The Panic Room

20 05 2009

Good news, everyone! The world economy is shrinking at a record rate ever since statistics were kept at all, or at least so the media says. The crisis has struck and although lots of Bulgarians have preferred to ignore it and are now facing with largely ungrounded optimism (explainable only for government officials in the stride to this July’s elections), nevertheless this facts remains. We are facing it alright.

Apart from lengthy statistics and complicated input-output tables, you can see it around you. In today’s crowded tram nobody gave a single coin to a beggar. People buy less and worry more. It is only Sofia’s wonderful spring that gives a certain tint of surrealism to the gloomy picture.

The art of life today is to keep on, and think a bit about crises. In the realm of mainstream economics there have been two major lines of thought trying to explain those (with varying degree of success). Initially classical economics was mainly in the business of ignoring and waiting for the system to reach its inevitable equilibruim point. When people got tired of waiting in anxiety they turned to an alternative idea – the brave new world proposed by John Maynard Keynes. Keynesian principles reject the idea of waiting and proposed active monetary and fiscal policy (notably deficit spending) in the hope of economic revival. The fifties and sixties proved them misplaced.

After both schools were proven inadequate, they came up with an excitingly refurbished new set of reworked old models (the neo-classicists and the neo-keynesians), sadly also capturing only fragments of reality. What is often lost in those models are a lot of people – waiting, guessing, not knowing, worrying, losing jobs, making windfall profits, fearing, and… hoping. It is those people that should be addressed and encouraged to work for themselves and think positive. Because each and every crisis is but a natural part of the business cycle and every down is eventually followed by an up.

The art of living through crisis is nothing but the art of living itself. Get out of the panic room!

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