The Real Economy: It’s In Our Heads

Posted on July 1, 2010

After reading the title of a recent article on Yahoo! Finance, “Market’s swoon prompts fears of dreaded ‘death cross’”, I really got to thinking how completely silly our economy has become.

To put it succinctly, our economy is now entirely based on satisfying unnecessary wants, as opposed to real needs. In addition, the financial underpinning of our economy rests on short-term gambles on future prices of assets in random series, as opposed to long-term commitments of capital in consideration of future income. This combination of Wants and Casino Capitalism, makes the entire economy subject to the whims of emotionally charged metaphors, and imaginary fears, that have no basis in reality. In other words, the economy is really in our head, and therefore economic prosperity is entirely dependent on how we think about our economy.

As such, the best antidote to the economic “mind” games currently being manufactured by pessimists, would be for the government to begin propagating completely fake, and yet optimistic, statistics to combat the false pessimistic memes that continue to proliferate. China of course, does this routinely and the economy remains the fastest growing economy in the world. Conceivably, the US government can also begin to make up statistics that show strong economic growth across all sectors, and Wall Street would eat up the data driving asset prices higher and freeing up credit.

If you’re somewhat a believer in pragmatism, as I am, you probably won’t find the above suggestion all that morally repugnant. Pragmatism suggests that the lies which make us happier and less fearful, should in some sense be considered true, and those which hurt us and make us worry, should be considered false.

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