Three scientists, a chemist, an engineer and an economist, are stranded on a deserted island. The only food available to them is in a giant can. Each scientist is working on opening the can and gaining access to the food.

The chemist works with native plants to develop an acid strong enough to eat through the walls of the can. The engineer attempts to develop a lever that would pierce through the can and open a hole big enough to reach inside and get the food. The economist says, "well, first let's assume a can opener."

Ah, yes, one of my favorite economic jokes. So, economics isn't strictly a science. But there are certain principles and theories that interest me. One of the most interesting is known as the paradox of thrift. Simply stated, the idea is that by saving for a rainy day a person may be responsible for triggering an economic downturn.

The long version is along these lines. If I hear enough bad economic news I begin to get worried. And that worry may lead to a change in my spending habits. One Friday night I may decide to stay home instead of going to my favorite little mexican restaurant. One week won't make a big difference, but I'm worried enough that I stay away for several weeks. In fact, I even decide to stop having lunches out during the day.

And maybe I decide that last year's jacket is still in good shape, so that money remains in my savings account. All these changes begin to add up. And my neighbors begin to share my concerns. Then the owner of that mexican restaurant notices that business is off just a bit, so she decides to forego her annual vacation in Moab. Better save some money for a rainy day. The cumulative effect is that our economic concerns become a major cause of the rainy day. Something I was concerned about, so I saved a little money, just in case.

All this leads me to ask myself it there might also be such a thing as the "Paradox of Politics?" I would describe it this way. Politicians don't like the guy from the other party. So they begin to pick apart everything that the other guy is doing. The "elite" press picks up on these attacks and becomes an unwitting participant. The public, trusting these politicians and "elite" press, buy into the argument. So, the politician, in his criticism, actually causes, or at least becomes a major contributing factor, to the economic or other problem that he identifies.

Let's face it. Our economy is based on a consumption model. And consumption is based on confidence. Confidence that our jobs will be there. Confidence that the government is doing the right thing. Confidence that we are getting good value for our money.

When any politician is negative about the economy, or unemployment statistics, or the viability of major companies, confidence goes down. Consumption suffers. And the politicians get what they want. Too bad politicians are more concerned with retaining or regaining power than with what's best for us taxpayers...........
9:23:54 PM    comment []