Jan 152009

The economy definitely seems to be going down these days, but my question is, when was it actually up? In 2001 and 2002, after the Dot Com bust, applications to law school doubled, reflecting the sense that there was just nothing else to go get a job doing. Had that situation really ever improved?

On retrospect, though, even if it hadn’t, those years still seem like good times. There may not have been many technology jobs, but the rest of the economy more or less seemed to hold itself together. Fewer law firms seem to have laid people off, at any rate.

Which is kind of what makes now so scary. Not that the law firms are laying people off, per se, but that the wealthier sections of society seem to be struggling. Now, maybe that’s not quite true. It’s hard to shed tears for a law firm laying people off and also returning $1.8 million in profits per partner. “Struggling” may be a relative term. But bankers are out of work too, and even wealthy philanthropists are unable to share what they once did now that their portfolios have shrunk.
It’s making me wonder if there might be something to “trickle down economics.” At least insofar as when the wealthy suffer, all below them do as well, as the wealthy no longer have any wealth to be shared. But I hate to validate an economic policy that creates such rigid class strata. I note a dynamic, not a solution. I don’t think the solution necessarily is to bolster the wealth of the wealthy and hope that it will trickle down; on the contrary, I think it’s much better to bolster the wealth of the larger lower classes so that it might then trickle up.

The problem with trickle-down economic policy is that it entrenches the players. Wealthy people are able to ensure they remain so, but everyone else must hope for scraps — hardly reliable enough to guarantee economic mobility. But an economy is really about heat, not fuel: it’s not about the assets in it, it’s about how fast those assets move. A dollar has much more value when everyone has a chance to spend it than when it gets horded at one end.

Therefore to remedy our current economic predicament we must keep those dollars moving. This is not to say that there should be no personal savings — causing economic vulnerability in the population is no solution. Personal financial cushions are in fact constructive because once attained, dollars can now be spent more freely.

No, what I refer to is what I’d earlier described as economic energies. Rich people are different than poor people in that they have more assets, but they are no different than poor people in that they each are still only one person, a person who needs to be fed, clothed, and housed. Every person has some capacity to consume and also produce, some economic energy to contribute to the economy. We must therefore ensure as many as possible can. Don’t buttress companies in order that they may pay bonuses; buttress them so that they might maintain or even expand their payroll. Our economic stimuluses must be about harnessing as much of the population’s economic energy as possible, so that the most people can get a crack at that dollar and its value can add up.

 Posted by at 7:38 am

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