My take on the economy (FWIW)

This is not the slow but steady growth I was hoping for.

Before I explain that statement, let me offer this caveat: I have never taken an economics course – macro, micro, or any kind. Even while studying financial planning in my work at BNA in the early 2000s, I learned only enough to understand the effect of the economy on individuals’ financial situations and investment choices. Time value of money? return on investment? internal rate of return?– yes, indeed. The underlying and overarching geopolitical and social forces that make it all happen? – no way.

Ever since the financial planning  course I completed through Kaplan College, I’ve been an advocate of slow growth in the U.S. economy, hoping we would avoid the bubbles and bursts that have devastated so many people’s nest eggs and careers since the turn of the century. Perhaps if I had studied economics – micro and macro – I would have understood the hazards of the “weakness in global supply and demand [that] seems to be pushing each other in a vicious circle,” as Neil Irwin wrote in the New York Times this morning.

I don’t think we ever aspired, as our parents’ generation did, to a world in which our children live better than we do. That’s testament to two factors: the way we were brought up and the standard of living we have achieved on our own. We live pretty well, and I think we did fine by our kids, too.

True, I protested when my mother used to buy a bolt of cloth, notions, and a paper pattern in the sizes my sisters and I wore to make us identical dresses. I know I belly-ached when my older sister got new clothes, handed them down to me, and I wore them out – so my younger sister also got new clothes. But I was clothed well and fed well, transported and vacationed appropriately. We didn’t want for much, growing up.

There were times of relative hardship when our daughters were young, but we did our best not to let those circumstances filter down to them. “Relative” is the operative word here. For a stretch we had dinner made from ground meat more times each week than any other protein. In some years they each received a single present for holidays and birthdays. We loved camping and hiking, raising our kids in the out-of-doors – much moreso, in my memory, than I experienced growing up. When we had enough income, we spent and saved in good measures.

Most of our current, high standard of living comes from the booming economic growth of the late 20th century. With the help of college funds, contributed partly by relatives and greatly boosted by investment returns, we sent our kids to good colleges and helped them when they needed a hand. We live well, eat well, travel where and when we choose, and want for nothing. We can retire whenever we’re ready and not worry about how much we’ll still have when we’re in our 90s.

It’s not a given that our children’s and later generations will be able to say the same in 30 to 40 years. Way too many young and middle-age families are struggling financially and/or have stalled careers because of long stretches during which opportunities for advancement – in the workplace and in standard of living – were scarce.

So, about  the “slow but steady” growth I long advocated. That I was naïve about something so complicated shouldn’t surprise anyone who knows me well. I can understand complicated concepts and situations, but I really have to work at it – not just study superficially to get through the current question, as I did with the financial planning course.

I could do that, no doubt, but I think I still would be pretty frustrated – not by my own abilities, but by the problem at hand. As Neil Irwin concluded in his New York Times article, “there’s a lot we don’t know about the economic future.” So I’ll put my study of economics aside and let people who are smarter than I am puzzle through. I hope they find solutions that work, changes that will turn the economy around.

Irwin cites Larry Summers’ call for “demand-side economics” (my words, not theirs) and notes that both major political parties’ candidates for president advocate greatly increased infrastructure spending. I’m glad that my agreement with that policy position won’t have to play into my choice at the polls in November…

If I were at all up in the air on that decision, I might be looking at which candidate’s proposals to invest in infrastructure stand the best chance of getting implemented – but I’m not. I just hope Hillary can find a way to implement policies that bring us out of this slump – the one I inadvertently wished for.

Otherwise, as Irwin said, “if something doesn’t change from the recent trend, the 21st century will be a gloomy one.”