Worldview Item of the Day
Times are tough. Whether or not one agrees as to when the American economy entered a recession, it more than likely has entered one and will continue to be in one for the next several months. By most accounts, this will be the fifth recession I will have, God willing, lived through so far. If history is any indicator, I can expect to live through several more during my lifetime.
One of the things that strikes me about the current economic downturn is how much of it is about the well-being of individuals and groups whose economic health has been in question for quite some time. A quick check of Google’s News archive shows that there have been open questions about the subprime lending debacle as far back as 2002. The mega-banks have been in trouble since the moment they first decided they could do it all back in 1994. I cannot recall a time in my lifetime that America’s big three automakers have not been in trouble.
Underlying these weaknesses in the economy is a huge personal debt load carried by many individual Americans, something I found articles about from as long ago as 1982 (thanks to Time for uploading your content from back then). All of this is capped by the effective negative savings rate of most Americans since at least 2006.
I think all of these indicators reveal how much of the current recession is about personal responsibility. Frankly, I think most recessions, even the Depression, reveal an ugly side to free-market capitalism: we all want to squeeze the last drop out of our personal economies without there being consequences after that last drop is gone. As a result, the free market, which effectively regulates itself by the very kinds of means we are now experiencing, forces the consequences to happen.
I understand that there are many people who are struggling right now. I also understand that quite a few of them are people who did not have to be in the positions they are in. No one forced people to buy houses they could not afford to pay for. No one forced people to invest in securities that even most investment experts did not understand. No one forced people to do business with banks whose practices made them risks for failure. No one forced people to continue to work for an industry whose long-term health and stability has been in doubt since the first time it was bailed out by the government in the 1980s.
Further, no one forced Americans to spend until they owned so much money they were not saving any. Every one of these instances represent choices that individuals and groups made, whether or not they understood the risks. Now, these choices represent consequences that we all have to face whether we want to or not.
One of the defining features of the Depression generation was their individual ethic. I am sure we all have stories about the frugality and ingenuity of our relatives from that generation. That frugality and ingenuity has, as far as I can tell, ceased to exist in the current era. Instead, it seems like a whole bunch of people who made mistakes suddenly want to blame everyone else but themselves for the mess they created.
So, sure, times are tough, but they are tough because we allowed them to be by allowing the conditions to exist that created the risk of recession. Times will continue to be tough for a while yet because we are not willing to make the sacrifices necessary to ensure the economy gets back on its feet more quickly. However long this recession lasts, and whenever it began, the lesson we should all take away from it is that we do not have to be part of the next one.