Our relationship to "the economy" amounts to the same thing. For a while it seemed to be one long Superbowl, - our perception of the market was driven only by our knowledge of gain, but that could not continue. The game does not last for ten consecutive seasons. The risks were always there. Likewise our country is still earning trillions of dollars for its goods and services, just as it did a few years ago, but now we perceive only the risk. In our relation to the economy we are driven by our most primal motivators - hunger and fear. We have traditionally associated football with the most primitive in us and the economy with sophistication but maybe its really the other way around. Ultimately, it is not just the economy that has to turn around, it is us. We are going to have to re-learn our sense of possibility for investors to perceive secure structures when they see markets and banks to perceive earners where they now perceive only risks for foreclosure. However, acquiring knowledge takes time and the brain has to perceive actual changes in its environment to learn new things. That means that substantive changes in how markets run and how, buyers, lenders, and sellers are regulated will have to occur if the economy is to turn around. The government can't simply pour our money into corrupt institutions without requiring any changes, while buying our silence with tax cuts, we're not that stupid. Individuals and businesses were already pouring money into the same markets for years - that's what produced this mess. Now we see bottom-up the rampant greed that has been the result of deregulation where before our top-down processes had led us to perceive only the gains. The solution is not simply spending money, but a process of filling us with new knowledge so that what we perceive has fresh meaning for us.
Monday, February 2, 2009
The Superbowl bringing out the sophisticated in us, and what that tells us about the economy
Our relationship to "the economy" amounts to the same thing. For a while it seemed to be one long Superbowl, - our perception of the market was driven only by our knowledge of gain, but that could not continue. The game does not last for ten consecutive seasons. The risks were always there. Likewise our country is still earning trillions of dollars for its goods and services, just as it did a few years ago, but now we perceive only the risk. In our relation to the economy we are driven by our most primal motivators - hunger and fear. We have traditionally associated football with the most primitive in us and the economy with sophistication but maybe its really the other way around. Ultimately, it is not just the economy that has to turn around, it is us. We are going to have to re-learn our sense of possibility for investors to perceive secure structures when they see markets and banks to perceive earners where they now perceive only risks for foreclosure. However, acquiring knowledge takes time and the brain has to perceive actual changes in its environment to learn new things. That means that substantive changes in how markets run and how, buyers, lenders, and sellers are regulated will have to occur if the economy is to turn around. The government can't simply pour our money into corrupt institutions without requiring any changes, while buying our silence with tax cuts, we're not that stupid. Individuals and businesses were already pouring money into the same markets for years - that's what produced this mess. Now we see bottom-up the rampant greed that has been the result of deregulation where before our top-down processes had led us to perceive only the gains. The solution is not simply spending money, but a process of filling us with new knowledge so that what we perceive has fresh meaning for us.
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2 comments:
Did you hear about this:
http://news.bbc.co.uk/2/hi/entertainment/7864733.stm
No wardrobe malfunction this time.
The superbowl mystifies me too by the way, but then again I'm British.
Wow - yes, I think you've definitely cut through to the heart of things here. The success of the economy is, somewhat surprisingly, based entirely on our perceptions and our trust. Until we perceive that we can trust our financial institutions again, the economy will continue to struggle which kind of puts us in a bit of a catch-22 since we will hesitate to trust it until it starts working again, but it can't really start working again until we trust it. And I agree, throwing money at various aspects of the problem is probably not going to produce the outcomes we're all hoping for. Great post.
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