Just a few thoughts about apocalypse
Sep. 29th, 2008 03:35 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
snousleCongratulations, bailout opponents: your voice has been heard, and the theft of the American treasury has been averted. Please thank the Republicans for pulling through on your behalf - sorry, it seems that the Democrats mostly abandoned you, but I'm sure you'll kiss and make up.
With the immediate cost of the non-bailout arguably twice that of the proposed bailout, it seems like a good day to reflect on the end of the world. Indeed, my whole financial life is flashing before my eyes:
Well, not mine, really - I didn't invest in stocks. This is merely the background against which I chronically and persistently failed to appreciate the fundamental strength of the American economy and its capacity for growth. After all, we were beset by crises: the Arab oil crisis, the various nightmares of the Reagan administration, the '87 crash, 9/11, and so forth. It was a great time to be bleak. The doom and gloom posture was always justified, but it came at a steep price. Who would have guessed that blind faith, in the face of all evidence, would have been so persistently rewarded? Obviously, any educated person would have known all along that the end was nigh.
(The Dow is not the last word, of course - I pay at least as much attention to the Gini coefficient, which is not quite so cheerful - but this has the advantage of being familiar. In truth, it is an absolute scandal that the10-fold oops, I mean three-fold economic growth I've witnessed in the past 38 years has done so little to improve American quality of life, but it is for this reason that I don't think shrinking the economy would be so bad either.)
It's funny, you know, because although it seems that I'm always hammering on the pessimists, I'm the only person I know that takes pessimistic visions of the future seriously enough to do something about them. An upcoming project, a two-year wheat stockpile, is a good example. It's wingnutty enough to raise people's eyebrows, but a sober cost/benefit analysis puts it pretty squarely in the same category as sensible, socially acceptable investments like fire insurance. And I undertake this, again, as an optimist; it's just another layer of relatively inexpensive ass-covering that makes perfect sense even if the chance of needing it is quite small.
I don't talk about this much, because when I discuss the darker possibilities, I do so with a seriousness that I feel is entirely lacking in the current culture of fear. It's as if I'm surrounded by children telling ghost stories - it's all panic and no gravity. The things that scare me, they're dull, boring things, like diseases that strike banannas, or aquifer levels in South Dakota. Unlike the ghost stories of the media, which are designed to attract and stimulate, my tales are soporific and depressing. As is so often the case, there are those who talk, and those who act, and when it comes to the apocalypse, I'm not much of a talker.
I have a rule in my life: before getting depressed over something bad, I take a little time to tally up all comparable events, and take a realistic look what I've actually lost. The chart you see above is not entirely up to date; it's missing a couple of pixels at the very end, where the graph should go down to about 10K.
Having a hard time seeing it? So am I. In order to feel really depressed, I'm going to have to get a magnifying glass. The point is that, placed in the context of a whole lifetime, the current crisis is neither unique nor notable. It is small even in comparison to current trends - recent increases in health care costs, for example, have had a far greater impact on the average wallet than this. If we follow the practice of balancing gloom with jubilation in accordance with actual events, these financial crises have been little more than breaks between songs at the worlds largest dance party.
Yes, the world might end tomorrow. I can't prove otherwise. But in the meanwhile, let's not jump the gun, OK?
With the immediate cost of the non-bailout arguably twice that of the proposed bailout, it seems like a good day to reflect on the end of the world. Indeed, my whole financial life is flashing before my eyes:
Well, not mine, really - I didn't invest in stocks. This is merely the background against which I chronically and persistently failed to appreciate the fundamental strength of the American economy and its capacity for growth. After all, we were beset by crises: the Arab oil crisis, the various nightmares of the Reagan administration, the '87 crash, 9/11, and so forth. It was a great time to be bleak. The doom and gloom posture was always justified, but it came at a steep price. Who would have guessed that blind faith, in the face of all evidence, would have been so persistently rewarded? Obviously, any educated person would have known all along that the end was nigh.
