The Seeds of Economic Panic

Watching the news and reading the papers and seeing the panic seeding and growing worldwide produces an odd sensation in me. Firstly, I can't help feeling that the more we shout, 'Recession is Coming', the more likely it is to come or is that obvious only to me? Put it this way: If someone keeps telling me that a plant I had hitherto believed to be perfectly healthy, is in fact suffering from over-watering what is my most likely reaction? To stop watering the plant...and then there is every possibility that my plant will die of thirst! Every alarmist headline we read decreases our confidence both in our economic institutions and our governments. This makes us more likely to, firstly, reduce our spending causing the business we normally patronise to have reduced profits and lay people off which in turn causes increased unemployment, even less spending etc. Secondly, we withdraw our savings to dig a hole in our back garden in which to hide them - this location very suddenly seeming like a far safer location than our local high street bank branch - which in turn reduces the cash flow available to the banks and makes them more likely to go bust...

Surely we are caught up in some sort of chicken and egg syndrome here? What would happen to the world's economies tomorrow, I wonder, if newspapers worldwide printed, "Likelihood of Recession Recedes as Businesses Boom Again"...?

The other thing that strikes me is the obsession we all have with economic growth. Surely it is impossible that there is continual growth? You don't have to spend looking at anything in nature before you realise that nothing, but nothing grows infinitely...Even the tallest Redwood one day keels over with its roots in the air. Cycles of growth and die back are unavoidable, otherwise the world would be stagnant. It seems to me that we need to adjust our economic systems to accommodate this or we will be perpetually perplexed when the growth patterns of our economies suddenly go into 'inexplicable' decline. We need to accept that there will be times of die back and learn to exploit them as times to reflect on where we have been going, where we might want to go in the future and consider what new, innovative ways we could use to go there.

A plant may die because it has reached the end of its natural life-span or because it has been attacked by a disease or parasite that it is not strong enough to resist. Either way there are lessons to be learned. Perhaps now is the time we ought to start looking at our economic systems with these lessons in mind?