A Most Ridiculous 'Recession'
Posted April 11th, 2008 by George Zens
Dear Reader,
Recession - definition according to the British weekly magazine The Economist: "Colloquially used to describe a period of slow or no economic growth or of contraction. (...) In the United States, 'recession' is officially defined as two consecutive quarters of falling GNP."
We (mainly the media, politicians and anyone else who likes to be listened to) are actually panicking about several things:
One, that people are consuming less (maybe) than they did a few months ago.
Two, that publicly traded companies don't fulfill the growth-expectations that financial jugglers had for them.
Three, that trees don't grow to heaven.
If the practical consequences of this economic nonsense weren't so tragic for many individuals and families who are losing their jobs, businesses and homes, it would be laughable.
Unfortunately, our economic system is a house of cards resting upon a foundation of unrealistic expectations set by financial speculators who don't hesitate to ruin companies for a quick profit.
Analysts ('anal' is part of 'analyst for a reason), investors, journalists and politicians stare at the stock markets' numbers like the rabbit at the snake, not realizing that it only takes a quick sideways jump to break loose from the suffocating grip that the financial markets have on our economy.
What we are experiencing now is not an economic crisis, but a ridiculous case of financial hyperventilation.
Yes, many financial institurions are in trouble, and rightly so. They got carried away by their own greed and now the chickens are coming home to roost. Unfortunately, this might very well end the way it usually does, with those being ultimately responsible for the mess being rewarded by golden parachutes and the taxpayers, small-scale mutual-funds investors and private homeowners being left to pay the bill.
The financial crisis, however, has nothing to do with people's everyday lives. We still eat, drink, sleep, work.
The population's needs haven't disappeared because some financial conjuring artists got tangled up in their own schemes.
The present situation does make one thing very clear, though: Our economic system is missing its purpose. Instead of the economy fulfilling the needs (and wants) of the people, it is the people who have to fulfill the needs (and wants) of the economy.
Hence the appeals by the authorities for the public to spend money, to consume.
The economy has to grow, at any cost.
Growth has become the economic idol to such an extent that it is good enough even if it exists only on paper. Which, by the way, is exactly, what this 'recession' is: a paper recession. Any 'value' that has been 'lost' has been lost on paper only - well, on circuitboards, really.
This economic panic-attack could be useful, if we cared to learn from it.
It could show us that we need to refocus our economic priorities towards fulfilling the real needs of the population, and that our financial markets need to find back to their original role: supply capital when it is needed.
But as long as we treat the economic and financial indicators as ends in themselves, instead of as mere instruments, we'll keep getting off track.
We should look at the road from time to time instead of only staring at the speedometer.