(The Dow is not the last word, of course - I pay at least as much attention to the Gini coefficient, which is not quite so cheerful - but this has the advantage of being familiar. In truth, it is an absolute scandal that the
It's funny, you know, because although it seems that I'm always hammering on the pessimists, I'm the only person I know that takes pessimistic visions of the future seriously enough to do something about them. An upcoming project, a two-year wheat stockpile, is a good example. It's wingnutty enough to raise people's eyebrows, but a sober cost/benefit analysis puts it pretty squarely in the same category as sensible, socially acceptable investments like fire insurance. And I undertake this, again, as an optimist; it's just another layer of relatively inexpensive ass-covering that makes perfect sense even if the chance of needing it is quite small.
I don't talk about this much, because when I discuss the darker possibilities, I do so with a seriousness that I feel is entirely lacking in the current culture of fear. It's as if I'm surrounded by children telling ghost stories - it's all panic and no gravity. The things that scare me, they're dull, boring things, like diseases that strike banannas, or aquifer levels in South Dakota. Unlike the ghost stories of the media, which are designed to attract and stimulate, my tales are soporific and depressing. As is so often the case, there are those who talk, and those who act, and when it comes to the apocalypse, I'm not much of a talker.
I have a rule in my life: before getting depressed over something bad, I take a little time to tally up all comparable events, and take a realistic look what I've actually lost. The chart you see above is not entirely up to date; it's missing a couple of pixels at the very end, where the graph should go down to about 10K.
Having a hard time seeing it? So am I. In order to feel really depressed, I'm going to have to get a magnifying glass. The point is that, placed in the context of a whole lifetime, the current crisis is neither unique nor notable. It is small even in comparison to current trends - recent increases in health care costs, for example, have had a far greater impact on the average wallet than this. If we follow the practice of balancing gloom with jubilation in accordance with actual events, these financial crises have been little more than breaks between songs at the worlds largest dance party.
Yes, the world might end tomorrow. I can't prove otherwise. But in the meanwhile, let's not jump the gun, OK?
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no subject
Date: 2008-09-30 12:34 am (UTC)If everything was so peachy since 1970 why the poverty gap, why the increase of homelessness in the streets, and why no healthcare?
Of course inflation goes up, it's why it's called inflation. What about the cost of food, oil, rent and such like vs. wages? Food here has jumped up to an extra 40-50% in some cases, I don't remember that happening in any of my life.
I think the gun might have bolted. Oops wrong metaphor.
no subject
Date: 2008-09-30 03:46 am (UTC)All anyone has is figures. What are the sources you have that "cover the human cost"? How do you know that the "human cost" you speak of even exists? Figures lie both ways with equal facility.
Of course inflation goes up, it's why it's called inflation.
I am embarrassed to discover that the chart I presented is not in constant dollars, something I'm normally a real stickler about. Yes, much of this increase since 1970 is due to inflation. An inflation adjusted chart looks like this:
Not as dramatic, and definitely some periods where value was lost. But the point remains that there were many crises that seemed terrible at the time, but did not have a long lasting effect. So calling it a "dance party" is an exaggeration from an investment perspective, but a 3x increase in inflation-adjusted GDP in the US since 1970 is nothing to sneeze at. (I have no idea what the UK figure is.) I am well aware that median buying power stagnated for a good part of this period, and have written in the past about the misleading nature of per-capita GDP in an environment with increasing income inequality. But if living standards are not tied to GDP on the way up, why would we expect them to be on the way down?
What about the cost of food, oil, rent and such like vs. wages? Food here has jumped up to an extra 40-50% in some cases, I don't remember that happening in any of my life.
What are you asking, exactly? I have no idea what the detailed inflation picture is in the UK, but in the US its manifestations are regional and spotty, and people generally notice what goes up more than what goes down. The BEA provides inflation statistics that I find entirely credible; in fact, their critics are guilty of some of the worst statistical cherry-picking I have ever seen.
no subject
Date: 2008-09-30 09:03 am (UTC)Cost of Living Index: http://en.wikipedia.org/wiki/Cost_of_living
Anything that factors in living cost rather than the fact inflation and prices goes up, is good - because the fact things get more expensive does not mean the majority of people can afford it. Up to press we have had it 'so good' - I would be interested in the last year or so. Or 1929-1931 or at least oil crisis, I don't think we've had a crash like this before then?