Sunday, February 3, 2013

Don't blame yourself for the Depression!

Comment in T&G to NY Times Column by Catherine Rampell at:

In this economic depression the worst thing you can do is get lost in blaming yourself for your misfortunes, when clearly there is a huge systemic problem that was beyond your ability to foresee or prevent. Blaming ourselves is a threat to our mental health and our ability to recover, and anyone telling us to do so should be ignored. 

Boomers, like every generation, sometimes made good choices and sometimes foolish ones. But most of us made the best choices we knew how given the information we had. Sometimes it was bad information, more often it was good information but then the situation changed and tens of millions of us were left holding the bag. 

And anything that sets us against each other - young against old, college grads against high school dropouts, US vs. foreign born, white vs black - should be rejected. There is no way out of this disaster for us unless we can work together on solving our common problems. 

The central problem is collapse of aggregate demand in the real economy. The economics ideas we were taught in college couldn't predict this and apparently offer no good answers. they simply don't deal in the kind of categories needed to understand and work with the current situation. In looking at where the money is going we need to use a model with many more categories. 

The ideas we were fed in school confined us to a mental box from which there was no escape. So stop drinking the Kool-Aide and come in from the fog! 

There are many things that can be done once you start to think outside that box. Truther's theme about escaping from a debt-based currency is one important possible step in the right direction, and there are many more good ideas out there.