January 25, 2008: Yay! Let's Have a Recession!
I'm not alone in thinking that economics is largely psychology. Neurotic and idiosyncratic forces determine the nigh-arbitrary values of our goods and services, dependent often on our faith for any agreed worth. Prices go up and down mostly based upon perceptions affected by a million things, only a few of which hint at any illusory "real" value.
There's nothing wrong with that, but few people realize just how those perceptions affect our economy--how much we imagine and instantiate our financial condition.
Lately, we seem to have decided it is time for a recession. To that I say it's high time.
- Recessions give us cause to reflect upon what we're doing, how it profits us and others, and whether it is really valuable.
- Every job I've ever lost to downsizing or going out of business has been a worthless sham. True, most of the ones I haven't lost are also worthless shams, but they've had the benefit of a bull market to hide just how worthless.
- Recessions inspire cleverness and the more careful allocation of resources.
If what you own or sell loses value because of a recession, that item never had the value you believed in the first place. You were lucky to enjoy the ebullience of a reckless market flush with money to spend on silliness.
I know quite personally how it sucks to lose a job or money in the stock market. Yet I've never been destroyed by either, and in the longer perspective, I've profited from both.
If we can imagine ourselves into a recession, surely we can imagine the good reasons to take such a pause to consider our real values, both economic and personal.
