So the Keynesian view of macroeconomics is based upon the simple formula of C+I+G+(X-M) and the reality is that the Consumer (C) and the Government (G) are tapped out. The business sector with cash is sitting on the sidelines. We’re watching multiple countries – principally the US and Japan – setting the scuttling charges on their currencies as they sink them in pursuit of devaluation to spur exports; the fact that the system is cluttered with so much debt that nobody is really going to buy makes the policy folks look dumb. How does this macro play effect my family at the micro level?
If there were an abracadabra solution, I’d send you shill messages with the promise of the real information for only $29.95. But there are no magic answers, no way to fully innoculate yourself unless you opt to move to a doomstead in the midst of Montana and buy your kids their own personalized .38 snubnoses. Mommy! Daddy! The Tooth Fairy brought me a shiny new hollowpoint!! When that idea truly circulates at a mass level, then even the doomsteads won’t be safe because we’ll have regressed to the most primal level and it’s the director’s cut of Mad Max at your neighborhood…neighborhood. The solutions are so mundane – like, sooooo not abracadabra – that I’ve pondered for a week whether to even finish this article.
The management of CIGXM at today’s family level is about preparing the kids for that great oxymoron, the constancy of change. People will adapt and change as the fabric of society warps and yaws to the greater movements that occur in the world. In the case of CIGXM, there are three primary movements.
The first is that the systemic model of consumption – existing for about three generations now – is exhausted and the efforts to continually stimulate consumption simply and boldly illustrate that we the people have simply become fodder for the greater benefit of a system. We must understand that the majority of policy actions are designed to separate us from our money for the benefit of an economic system whose wealth is predominantly controlled by a very small percentage of the population. If it sounds overtly political, the simple reality is that it is; money and power for certain people are attractors to one another akin to crap and stink. The effective neutering of the regulatory structure via the repeal of Glass-Steagall and the uncontrolled entry of dollars into political coffers has allowed a stench that permeates society and actively affects the health of our younger generations. Understand that the constant ring of buy! buy! support the economy! only serves the true interests of a relatively few.
The second is that in the age of globalization, increases in business spending don’t automatically mean an increase in American jobs. The short-term drive for profits means that the cost of labor has become a more flexible factor in cost control than retooling and reinvestment. Understand this: to an accountant or financial executive, labor is considered a variable cost. As with the consumption model, the unfettered access to political votes that comes from uncontrolled campaign finance means that tax advantages also accrue regardless of where the jobs are located.
The final is that we’re going to be entering a true national dialogue over the real role of government, particularly at the federal level. The Keynesian model of government spending as an economic driver is also exhausted as the federal debt – nominal and real (accounting for the true unfunded liabilities) – has reached the point that the dollar itself is endangered. Issues such as the legalization of marijuana and gun control will beg the question whether the government exists to serve the people as set out by the founding fathers, or whether it exists to serve itself at the expense of the people. What does it mean if the government propounds the view for decades that a substance is inherently harmful and dangerous but alters that view within the course of weeks with an eye to taxation? What does it mean when local police departments are forced to announce that it cannot or will not answer certain crime calls but the people are actively discouraged from owning the means through which they can protect themselves? Further, what does it mean that the federal government simultaneously purchases immense quantities of ammunition for it’s own internal security arm? What is the perceived threat that justifies such prosaic, yet vital, actions?
What this means is that what the family is undergoing isn’t recessionary, but actually reversionary. The discretionary spending patterns of past decades are falling away with each thousand dollars of family income lost. Parents will have to be conscious of how their income is spent, knowing that the kids have to be educated with as little debt as possible, the house paid for and their own elder years covered with little expected help from the future government. There will have to be a greater awareness of the world around them and an explicit examination of their own values as those values are expressed in how the family monies are spent.