There is no denying that we are in an economic crisis.  The only debate is whether this constitutes a recession or depression.  I’ll leave that for the economist and other academic navel gazers who add little to the GNP of the country.  

 

Politicians all around the world are rolling out stimulus packages, ala F.D. Roosevelt’s new deal.  Pour money into the economy in order to kick start spending and get the economic engine going again.  Oh yeah, just give us more of what got us into this mess in the first place.

 

This short term measure might get the economy going, but it fails to address the fundamental problem.  The problem is not economic.  The problem is social.  The problem is people.  Their expectations, their wants, their needs and their desires to have it all – no matter the cost. 

 

On one hand you have the greedy – who are most likely university trained MBA’s who want nothing more than to suck all of the money out of the hands of the consumer.  I remember sitting in meetings planning how the company I worked for could get “more wallet share from our customers”.  That didn’t mean giving them anything more valuable.  It was how to coerce them into spending more with us.

 

On the other hand you have the needy, who want it all, don’t want to work for it and want it now – no matter the cost or future consequences.  These are the people who will mortgage their future and the future of their children for the latest, greatest, biggest, better, best.  Keeping up with the Jones has taken on an entirely new meaning in this decade of opulence and decadence.  Does that new purchase really add to your life, or is it a show piece that will allow you to be viewed by your peers as having “made it”?

 

There are so many totally useless items out there that do little or nothing to add value to society, but to which marketers have convinced people that they need to have it to be “in”.  Then there is the segment who will make credit easily available, with no concern if that stupid consumer has the intelligence to manage their debt or the means to repay the debt.  Nope, lend the money, such them dry, keep them behind the eight ball and one pay cheque away from bankruptcy.  Yeah that is really the socially conscious thing to do. 

 

Unfortunately I have worked 18 of the last 21 years in an industry that is as guilty as any and there are people, very close and dear to me, who work in industries which exemplify our society’s focus the useless and willingness to over pay for items they do not need; can not afford; or provide no socially redeeming qualities.  But my frustration is coming to a boil and I can not keep these thoughts inside me any more.  I may be written off as too cynical, even naïve, simplistic or dubbed a raving lunatic. But I will be speak.  If I don’t I am no better than the problem I see.

 

So in the coming days  I will exam the current economic crisis and relate it to the underlying failings and weaknesses of humans that have directly contributed to our current crisis.

 

This will include a look at:

  - Telecommunication – what value does call waiting have?

  - Automotive – the pinnacle of wasted resources and spent dreams

  - Entertainment – why does anyone care who wore what at the Oscars, Grammys or to dinner?

  - How much is enough – is anybody really worth $12,000,000 dollars a year?

  - What role are politicians and governments playing?  It doesn’t matter what political stripe you have.

  - Where do we go from here?

Unless you are a hermit you have heard that the economy is in teetering .  Lending institutions in the United States are in trouble, the financial markets are melting down, investors are getting “nervous” (yeah right!) and the free market now needs government intervention to keep it from collapsing on the average person.  With the US markets in turmoil the world markets are feeling the ripples.  AND I know why!

 

Anyone who has taken an introductory University Economics and Psychology course will know the reasons for this melt down.  It comes down to two words:

 

1. Hedonism  - the doctrine that pleasure or happiness is the highest good.  And devotion to pleasure is a way of life

 

2. Greed - excessive or rapacious desire, especially for wealth or possessions.  (isn’t it ironic that the website I used for the definition brought up a “Future Shop” ad).

 

I have for many years been telling anyone who would listen, which usually meant friends during a beer induced rant, that we live in an all too consumer driven economy.  People have no sense of what is realistic.  Society has become far to hedonistic in its approach to living.  The pursuit of pleasure meant if people wanted something, they would get it now, no matter the cost or whether they had the money to afford it.  The big SUV, the big house, the fancy cloths, the shoes, the latest and greatest electronic gadgets were all purchased and usually on credit. 

