Recession Rant
So I am looking around at all the news of late about the impending recession or that we may actually already be in one. I am seeing all the recent news about tax breaks to help restart the economy and what more can be done to get things going. I even noticed sometime in the last 24 hours that the basic stuff we need in the grocery store has really jumped prices in the last year or so (eggs stand have has having jumped nearly $1.00, from around $2.00 to $3.00), though we already knew there had been a big jump in some stuff such as gasoline in the recent years, it too is on the upsurge again. It is really starting to sound like a doom and gloom kind of situation.
I have to admit though that I am not terribly surprised. We have moved much more toward a service (and some will say information) based economy. We, here in the grand old United States of America, outside of a few noted exceptions, just don’t make things anymore. And what things that are made or grown here, typically has such a disconnect from the originator to the end consumer that we hardly even recognize the connection - that is many other blogs I need to write someday.
Anyway, what I see, as admitted amateur economists, services are usually those things that are easiest to cut out of things when a budget gets tight. Well, we should all probably be paying more attention to out budgets then we have in the past, but with the pressures on easy money beyond our means, Americans are starting to feel that push. You cut out one service that you don’t need and so does your neighbor and so on. Now there is some body in a service industry or two that is now really feeling tight on the financial side of things, maybe to the point of laying off someone or as a really cutting back on expenses. It becomes a self-fulfilling prophecy.
The interesting thing though - if the situation continues to spiral those folks that are making and growing things - those things that we all have a true NEED for like food and clothing (oh wait - that is all overseas now) will continue to do well. In fact, if it all doesn’t get absorbed by the fuel surcharges and middlemen, farmers may actually end up seeing a little bit of an increase in revenue for their product. A new concept for farmers mind you - even though food goes up at the grocery very little of that goes back to farmers.
Bottom line - I think that moving toward a service economy has it merits, but I don’t think we can all move into services or we end up being owned by someone else for our basic needs. I wonder if there is a correlation to be looked at here from great empires that have crumbled in the past? Did Rome collapse because it become fat and lazy and outsourced to much to the fringes of the empire? What about Greece - to few olive growers and to many philosphers? Bonipart’s France - was the problem a lack of people in France still doing the basics to support the basic infrastructure and have enough left over to support a massive army in the field all the time?
