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Post details: Stating the Obvious

Stating the Obvious

Economics has flourished into a subject of such complexity that beating around the bushes is becoming the norm for economic reporting. No one sees where the point is any more, partly because it is not clear whether the globalized economy has one, and partly because if it has, it is drowned in reams of opaque technicalities. Sometimes I wish articles were written by farmers whose down to earth approach would instill some lucidity into the financial double speak.

Last week's TIME innocently asked: "Is there something fundamentally broken in the heart of our economy?" But if you expected straight answers you'd be barking up the wrong tree. The article rambled on and on and in the end you couldn't really figure out what exactly was wrong. As if connecting the dots was beyond the investigative budget of a premiere magazine. Points that should have been clearly stated were hidden in subtle innuendos and barely perceptible hints that had to be extracted from the narrow space between the lines by repeated dipping in caustic soda.

Instead of four pages of circuitous arguments and meaningless anecdotes, all I really wanted to see were four simple points.

1. We need to live within our means.

Debt is a good short term buffer that smooths out the vagaries of restless capital, but it cannot be used to bring about prosperity. You don't see individual people getting rich by ordering new credit cards, right? On a national level it may work for a while, because you can always print oodles of new money, but at the end this is just a transfer of wealth (a.k.a. theft) from people who live within their means to people who don't. It creates nothing of actual value.

2. Paper pushing is not a sound basis for sustainable growth.

Community is rich if it produces something that other communities want. Creating elaborate pyramid schemes eventually leads to the point of implosion, one way or another. The bloated financial sector not only drains resources from the rest of the economy, but it also depletes the natural brain supply, not to mention the forests sacrificed on the altar of progress by its voluble clergy. Ever read a prospectus from your mutual fund?

3. Science and engineering should not carry a stigma.

When I taught Math at a college a few years ago, I noticed that there is a prevailing negative attitude toward sciences and toward logical thinking in general, both among students and administrators. I have nothing against arts and practical skills, but the only way out of the current mega-recession is through innovative use of technology. We cannot compete with China and India knocking off cheap shoes. We need our best minds engaging their neurons in engineering and applied sciences.

4. The reward system is completely out of whack.

Not so long ago there was a commuter plane crash near Buffalo, NY, and the subsequent investigation revealed that starting first officers typically earn around $24,000. Pilots who hold in their hands lives of hundreds of people do not make much more. Compare that to roughly $50 million that Angelo Mozillo pocketed for steering his subprime banking airplane (called Countrywide Inc.) literally into the ground. That cannot be right. But it won't get any righter as long as the science teachers, who prepare our next generation for the challenges of the future, make 100 times less money than Wall Street bozos, whose main positive contribution to the society is destabilization of the financial system that we all rely on.

I hope that the almighty financiers will don their vampire costumes this Halloween as a subtle reminder that they rigged the capitalist system to satisfy their bloodsucking needs rather than the needs of the withering economy.


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