Thursday, June 11, 2009

Making friends with a recession.

I'm annoyed by the seemingly universal assumption that a recession is a bad thing to be avoided. If my 39 years of life have taught me anything, it is that there is an ebb and flow to all things, and this is not a problem. It is not a problem that the tides come in and go out, or that plants wither then bloom then wither again with the seasons. Nor is it a problem that my lungs fill with air then empty, only to fill again (my belly, too, for that matter).

Those things that appear to grow constantly, without ebbing, tend to be short-lived and have violent ends. Like a firecracker. Okay, bad example. I can't think of a good example at the moment. Regardless, what goes up must come down and so on and such as.

The point is, it is an absolute fantasy to think an economy can continually expand without ever receding; to think that the stock market can continuously rise without falling. We have to accept recessions as a natural part of life and, doing that, it makes no sense to view recessions with hostility.

The better approach, in my view, is a Buddhist approach. Moderation in all things. Perhaps that is Confucian. Anyway, we do not try to grow too fast, too much, or to continuously. We allow periodic recessions. In so doing, we avoid (or at least minimize) the occurence of a very large corrective recession, which is where I think most turmoil is generated.

The big problem with recessions is fear. Fear of losing one's job. Of losing one's home. Of being unable to support one's family. Of being unable to afford heatlh care or to pay for some other emergency. Which is why I favor a better safety net for all people, so that no matter how some one's financial crisis becomes, no matter how poor they may be, they know they and their family will have decent food, shelter, education and health care.

I'll explain how to pay for it later.

Ken Myers

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