 

Society lost the concept of restraint or living within their means.  “Don’t pay” events, “we’ll pay your first payment”, “No money – no problem” events allowed people to buy without consideration of having to pay for this crap.  They could get what ever they wanted or felt they needed to fit into the “in crowd”.  But why do we need bigger vehicles or that mansion?  Does anyone REALLY need an iPhone?  If yes, why? 

 

“Greed” applies to corporations who, driven by the profit motive, have introduced a plethora of products that serve no purpose other than to make an individual feel special.  And if that person couldn’t afford it, no problem!  They sold the “paper” to another company who would make exorbitant profits off the usury interest levels they charge the idiots who felt they needed something bigger, better or best. 

 

This of course drove demand, which created jobs, which created “wealth”, which created the desire to have more, better, bigger and the cycle continued.

 

As long as consumers could afford to make the interest payments then all was well.  But if there was a hick-up in the system and they got behind, then watch out. 

 

Corporations will fall back on the axiom that they never held a gun to anyone’s head to make them buy.  But that is a cop out.  Corporations have spent gobs of money on understanding what are the “triggers” that make people buy.  They create ads that make people feel they need an iPhone to be cool, or without the designer cloths they are worthless.  They do database compiling along with psychographic profiling to figure out exactly how to “increase their share of the consumer’s wallet”.  AND then spend billions on advertising to convince people that they need what it being sold.

 

And then there are the lending institutions that allowed consumers to borrow far beyond what they could afford to pay back.  These corporations seriously need to look at their motives.  Bank and finance executives for years have taken obscene bonuses, while the average person was collapsing under a growing crush of credit. 

 

Did these institution realize what they were doing to the common person?   If you answer no, then you are more naive than I ever give you credit for. 

 

Psychology 101 – people will pursue happiness (hedonism)

 

Economics 101 – people will seek to maximize their return on investment (greed). 

 

And remember, “there is a sucker born every minute”  and two who are willing to sell to them….

 

In simplest terms the current economic crisis was been created by people’s desire to have more then they can afford and corporation’s willingness to sell, or lend money, to people who cannot afford what they are buying. 

 

Once those who cannot afford to buy, cannot afford to pay, those who lend are left with huge problems.  They are holding the paper on a bunch of “stuff” that no one else can afford to buy.  So they tighten up on the lending. 

 

When the supply of money tightens up, then the hedonistic society cannot get the money to buy the “stuff, they really don’t need.  AND they may “turn back” that which they can not pay for.

 

The supply of “stuff” (houses, fancy cars, electronic, etc)  increases and the value of those goods decreases, manufactures stop producing “stuff” because the market (of idiots willing to buy) has dried up. 

 

The domino effect takes over and the system collapses on itself.  All because of hedonism and greed.  

 

Unfortunately my cynical self does not see a solution in the future.  The memory of society is very short and soon those hedonistic people (the suckers) will be buying again and the cycle will start all over again. 

 

Oh, and in this situation there are also the maggots who will seek to profit from the collapse.  The auction houses, the repossession companies, the CEOs of major lending institutions who will get billions in government handouts to protect those obscene bonuses they paid themselves.

 

Take it from a cynical realist – we are in trouble and we only have ourselves to blame for our troubles.  Every one of us is either a consumer or someone trying to sell something.  Are you spending beyond your means?  Is what you are selling truly filling a consumer’s wants and needs, without artificially making them feel inferior if they don’t have it?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

And today she is 20 years old and stand almost eye to eye with me!  I can hug her, but hold her on my chest - that's not gonna happen anymore!  Has time ever shot past!  She has matured so much in the last few years and is a beautiful young lady! 

 

 

 

 

 

 

 

 

 

 

I watched solemnly last night as the realization that the Edmonton Oilers might win the Stanley Cup slipped away.  But as the final empty net goal was scored, I thought “Hold your heads high mighty warriors; you have treated us to a wonderful run and extremely entertaining hockey.  Let not the sting of defeat dampen your spirits, you have nothing to be ashamed of!”