As bleak as this picture looks, it is basically unavoidable. A majority of economists agree that our government will have to take a Keynesian approach to clawing its way out of this depression. (Call it a recession if you want. At this point its merely semantics.) There is no way around the need to inject income into the economy by investing in infrastructure, focusing on job creation, and fixing such underlying problems as our disastrous health care system. Otherwise the next generation will be left with the fallout of a Great Depression AND saddled with serious debt.
You have to admit that the situation looks pretty bleak, especially with the massive job losses. Any recovery will be slow and painful, and it is going to require a great deal of patience and resilience. However, as someone who likes to try to find the silver linings beneath the blackest of clouds, I wonder about what good things might possibly emerge out of the beating we are taking as a society. I keep wishing there had been an easier way to go about it, but maybe we have learned some things. Could we be on the brink of a paradigm shift in the way we view several components of our world? Here are a few positive things I think might come out of this mess.
Changing business models
Could it be that while large corporations are dropping like flies, the little guys will make a resurgence? It is becoming increasingly clear that the world of huge conglomerates is not what it was once cracked up to be. Regulation was practically non-existent, and several CEOs ( a.k.a. Robber Barons) ran rampant with shareholder money. While this was occurring, quality suffered enormously. In the simplest of terms companies just became too large to be efficient. GM, for instance, just filed for bankruptcy and serves as an excellent example of a poor business model. It grew into an enormous corporation with poorly made, redundant cars until it simply fell apart at the seams.
What is GM doing to save itself? Its downsizing. It has promised to shed its unnecessary brands and become a leaner, meaner company. Unfortunately, this means greater job losses, but maybe this is something that had to happen in order for GM to sustain itself. These people are hurting, but maybe they will ultimately be better off if we can find something better for them than working for a company that could not make a profit because people no longer wanted to buy its crappy cars.
Here's an example of what I mean by a better business model. Think about Trader Joe's for a minute. Compared to other grocery chains, it is a tiny store. It offers a small selection of environmentally friendly, healthy products. Several items are from its own private label. If you have ever been to Trader Joe's, you know that its products are of superior quality. A few things are priced higher than other stores, but most are priced significantly lower. The company pays its employees generously, contributes to a retirement plan, and automatically offers health benefits to part-timers. The number of consumer choices offered is small, but what it lacks in variety, it more than makes up for in quality and great customer service. Did I mention that Trader Joe's has seen huge economic success? It's profits are not the largest in the business but enough to ensure plenty of wealth for its owners.
Perhaps in the future we will end up with more companies that follow the Trader Joe's model. Maybe it will become more difficult to find a store that offers a hundred varieties of wine, but we won't care because we will have happy, pleasant people selling us really delicious wine.
The end of supply-side economics
Maybe we will finally get it through our thick skulls that giving the bulk of the tax incentives to the very rich simply does not work. What has happened in recent years has clearly shown that economic health is not created from the top down. The rich became richer, the poor became poorer, and everything came crashing down. The only place where I have ever seen pure self-interest naturally resulting in loads of heroic rich people making everything peachy is in the fictional universe of Ayn Rand.
Regular people, the vast majority of consumers, are what power the economy. Regular people spend money. What is the point of tons of goods and services if a vast majority people have little money to spend on them? If our first priority is to concentrate on making regular people safe, healthy, employed, housed and able to care for their families, regular people will have money to spend and the economy will become healthy once again. Think of it as a form of long term self-interest. Working toward such goals will benefit everyone.
No more senseless wars
The wars in Afghanistan and Iraq and the "War against terrorism" are not only a major cause of our climbing deficit but have severely damaged this country. Scores of our bright, young people are dead. Our reputation around the world is severely tarnished. In some ways we have become what we were fighting against. The wars were the start or our spiral into an economic tailspin, and it was all for naught. Terrorism was always a problem and has actually become worse due to our invasion of other countries.
Maybe we will revert our earlier policy when we had to be dragged kicking and screaming into a fight. Maybe we will stop declaring war unless it is absolutely necessary for our defense or the defense of our close allies. If senseless casualties isn't a good enough reason, maybe economic collapse will be the incentive. What? It could happen.
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