“The Economy” might just be my least favorite over-simplification ever, right behind “Science,” “they say,” and “the Government.” What exactly is The Economy? Before you react with, “Well, of course everyone knows what the economy is,” I just want you to think about it. Define The Economy. It’s kind of hard, right?
The problem is that The Economy is a conglomerated self-reflection of an impossibly large number of financial relationships organized into a public and voluntarily closed system.
And given the fact that anyone’s particular sense of The Economy is necessarily limited to how much money that person might have at any given time, talking about The Economy with voters is particularly frustrating and unhelpful. And talking about The Economy with economists even more so. Because of the myriad variables involved, economists—like weathermen—are largely guessing at things. But, like weathermen, they get paid to exude an air of confidence for the camera.
But the parallels between weathermen and economists breaks down there. Weathermen, after all, have a far easier job with a much higher degree of accuracy. Why? Because the numerous individual components of a weather system aren’t listening to weather forecasts to figure out how they should be configuring themselves. That’s where The Economy idea really starts to get frustratingly complex. As if it weren’t already difficult enough to get a grasp on the vagaries of global finances, it turns out that our perception of The Economy very much influences the decisions we make within The Economy. So The Economy is a moving target that is constantly fluctuating according to our attempts to pin it down. Self-fulfilling prophecies? Sure. Obfuscation of Causation? Certainly. Harder to grasp than the ganglial cell of a jellyfish that’s in the process of contemplating Heisenberg’s Uncertainty Principle? Understatement.
On top of all of that, there’s a real demand for news about The Economy delivered in such a way that it doesn’t double as a surefire cure-all for insomnia. Which means that commentary on The Economy is usually over-simplified to the point of uselessness. Politicians in both parties talk about how they are the solution to building “a strong economy.” Which means almost nothing. Depending on the variables you choose to include in your study, you can actually prove that either Republicans or Democrats are better for The Economy. Really. Why is that? Because what exactly is a strong economy? Depends where you’re looking, and what you’re looking for.
Is it a national situation? Or a personal one? Is it small business health or the profitability of multi-national corporations? High GDP growth? Exports? Imports? Lack of inflation? Stockpiles of savings? Good credit ratings? Income equality? High employment? Housing? What? What is it? And, at the end of the day, the only thing any individual voter cares about is whether or not they are free from financial worries. For the average voter, building The Economy does not have a national, global, long-term color to it. Building The Economy to most people is putting food on a table under a roof. High taxes and welfare might be killing The Economy. It’s possible, depending on how you’re defining the terms of course. But don’t tell that to the guy who doesn’t pay taxes and enjoys a good bit of public freebies. To that guy, The Economy is quite strong. It’s certainly in recovery for that guy.
Which is why the politicization of The Economy (whatever that is) is so troublesome. The Dow opened today by plummeting 1,000 points today. Really, it did. But what does that mean? What caused it? How will it affect me? Should it be corrected? How should it be corrected?
Answers to these questions are generally too simple, contradictory, provisional, and, in the end, unsatisfactory. “The problem is China. China is the answer. Too many exports. No, too many imports. Debt. Lack of debt. Lack of good debt.” Real answers to these questions often involve more variables than anyone, even economists, can or want to account for.
So, what’s going on with The Economy? No one really knows to any degree of certainty. And if that person had any certainty, he would ruin that certainty by telling anyone else what he had found out. Because The Economy is not a system. It’s an organism. It’s best to let organisms achieve their own homeostasis without external intervention. Just think about how lost any one of us would be if we were asked to take control of every function of any living thing, no matter how simple. We’d be lost. Now think about an organism that is made up of billions of the most highly complex organisms on the globe. Yeah, that’s The Economy. And The Government thinks it can run it. At least that’s what they say. Because Science. (I see what you did there.)
If there’s a problem with The Economy, governmental intervention probably caused it or is keeping it from correcting itself. As we have seen so many times over and over again, national and global systems of relationship are too complicated and ever-evolving to be adequately regulated. Regulations for the economy are outdated before they’ve been rolled out.
Voluntary, individual decisions have been and will always be the most effective and efficient way to pilot The Economy. Because completely understanding, predicting, and controlling The Economy is impossible. Moreover, our futile attempts to do just that are probably doing damage to, you know, The Economy.