Explaining Economy

My boy is nearly 11, which is slightly daunting when his attentive mind starts asking hard questions. Not the birds and bees this time. He wants to know about the economy. This was scarier than ‘the talk.’

As with most of the world, much of the grown up conversation around here has been about money, budgets, and work. My little brain sponge asked last night what happened and why. How could I explain something so big that I don’t even really understand?

Imagine a road winding along the side of a steep rocky cliff. Though only paved with one lane in each direction, some places have wide shoulders, enough for another car, and the ground is fairly smooth. A sign warns against using them for anything other than emergencies. There are more cars on the road than it was designed for, and it frequently has slow traffic. It’s mostly moving…just slow. One day, someone looks at that shoulder and decides to speed things up by driving there. He’s just adding another lane that should be there anyway, he thinks. In a few years, they’ll expand the road… He’s just ahead of his time. He zips past everyone and makes it to his destination in record time. Someone else, seeing his success, follows this example. Then another, then another. It becomes normal. It’s what you have to do to catch up or stay competitive. After some time, those who frequent the road use the shoulder as a matter of habit, and many new to the road follow suit. The sign is still there, just unheeded. If people think about it at all, which is rare, it’s to be grateful for the increased flow of traffic without the cost of widening the road. What only the sign maker knows, however, is that the shoulder area is essential to the stability of the cliff. After years of use, aided by torrential rains, the ground erodes, warning signs are ignored, and one day the rocks fall. There’s a collapse, and a lot of people get hurt. The resounding crash isn’t confined to those who just drove the shoulder, but those who followed the sign, and even those going the other direction. People who weren’t on the road during the avalanche are still affected, as the passage way is now blocked.

The same is true with lending money. It was hard and slow, but stable. Then people were impatient and wanted the fast lane. You can say banks made it happen for more money, but really we’re talking about a lot of people who were focused on short term commissions and driving on, unable to even conceive of those behind driving faster to try and catch up, or the currents outside of anybody’s control. It became part of the culture everywhere and had to be done in order to stay in the business. Now, we have to rebuild, but no one can seem to agree how. Should they dig away to the old road, clear a tunnel through the new landscape, or find a new route altogether?

My boy, sensitive as he is, was understandably upset by the prospects. This was perhaps not the best bedtime story, nor is it something I can wipe away with a happily ever after. So I held him and assured him that his father and I love him very much. Daddy works very hard for our family. The future is uncertain, but there are thing we can do to make it better. Love each other. Be grateful for what we do have. Hold onto faith and hope, and be kind to others. Be willing to work for a better world.

All we can do is the best we can with the knowledge and resources we have at the time.

And we can move forward, learn from the past but always look with hope to the future.

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