MORE VOODOO ECONOMICS : Recession? What Recession? Let’s Just Make the Best of the Worst of Times
So they give Nobel Prizes for economics, do they? It never seems sillier to regard economics as a science than when this country goes into an economic tailspin. The conflicting evidence, guesswork and political calculation that form the basis for declaring when recessions begin and end make economics look as if it belongs in the same university building that houses the palmistry department.
It’s easy to understand why people in economics and the study of politics style their disciplines as sciences, despite both fields’ stunning lack of precision and predictive power. Government budgets and private givers have always had deeper pockets for sciences than for arts or crafts. You want a good, steady supply of grant money? Be a science.
The economists’ endless debates about markets, money supply and interest rates are arcane in the extreme. But their wrangling over recessions--Are we in one? Is it over yet? One dip or two?--seems spectacularly out of touch when we’re going through what the rest of us easily recognize as hard times.
Certain political figures, such as the President, display a charming delicacy when the subject of recession comes up. Some of this behavior is pure politics, of the don’t-bother-me-with-bad-news variety. But the refusal to engage the subject lest we “talk the country down,” the persistent notion that a recession can be cured if only the consumers’ hell-bent-for-leather desire to buy something can be restored--this behavior suggests that people like George Bush really do think economics is mainly voodoo.
Well, voodoo is actually kind of hip. Might as well try it. The glass is not half-empty; it’s half-clean. Let’s look at the good side of being in a recession.
Most obviously, we’re free from any more pyramid-studded, marble-clad monuments to office work, at least until the thousands of surplus units find some way to fill themselves up. This means a slower increase in traffic congestion and a reprieve for endangered gas stations.
The restaurant business, hit particularly hard by whatever it is we’re going through, is an especially bright spot. With revenue down drastically, places that used to regard a request for a reservation as an unpardonable affront to their dignity are now at least pretending to be grateful for business. Prices have come way down, and a whole generation of waitstaff may be learning the hard way that the public is not their enemy.
With housing prices at the end of a historic ascent and preparing to do what prices always do when they’re not going up, the amazing spectacle of human shelter as the nation’s most profitable investment medium may be coming to an end. The prospect that it may no longer cost 44% of a household’s income to pay for the household’s roof may, unfortunately, slow the exodus of people from this area and make it less unattractive to prospective employers. We’ll have to count on a recession-induced increase in crime to keep scaring them away.
Another common gripe--stupefyingly high salaries for pro athletes--is also about to be resolved. There has been a sharp drop in television advertising (although it hasn’t yet succeeded in driving Dave Del Dotto off the air). Hardest-hit are the network sports departments, which paid the-'80s-are-never-gonna-end prices for rights to major events. Those contracts are causing huge losses. Next time the rights come up for bidding, no network in its right mind (yes, that concept is a stretch, but you know what I mean) will pay anywhere near the existing fees. With TV revenues down, the pro sports owners will start exerting downward pressure on salaries, and soon journeyman NBA centers will be back down in the $500,000-a-year range, where they belong.
Best of all, a recession allows us to learn a little about how banking works. The same people who once rushed to approve loans for all those half-empty office buildings and luxury hotels are now denying credit to even their most reliable and trustworthy customers, thus keeping the recession in business. Despite their impressive buildings and reassuring ads, bankers--no less than the black-clad legions of nightclubbers--are merely slaves to fashion.