas prices are lower than a few months ago. We dropped 15 cents a gallon last week. Down to about $2.35 in my corner of paradise. It was four and a half buck not too long ago. Half price. What changed? Is there more gas? Well, the story is that demand is down. Good. The bad thing is that the giant stupid American pseudo cars the fools call SUVs sit on the showroom floors waiting to be dusted. That's sort of a bad thing, since car sales are a big part of the economy. On the other hand, don't build garbage. And you, foolish consumer -- don't buy garbage. It drives up gas prices, which is bad for me. Now US demand is down, so prices have halved. So we're told.

And third world demand is down -- an even bigger factor I should think. All those upwardly mobile Chinese with their tiny cars demanding gas -- no so much right now. Even sweeter than lower prices is the agony that the toad in Venezuela and the visionary in Iran and the Tsar in Russia and the slave traders in Arabia are currently enjoying. Good. Suffer. A little less money for them to spend on underwriting terrorism and similar mischiefs.

And so it goes. Stalin really was right when he observed that a single death is a tragedy and a million are a statistic. He took the long view. These monstrous dictators do have some insight into the human condition. The Chinese politburo have understood bread and circus -- the corrupt deal of we'll give you prosperity, you give us power. They're reneging. The last time that happened there was a little demonstration in Tienanmen Square. Why, was that 20 years ago? How time flies. A new generation -- how ever will they respond to the current economic stress? Blogging?

Yep. The grandparents knew what they were about. Cash or check -- no credit. The current contraction, constriction, of our funds is a demonstration of their wisdom. The downside is that we have to wait to have the thing we want, and the economy grows more slowly, and the rich don't get richer at quite such a frantic rate. Somehow this doesn't seem like a tragedy to me. What seems tragic is not learning from stupid mistakes, but rather repeating them until utter catastrophe over takes you.

But we're not that foolish now, are we. Most of us aren't. I say this of course in my role as Stalin, taking the long view, disregarding individual suffering, looking at dialectical trends. Far be it from me to bring my own personal details into such a discussion. What is pain after all, but the flip side of pleasure. It all averages out, when you spread it around across all of humanity over all of time.


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