economy

Being Uneconomical for an Uncertain Future

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.There is a common line of thought that argues that we should undertake a massive restructuring of the economy, even if it has no current clear benefit, in preparation for some dramatic future change like climate change or peak oil. Folks like Bill McKibbean have the logic, unless we make drastic changes now, the future will be bleak.

Their logic reminds one a lot of the logic of a High School Guidance Counselor, pushing over-priced college educations at so-called “select institutions” that are very over pricd. They argue unless one gets an expensive college education, the future will be bleak. They say, unless you go seriously in debt, you will have no future and be without a good job.

Trees Lines

Nobody today can tell us for sure about when or if climate change will occur, or for that matter what the impacts of peak oil will be. We have projections and models that extrapolate data based on today’s conditions and projected changes, but they probably are not accurate as effects rarely are linear. It�s quite possible that effect our growing use of fossil fuels may be far different then anything yet predicted.

Yet, it�s also hard to object to efficiency standards and pollution controls on power plants that benefit society now. More energy while burning less fuel will benefit the economy by lowering costs over the long-run. More fuel efficient cars, while possibly more expensive up front, will provide drivers with lower fuel bills over the car�s life. Good standards that improve efficiency, conserve resources, and reduce pollution, help us now.

Medusa

I disagree with folk like Bill McKibbean who argue for a radical transformation of the economy based on a projection of climate change or peak oil. We should work to conserve resources and clean up our generating plants, but not because of a future projection, but to improve economic efficiency and the quality of our lives today. If with incidentally also help change the projection for bad things to happen tomorrow, then all the better.

Our Low National Saving Rate

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One of the most concerning news stories of recent weeks is our low national savings rate. Last year it was a negative 1.6%. The previous year it was negative 1%. This year’s rate is the lowest in over 70 years.

For most Americans, that’s just another financial figure that goes in one ear and out the other. For some it’s not surprising, as they know first hand the impact of our mounting debt on their finances. They know what it feels like to be beholden to the bank.

Yet, for those who have a real understanding of this figure it’s pretty scary. It means we are spending more then we have money coming in. And a lot of that debt is not going to things that are improving us or building our country. It’s one thing to be borrowing money to get an education or buy an house or pickup truck, it’s another to buying more toys then you really need.

There is a lot of evidence that we are buying more toys then we need. We are too often sold consumerism and become blind to our own means or the costs of our consumption. Indeed, the personal financial transaction is minor compared to all the stuff we are amassing as individuals.

Roadway

All those material possessions had to come from somewhere. They involved the exploitation of some material whether close or far away from us. They may have or may not have brought money into the local community. More likely then not, these days, they didn’t. And then they have to go somewhere.

There is no problem with making investments into the future. Likewise, there is no problem with purchasing material goods. But we need to be reasonable at what we buy and realize that there is only so much we really need. We need to focus more on ourselves and our communities, and stop buying things.