Economics for everyone (episode twelve)
By Dr. John F. Sase
—————
Gerard J. Senick, general editor
Julie Gale Sase, copyeditor
William A. Gross, cultural advisor
“Mr. Ness, everybody knows where the booze is. The problem isn’t finding it. The problem is who wants to cross Capone.”
—Sean Connery as Officer Jim Malone in “The Untouchables” (Paramount Pictures, 1987)
In our preceding episode, we continued to explore the concept of a sustainable economy with sufficient affluence for all, built upon a strong platform of more humane Law and Economics. In order to achieve such an economy on the global, national, and local levels requires the work and commitment of all of us.
However, current events threaten to erode our Constitution, our Democracy, our society, and the fabric of our international relations. In our preceding episode, we presented seven sequential Growth Exercises that developed from three dozen positive actions for growing a successful society, business, and home life. These exercises include Inner Preparation of Self, Preparation for the Outer World, Interaction with Others, Interaction with the Larger Community, Interaction at the Higher and Wider Social Level, Respect for Ecology and the Environment, and Attainment of a Higher Level of Consciousness.
In this episode, we address monumental changes to our economic system, ones suggesting that being a skilled attorney, tool-and-die maker, musician, medical doctor, or any other profession is not sufficient in this current day and age. We suggest a more wide-ranging approach, one that includes knowledge of the Arts and Sciences as well as the development and use of critical thinking. In addition, Attorneys and their firms also need to master the tools that enable them to manage and to protect their working capital as well as to nurture their understanding and practice of Law. By heeding the lessons taught by the Crash of 1929 and the Great Recession eighty years later, members of the legal community may find themselves in more sustainably secure financial positions.
The Decay of Our Economic Matrix
Rather than searching for brief, concise answers in respect to how the Economy affects our Democratic Republic, we may find it more important to understand recent economic changes in the context of the other social and natural forces that impact our lives. Our current state of affairs at the global and national levels reflects the current trend that abandons the depth and breadth of morality, life preparation, and traditional education in favor of the Myth of Security. This myth turns our focus to narrower job-molding for highly specialized positions that may not endure sustainably. Such an approach turns us away from the development of a wider and deeper comprehension of simple economic behavior. For example, when an individual, firm, or nation increases spending while sinking deeper into debt, the outcomes tend toward bleakness. Why do we not recognize this possibility?
Perhaps we have taken a path that abandons critical thinking—an art that has evolved from the study of Philosophy, the Humanities, Art, Mathematics, and the Sciences over the past three millennia. In recent decades, such thinking has begun to slip into a phase of devolution. Today, our society searches elusively for a simple codex that “guarantees” a safe harbor and stable lives for self and family.
However, the problem of this approach emerges when the search itself becomes a trap. A small number of “game masters” strive to manipulate this system toward their personal ends while leaving behind those “salary serfs” (formerly “wage slaves”) who have fallen dutifully into line, an act that leads them to scratch their heads and to wonder what has happened.
Dr. Robert B. Reich (Former Secretary of Labor and the current Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at UC Berkeley) offers an additional perspective on this issue. In his book “Supercapitalism: The Transformation of Business, Democracy, and Everyday Life” (Knopf, 2007), Reich states, “A final truth that needs to be emphasized—the most basic of all—is that corporations are not people. They are legal fictions, nothing more than bundles of contractual agreements.” Reich adds that “[T]he triumph of Supercapitalism has led, indirectly and unwittingly, to the decline of democracy.”
Life as a Living/Learning Experience
Life as a living/learning experience connotes a commitment to lifelong learning, as opposed to compartmentalizing educational experience into only the years spent in elementary, secondary, and post-secondary education. Inherent to this path of personal multi-disciplinary development, the long-held ethic of the Golden Rule forms a core that is universal over time and place.
In the latter half of the Twentieth Century, many parents abandoned the long-held Golden Rule that many believed had become twisted into a sardonic parody of traditional morality in the Vietnam-War era. As this generation of students reached parenting age, educational priorities changed. Resultantly, many voters began to consider many character-developing subjects in the Arts and Humanities as merely enhancements that could be relegated to the home or religious institutions. The outcome of this view led to school budgets being cut in favor of more practical subjects. During this era, we began to witness the formation and ascent of a generation that we have taught to pass standardized tests without thinking critically or questioning what they have learned. Many of us noticed this trend emerging in elementary and secondary education well before the turn of the millennium.
In our university classrooms, we have experienced the resulting outcome of the reauthorization of the Elementary and Secondary Education Act of 1965 through the No Child Left Behind Act of 2001. Now we have many college graduates left behind because they have failed to learn how to think in a critical manner that is necessary for discovering solutions to present and future problems. Though they may have natural intelligence, these graduates lack the intellectual discipline to synthesize what they learn, to write clearly and correctly, and to reflect a full and true understanding of the subject matter at hand. Many of our leading universities have set the pace complicitly through their incessant reliance upon standardized tests and perfect grades as criteria for admission. As a result, kindergarten through twelfth-grade teachers have succumbed to this massive pressure while descending into the dubious practice of “teaching to the test” rather than engaging their students in the interactive process of education.
A significant portion of our educational system has devolved into not-for-profit and for-profit enterprises that train specialists who never learn to question their actions and behavior. Many college graduates enter the workforce lacking the perspicacity to recognize the vital relationship between power and morality. In his book “The Unconscious Civilization” (Free Press, 1995), Canadian writer and political philosopher John Ralston Saul explains that civilization produces moral traditions. However, it appears that we have been educating recent generations of students who fail to grasp any depth of knowledge about and understanding of their civilization and possibly may not have the ability to maintain a civilized society. It is not only young people who have been affected. Many older adults have become prey to the “dumbing down” of our culture and to its growing lack of propriety and sophistication. Regarding the importance of writing for business, the National Commission on Writing states, “Based on the survey responses [sample of 120 major corporations employing 80 million], it appears that remedying deficiencies in writing may cost American firms as much as $3.1 billion annually.” One firm stated that it was likely to send 200 to 300 employees annually for courses in Business Writing and Technical Writing. (“Writing: A Ticket to Work... Or a Ticket Out,” College Board, 2004).
