I'm told I've been mighty accurate in my estimations of the economy over the last five years
I've served on tax and economic outlook committees in the Idaho legislature. These days we are doing a lot of urgent predicting. Predicting a volatile economy though is
not the sort of thing that lends itself to strict formulas. In my
humble opinion, the world is too complex for formula economics. That, I
think, is why a lot of economists sound sort of odd right now, like
they are describing a different world than the one we all live in. I
think many are having trouble fitting all the factors into one
calculator.
I might put it this way: we have created a hollow economy, one built on
fiction, on money none of us have, money that is promised against debt
large enough to consume more wages than we may ever earn in a life
time. And that is just the personal debt. Medical expenses, balloon
mortgages, loans for new more fuel efficient
cars, home equity loans, and everything from groceries to nick knacks
stacking up on credit cards. The average person owes more than $10,000
in personal debt. That's the average. That means most Americans own
nothing, or that someone else owns most or all of what we live in, eat
off of or sleep on. It is a disturbing thought. Who owns it and can
they take it back?
As a nation we have waged two wars on trillions borrowed from other
nations. Dollars that a President and previous Congress pretended we
had to spend.
We have allowed American companies to manufacture everything elsewhere
or to sell us nothing but goods entirely made by other countries. Our
dollars flow out to buy little plastic plug-in fans that make rooms
smell like lilacs, accent tables and CD holders made for pennies by
children using whole forests of foreign trees. We pay dollars and
companies owned by shareholders on several continents earn the rest.
Our wages flow out of our communities for insurance premiums and every daily necessity, staying only in tiny portions for the
hamburger flipper, the bus driver, the nurse, the teacher, the shop
keeper. Local stores are shuttered and dark and their owners who once
slaved for a decent wage, work now for people they don't know and will
never meet, in a chain store selling goods from far, far away.
Our factories still stand there, and people who know how to run them
are still alive because much of this has happened in the past eight
years. We could fix this. Not by outlawing or taxing foreign imports
but by recreating a sense of pride in what we make and a sense that our
very survival depends on our buying what our communities produce.
Even our food now finds us from far, far away. We may grow carrots and
produce milk or beans or flour, but it leaves the state so we can buy
someone else's, paying then the cost of packaging, shipping, cooling
and storing it all when we really don't need to.
We have grown soft and dependent because it was profitable for Texas to
watch oil prices scrape the stratosphere now and then. Alternative
energy research has been underfunded by Washington or bought wholesale
by Mobil and Shell. We were allowed to become dependent on oil made by
other countries which long have known exactly how to gouge us just long
enough to start and then quell revolutions in fuel efficiency and
electric vehicles. We all know oil prices will again be at $4 a gallon,
but, by design, we don't know when.
And then there is how we let banks play dice with debt. With bad debt.
How we let a loan become a Las Vegas game worth 50 times anything
material that was ever attached to it. We let insurance companies and
investment firms pretend that one dollar was worth $50 and created
fifty trillion in fake value or "derivatives" that inflated everything
like a giant stay-puff marsh-mellow.
You know how a marsh-mellow turns into a weightless crisp black shell when it hits a flame?
Well, our economy is a crisp black shell and we are all sitting on the
surface of it. This is just my opinion, but I think we'd better start
filling it with something, making something to fill it with. We can, as
a nation. Not that long ago we did. And whatever we make will form a
lattice-like scaffold inside the burnt shell and the dollars we spend
to buy the things we make will be like the bricks that turn that
lattice scaffold into a solid place.
We can't wait for government help to come because there isn't quite
enough real money in the world economy to bring back the whole sticky
stay-puff that was our economy.
Things will get worse before they get better. And the stimulus will
keep state governments from raising taxes and may help us prepare to be
a bit more independent. But more important than that is that we have
the ability, each of us, to choose to buy what we make. And those of us
who are still doing OK can maybe think about what we can make that we
or someone else made in our communities, one time, not so long ago.
And then we'd better start making that thing like our lives depended on it.