Fear of Fear Itself

Posted: April 8, 2009 in Consciousness, Consumerism, Culture, Economics, Tacky

The New York Times published an unbelievably fatuous article in the science section called “Oversaving, a Burden for Our Times.” The article states that our current phase of hoarding (in anticipation of scarcity) and saving money leads to saver’s remorse, as distinguished from buyer’s remorse, where frugal consumers saving for a rainy day (or more likely, losing one’s job) or preparing for the future (e.g., building a nest egg for a large purchase such as a home) are missing out on too many immediate pleasures and opportunities for fun. The article also accepts rather uncritically that human happiness trumps other concerns and justifies or rationalizes otherwise foolhardy behaviors. It’s a new spin on the old value statement “wish I’d spent more time with my family than at the office.” Consumer psychologists (who/what the hell are they?) have even coopted a term to describe the condition: hyperopia (the opposite of myopia). I normally relish new coin/usage and subscribe to scientific thinking over emotionalism or market-driven appeal. However, this article promotes some very bad thinking, maybe even dangerous thinking.

Some of my acquaintances have made the argument that our current economic contraction is mainly due to a crisis of consumer confidence rather than fiscal malfeasance in the C-suites and straight-up criminal behavior in the financial sector. The argument goes that in the long view, unemployment isn’t yet very high, nor are rates of foreclosure; they just look acutely bad compared to their historic lows of the past decade. Further, the toxic assets that can’t be marked to market honestly and sold because doing so would render insolvent the selling institutions (banks, investment houses, and hedge funds — most of which are de facto bankrupt despite our collective denials) aren’t really so toxic because the assets’ values didn’t decrease to zero but some other nonzero number that still retains some value, however low. Finally, as with the Great Depression, we can spend our way out of trouble with massive cash infusions, without triggering hyperinflation, because today’s deficits are still far cheaper than tomorrow’s production. So what we’re really experiencing is a self-fulfilling prophecy where a few nervous Nellies have sparked the equivalent of a bank run by infecting the general public with their pessimism. Phsaw.

I’d rather disdain debating the merits of these arguments head on; I’m already overtired from relentless coverage of financial news, as though money were the Holy Grail rather than the proverbial root of all evil. The only valuable takeaway from the article is the characterization of opposing character types: the hyperopic vs. the myopic, or as the article notes, the virtuous ant vs. the improvident grasshopper from Aesop’s Fables. At the risk of invoking a false dualism, many of us identify intuitively with one extreme or the other, the ant or the grasshopper. They embody character archetypes and as such are largely immune to logical argument. My acquaintances and I are driving each other to distraction because we seek evidence to support our worldviews, which spring from our character types. As a doomer, I can’t escape the nagging sense of betrayal of justice and impending collapse that my erudition and understanding of history demonstrate are inevitable, even if not predictably next week or next month. As optimists, my acquaintances can’t see why I should torture myself with worries about things so clearly beyond my control that can’t even be reliably foreseen and probably won’t occur anyway, considering how intellectuals have been fulminating and prophesying doom for generations that hasn’t yet materialized. Instead, let’s have some fun. Carpe diem!

If my character weren’t already set in stone, I’d appreciate the opportunity to “don’t worry, be happy.” I’m also reminded of the subtitle to the movie Dr. Strangelove, namely, How I Learned to Stop Worrying and Love the Bomb. In other words, learn to love the thing that will kill you. But those platitudes don’t work for me. Instead, I soothe myself (or delude myself, take your pick) with the knowledge that I’m full of the sort of personal integrity about which no one cares and which will certainly keep me isolated from folks who would rather be around happy-go-lucky types. Come to think of it, misery doesn’t like company after all.

  1. Vilon says:

    I agree,

    The idea of spending every dime of your money, getting debt, then paying 20% in interest to a banker is almost as stupid as the person who saves all his money to have a rocker grandkid spend it the year of his death.

    Suzy Orman says it very well, get 6 months of savings for rainy days in CDs, then contribute to your 401(k) and what ever is left, just enjoy life.

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