economics 101

Itís the End of the World! Oh, Wait, Itís Just the Economy
By Al Berrios

It's just a little rain...
(Wordcount: 604; Pages: 2) The stock market is going bonkers. Your neighbor just lost his house! Your gas, electric bill, and Coca-cola are double what they were just 5 years ago!! And a bunch of people at your job just got laid off!!! What the heck is going on out there?!  In a crisis situation, first thing you need to do is calm down and assess:

Fact 1: You are not an economist, so what exactly are you worried about?  In fact, it’s practically a religious belief in Washington D.C. that you – Mr. and Mrs. Voter – couldn’t understand the economy even if it was drawn in a coloring book for you. (At a October 2004 conference I attended, Robert Rubin, former Treasury Secretary under Bill Clinton and the Democratic party’s economic policy guru, claimed that the reason he always said, “No comment” when asked about the economy was because “Americans just wouldn’t understand.”)  Politicians know you find it boring, so they don’t talk to you about it as much as they should.  More importantly, everything economics says you should do, you don’t do anyway.  So, not only are you not an economist, you’re also irrational by economic standards.  Hence, whatever’s happening doesn’t affect you.

Fact 2: News reporters aren’t economists, so why are you listening to them?  They get paid to report, not understand how economic policy affects you.  And the only thing they report is bad news, because let’s face it, if they featured a nice, friendly, happy world, you wouldn’t watch the news. 

Fact 3: Politicians are not economists. In fact, they understand “the dismal science” even less than you do (since they don’t actually work for their money like you).  What they do understand is that it is an election year, so no matter how bad you hear it is, politicians want your vote bad enough to drain the U.S. Treasury just to give you some extra cash to “stimulate” you to spend.  Then “stimulate” you vote for them.

Fact 4: There’s nothing more “economic” than victimizing suckers and suing victimizers. If you’re on the verge of being kicked out of your rental or evicted from your home, you simply haven’t complained loud enough to the right politician, who’d consequently proceed to publicly embarrass your bank and threaten them with lawsuits for victimizing you. 

Fact 5: If you got laid off, let’s face it, your company was managed by a bunch of idiots and they probably did you a favor. If you know you’ve got expertise and experience, you’ll find a new job quickly.

Fact 6: Since before you were born, prices increase because costs increase. And costs increase because more people want more stuff (in economic lingo, this is the effects of “scarcity”).  There are only 2 ways to avoid this unavoidable economic fact: you could either vanish into thin air or wait for the rest of the population to vanish into thin air.  I’ll leave it up to you to figure out which one works best for you.

Fact 7: Recessions are tricky things; trained teams of Ph.D. economists couldn’t spot one without a reams of data – and only after letting it marinate a minimum of 6 months. What makes your boss, who can’t even read the reports you give him; your friend with the GED and PSP around his neck; or your 10-term politician, whose name you don’t know think they can spot it while it’s actually happening, based on what they heard from someone else?

After assessing the situation, it’s obvious that it’s business as usual out there. No need to panic; everything’s going to be just fine. 



Al Berrios is Managing Director of al berrios & co., a strategy innovation consultancy advising organizations on succeeding in a service and information economy. Write or Subscribe to Consumer Strategies Report.

 

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