I’m talking mostly about the U.S. here. Our housing crisis seems to have been caused by both banks and consumers deluding themselves into believing in a completely unrealistic and unsustainable idea of mortgage borrowing. Now that the dookie is hitting the fan, our congress is authorizing an amount of money that rivals our hugely unpopular foreign war to bail out the largest lending institutions responsible for these practices as well as the lenders who bought homes they couldn’t afford.
Our infrastructure is crumbling. Roads, bridges, power lines, etc. are in need of repair, to the tune of hundreds of billions of dollars1. Infrastructure repairs on highways are partially funded by money from fuel taxes. Now, however, due to our century-long dependence on the oil that has risen stratospherically in price, we’re driving less, paying fewer of those taxes, and yeah. Bad roads ahead. Also more toll highways and catastrophic bridge collapses.
Speaking of the fuel situation, our Big Three — mainstays for nearly a century — are going down like drunk prizefighters. This is generally considered to be bad for the economy.
The overall economic woes are causing Americans to pay off their credit cards and stop carrying balances (well, at least some of them). This is bad for the credit card business. So, companies like Bank of America (and others) are starting (even more) to penalize responsible cardholders, and reward the spendthrifts.
Other interesting tidbits: The U.S. Patent Office is reported to have said that almost all software patents may, technically, be illegal and unenforceable. If this is ever put into practice, there goes one of the more profitable sectors of the American economy (since we no longer build or make or produce anything tangible, apparently). Cell phone companies are shaking in their boots as a judges increasingly rule that some of their bread-and-butter tactics (which also happen to be deeply slimy) are illegal. Our Presidency (in close collusion with the rest of the government) has racked up a national debt of (estimated) over half a trillion dollars for future generations to pay off. The government has finally decided to honor a century of science and regulate tobacco as a drug2. We’ve already seen some of the demise of that industry. Americans are (sort of) wising up to the health effects of fast food, and some expect those profits to fall drastically in the foreseeable future. Oregon has been the first state to estimate the economic impact of getting rid of migrant workers, resulting in a dismal outlook. Energy companies are beginning to respond to people conserving more electricity and even producing their own. The response is not pretty, and not good for consumers. It may also not be good for the energy infrastructure.
Here’s my take on all this:
- As some have already said, obviously, some of the most fundamental elements of our economy are shifting. I’m not the guy to predict what our economic reality will be in 50 years, but it will be different.
- This is our comeuppance, in a way. Or karma. Or the simple consequences of doing things we always knew were terrible ideas, but hoped would never come back to bite us. It will take a while to dig ourselves out of this.
- If some miracle happens and we are saved from the consequences of our actions, I’m not sure that will be a good thing for us as a nation, or as human beings. I think working through this (the economic side, at least) and fixing it, step by step, will be good for us. I hope we do it well.
- We’ve put our money on the wrong horses. Large segments of our economy — and even government funding — are based on sources of revenue that are nonsustainable, immoral, illegal, or that depend on large-scale consumer fiscal irresponsibility.
- Which we might be able to afford, if we weren’t involved in a certain war or two [↩]
- No word on alcohol, of course… it couldn’t possibly be a drug! [↩]