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“Reluctance to Spend” This quote comes from an article in Newsweek arguing for a do-it-yourself economic recovery in the face of an incomplete government program. Counting on the market to offer enough incentives (t-shirts and smart phones) to sleeping consumers to get them back into the habit of buying with funds they do not have, the business sector is picked to be the best way out, sort of bootstrapping the recovery. Sounds good? Politically it appeals to the market champions. Economists love it, although many say this will not be enough to restart the growth dynamic.
Now think about this in the light of another recent article on Alternet that proclaims: “The Retirement Nightmare: Half of Americans Have Less Than $2,000 Banked for Their Golden Years.” I found this shocking, especially in the implication that more current consumption is good for all of us. All that these people will have to subsist on is social security, which was never intended to provide for the necessaries of life much less the new toys that these retirees are also being told to rush out and buy. I don’t have the demographic data at hand to do the numbers, but with our aging population trends, we are to become an deeply impoverished nation, by our current standards. I challenge any economist to rationalize this contradiction.
Other data show that many people are doing their own arithmetic and starting to reduce their debts, paying off mortgages and credits cards. The economic crunch seemed to have done what many thought it might–wake up the general public to that arithmetic reality that the piper would have to paid–sometime.
The real choice the typical consumer/citizen faces today is very tricky–an ipod today or a meal on the table after retirement. Or worse–no ipod today and a simpler meal than was eaten a few years ago as current income is used to pay down the debts that accumulated with easy credit and an incessant call to buy, buy, buy. . . .
The mathematical models that are used to set economic policy and to guide public and private investment and strategic choices do not incorporate the consequences of growth to all these people facing an uncertain future. Life may be OK for the affluent who can maintain a semblance, weak or strong, of their current lifestyle late in their years, but for increasing numbers the resultant polices are disastrous.
The situation is clearly unsustainable. I have been reading, with my class at Marlboro, about “progress without growth” and the idea of a steady-state economy. Neither connects well with the present world as the gulf between the policies and life styles today and a sustainable system is huge, and few bridges appear out of the murk of today’s cloudy future. Any realistic attempt to build such bridges to a sustainable future are absolutely bound to cause pain, severe pain to many. Our political leaders everywhere are not doing their job as leaders, only as politicians. The faster we are told the truth about the numbers, the quicker we can respond to minimize the pain. We simply cannot have jobs, today, iPods in our pockets, and food on the table when we retire (that is, if we have jobs to retire from). I count myself as lucky at my rather advanced age, not having to think about or make these choices. But I worry more and more about the choices my children and their children are facing.
I was exposed to the perils of the arithmetic of growth when I was about 10 years old, but did not appreciate it–no surprise–when I saw Fantasia, the first film I ever watched (in the cinema of course). Now with the magic of Youtube you can also watch it. Take about 10 minutes to watch this wonderful tale about growth and its consequences. No economists were involved.

One Reply to “The Sorcerer’s Apprentice”

  1. As someone with 25-years of experience as a financial executive I appreciate your conclusion that, some time very soon, we are going to have to pay the piper. Yet, the realized vision of a sustainable future, as you have pointed out on numerous occasions, will not look anything like things do now. The substantive sacrifice that you say is just around the corner for many of us is within the context of how we live now. Within a realized sustainable future context where bartering, communal living, subsistence farming, and community arts are commonplace, perhaps monetary assets will be unnecessary. Traditional economics not only misses the external costs of ecosystem depletion, it also misses the worth inherent in barter, time banks, altruism, communal subsistence, etc.

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