Tuesday, October 14, 2008
Painting by Grandma Moses
What Mrs. Bartlett Said Last Year About the Economy
Annie commented on the last post, bringing up several good points on how to stabilize our economy. I found her third point most intriguing. She said:
"A new economic engine must be found to replace the endlessly expanding consumer spending by Americans which has driven the world economy over the last 25 years. Americans must learn to save and conserve energy. Capital investment and job creation could focus on development of 'green' energy instead of endless consumer spending."
This reminded me of what Mrs. Bartlett, in commenting on another post last year, had to say. I believe these two ladies ideas overlap, or complement each other well. Thanks to both of them. Here are Mrs. Bartlett's thoughts from January 2007 (and were they ever prophetic!):
"I'm just writing off-the-cuff, so if I'm mistaken and someone else understands economics better than I, please feel free to contradict!
An economy is not an entity or a purpose to itself. It is an abstraction, a sort of system that exists purely to serve the needs of a given populace. It is "good" or "bad" based on what the populace requires--not based on some theory that has a certain goal in mind. WE do not fit it; IT fits us. That's what I see, so you know my perspective.
Now for your question itself. "Staying true to our Biblical principles" and "being good stewards of the Lord's creation," as you so aptly put it, IS the best method to have a solid economy.
Firstly, if we do not spend more than we make--or if we must borrow, only borrow what we can afford to repay--then we do not place ourselves at risk of defaulting on our obligations. It is the default that causes our credit-card interest rates to be nearly 30%, and taxes the legal system (and the welfare system). To be honorable, to give "credit where credit is due," is a tremendous boost. What we see now is an artificial inflation of our economy, of people buying more than they can afford, and it will crash when those spenders find they can't make their payments.
Another thing we can do is to STAY AT HOME. As we women push ourselves into the workforce--especially at the expense of more qualified men, thanks to affirmative action--we cause a "glut" on the market. It becomes an employer's market; we have to compete to get the jobs. If we stay home and let the men do the job-getting, not only would unemployment diminish drastically, but it would shift to an employee's market--the competition would become the employers trying to attract employees, meaning higher wages for them. Theoretically, of course.
If we were to decrease consumption, by doing for ourselves, we would cause a tremendous increase in the "raw materials" market, shifting away from the "ready-to-go" market. Companies would adjust to the change; some might diminish and go out of business, but others would increase and take up the slack.
Gas prices would come down. Yes, they would. Our demand for oil would diminish radically if half of the cars buzzing about simply stopped doing so--and the choke hold OPEC has on us would have to be loosened.
Health care prices would drop off drastically. With fresh food being prepared, with a mind to the health of the family as opposed to "Make the food taste better than the competition's," many of today's health problems would be quickly eliminated. Insurance costs would drop off, and more families could afford it--taking further burden off of the government.
And if we stay home, we have more spare time to dedicate to our neighbors. We would be able to anticipate someone's need and take care of it ourselves, rather than letting government shoulder it. Lower taxes would result.
That's just what I've got.
I had always puzzled over the seemingly given "wisdom" that in order to have a thriving economy, we must constantly consume goods and services. When the president told us in the aftermath of 9/11 that we could be patriotic by going shopping, I kind of understood where he was coming from, but something about it didn't seem right. Our parents and grandparents had always handed down to us the admonishment to have a savings and to try to do things for ourselves if possible, instead of going out and buying the thing or service.
Too bad we didn't buy into that philosophy, instead of allowing ourselves to be sold a bill of goods.