The biggest current worry right now in my area is whether GM and Chrysler can survive the current recession. As we all know, it's not just the auto industry that's affected, and some are wondering if we aren't living through the second Great Depression. No one really knows for sure what's going to happen. We could get deflation, or rising national debt could send us into hyperinflation if not handled properly. Some of us even have the idea that the whole thing was built like a house of cards to begin with.
That's what I want to talk about today. Let's start with the auto industry. Obviously, the industry relies on people buying new cars. The problem is, people don't necessarily need new cars; they need reliable transportation, which can also be provided by a well-maintained used car. So steps are taken to encourage people to buy new cars they don't really need. Customers having extra money and available credit are just two of the cards in the foundation of the house of cards.
Now let's talk about the stock market. In theory, stock prices are based on things like P/E ratios, but in practice the biggest influence on prices is the ratio of people who want to buy to people who want to sell. The long-term upward trend that lasted up until about a year ago was therefore largely driven by incoming investments being larger that withdrawals, which turned out to be the load-bearing card of the lower layer.
Now let's move on to quality. A trip to the local supermarket, electronics store or auto dealer will put you in front of a variety of products, all of which are attractive-looking and have a base level of quality. The food is tasty and usually won't make you sick (at least not right away); the electronics are fast and flashy; the cars as well.
Closer examination reveals a different picture. Many of the food products have ingredients like MSG and corn syrup, which are thought by some to be harmful, and are in any case not as tasty as the ingredients they substitute for: in the case of MSG, more flavorful base ingredients, herbs and spices; in the case of corn syrup, cane sugar. The electronics and appliances generally work well, but they are often sold along with an extended warranty, almost as if the manufacturer expects them to break just after the normal warranty expires (this actually happened to me with a dryer). The situation with cars is similar, though a lot better than it used to be.
Now compare this to life before the Industrial Revolution. Food was all organically grown, and corn syrup, MSG and canola oil nonexistent. Tomatoes were eaten fresh only when they were harvested; the leftovers were canned. Metal tools were handcrafted. Houses were built with timber frames instead of two-by-fours with just enough wood to prevent the house from falling over.
I'm not suggesting, however, that we undo the Industrial Revolution and go back to hand-woven clothes and horse-drawn carriages. Instead, I put this question to you: how can we combine modern prosperity and medieval craftsmanship?