Our brightest minds have fallen into a web of intrigue that has been spun by a small number of corporate con-artists and non-neutral Economists. These collaborateurs have rigged our financial system for the benefit of the few. Saul states, “The bankruptcy of our economic and political systems can be traced directly to the assault against the humanities.” Rather than developing solutions for world problems through mediation, many in our best educational institutions have stepped aside and have allowed darker political and economic forces to fuel crimes against humanity. These crimes include unlawful wars as well as indifference toward genocide, starvation, disease, and other abominations.
For the task of studying and explaining our economy, we can measure it superficially with broader mathematical tools lent to the Social Sciences and the Humanities. However, we cannot understand our economy fully without a deeper knowledge of History. For example, American journalist Chris Hedges cites in his book “Empire of Illusion: The End of Literacy and the Triumph of Spectacle” (Nation Books, 2009), that many economists “build elaborate theoretical models yet know little of John Law [an early Nineteenth-Century Scottish economist who believed that money was only a means of exchange that did not constitute wealth in itself], have never closely examined the [Dutch] Tulip Crisis [of 1637, the first recorded speculative bubble], and do not study the railroad bubbles or the deregulation that led to the Great Depression.”
To our chagrin and despair as a society, we unfortunately ignore the exploration of the ideas of the past. Often we find ourselves immersed in a quagmire that we can typify by the paraphrased axiom “Not invented, neither here nor now.” When we afford ourselves the time to examine the past closely, we often find historical lessons that relate to and offer solutions for our current challenges. The present Student-Loan Ablution Movement may draw upon Greek history. For example, Athenian Democracy rose through egalitarian reforms, including the erasure of the debts that were bankrupting Athenian citizens. We find similar examples from the reign of the Roman Emperor Tiberius in which widespread bankruptcies and the collapse of the real-estate market were ended successfully through massive government spending and interventions that included interest-free loans to Romans. In more recent times, Franklin Delano Roosevelt told our troubled nation during his First Inaugural Speech that the “only thing we have to fear is fear itself.”
Nevertheless, many students and others among us with whom I (Dr. Sase) have spoken recently express new fears in respect to our troubled Democracy. Perhaps we can dwell on the words of S. I. Hayakawa, Semanticist and United States Senator from California, “Those who cannot learn from history are doomed to repeat it.”
Think Globally/Act Locally
Throughout history, both established and developing countries have muddled their way through vast ranges of crises. These crises include sovereign-government defaults on domestic and foreign national debts, financial market panics and bank failures, subprime-mortgage meltdowns, and attempts to extend a prosperous economic phase artificially through increases in public spending while decreasing income taxes and other public revenue. This last action leads to a rapid accumulation of the national deficit and to subsequent debt in a period of unsustainable economic growth.
Today, we live and work in a Global Village. Most of the local street poets, minstrels, and town criers of earlier ages have given way to entertainment and news delivery through the Internet. Most well-educated adults need more than fundamental technical skills to survive and to thrive. In order to interact with our more complex Global Community, one needs to acquire a comprehensive, wide-based knowledge of the Arts, the Humanities, and the Social and other Sciences as part of ongoing lifelong learning. In order to understand the current state of our American Economy, we need to look at more than a handful of numbers and a few graphs, watch a few short online videos, or get our fill of daily information from Tweets. The economy of a Democratic Republic is a living system that reflects the full human experience. A comprehensive understanding of our economic progression requires comprehensive knowledge of all of its elements.
The Wrap
Individual professional practices, as well as large firms, rely upon various financial markets to hold and to increase their cash reserves. Many attorneys depend upon this reservoir of funds to finance their practice between lump-sum payments of settlements. In these modern times, being a skilled attorney is not enough. Law firms also need to master the tools that enable them to manage and to protect their working capital as well as to nurture their understanding and practice of Law in order to avoid the pitfalls of nefarious market actions and political chicanery.
In closing, we may sum up by asking what Economic Cycles mean to attorneys. The fluctuations of income that accompany economic cycles tend to influence the number of clients who can afford to pay both plaintiff and defense counsels as well as produce collectible settlements and judgments. In short, economic fluctuations affect the availability of credit and the fluctuation of related interest rates for funds borrowed to finance litigation. These fluctuations also influence the ability of defendants and their insurance carriers to pay out awards that are determined by jurors or by the bench. Therefore, attorneys who study and understand Economic Cycles can prepare themselves and their practices to weather economic storms.
————————
Dr. John F. Sase teaches Economics at Wayne State University and has practiced Forensic and Investigative Economics for twenty years. He earned a combined M.A. in Economics and an MBA at the University of Detroit, followed by a Ph.D. in Economics from Wayne State University. He is a graduate of the University of Detroit Jesuit High School (www.saseassociates.com).
Gerard J. Senick is a freelance writer, editor, and musician. He earned his degree in English at the University of Detroit and was a supervisory editor at Gale Research Company (now Cengage) for over twenty years. Currently, he edits books for publication (www.senick-editing.com).
Julie G. Sase is a copyeditor, parent coach, and empath. She earned her degree in English at Marygrove College and her graduate certificate in Parent Coaching from Seattle Pacific University. Ms. Sase coaches clients, writes articles, and edits copy (royaloakparentcoaching.com).
