Being an INTJ, I'm naturally interested in systems, especially their uses and limitations. (Kinda dry, huh? But bear with me...) I'm pretty agnostic when it comes to these things; in an editorial context, that means I'm equally fine adhering to the codified stylings of, say, the AP Stylebook or The Chicago Manual of Style, or even a kludge of the two, if necessary. Part of my job here, in fact, is to apply such a kludge to our articles and help codify that into a form transferable to future generations.
Of late, though, the system I find myself thinking about with some frequency and trying to puzzle out, in the interest of maybe being able to one day afford future generations, is the world financial system.
Now, I can't even pretend to have anything approaching an exhaustive grasp of that system's workings. But what I've noticed lately is that one big question seems to loom over a number of my conversations, with coworkers and family members alike. Whether they're considering making a big purchase or going to see Slumdog Millionaire, it's there. It's even there - in the background, at least - in a couple of articles in our February issue. Maybe it's a hopelessly naive question, but it nonetheless seems to characterize the zeitgeist. Here's what I'm hearing people ask:
Will the world's markets ultimately tank, as capitalism implodes in upon itself and exhausts all possible natural resources and/or all possible revenue-generating streams as it fails to keep pace with the ballooning of our collective debt, or will the markets continue to find new sources of revenue generation as new industries ("green" energy generation, hybrid and electric car production, sustainable food production, alternative fuel production, sustainable real-estate development, online media) become increasingly viable? In other words,
Will we run the markets into the ground, or will our collective ingenuity be able to save them?
I know a number of people who are pretty sure it's hopeless, that the markets will never rebound and will in fact collapse within our lifetimes. But I've spoken to other people who say they've seen enough downturns like this to know not to panic. Who to believe?
In a lot of ways, the current model seems pretty unsustainable to me. Leveraging debt to fund future gain (on the part of corporations or governments) may have seemed reasonable when the economic models showed the prospect of infinite, unending linear growth. That's what most 401(k) and IRA projections seem to be based on - the compounding of those historic 8 to 10 percent average returns from the S&P 500 and similar indexes. People like Rex Sinquefield have made fortunes that way (see Jeannette Cooperman's February 2009 article "The Return of the King"). But now it's unclear if the models those returns are based on are even viable anymore, and everyone I'm hearing from has a million questions.
So what do you think: Will certain sectors die out, while other sectors continue with business as usual? Or will the collapse of certain key sectors (finance, real estate) bring down the prospects of connected industries to the point where those industries also collapse? Or will it be, as it has been so many times before, a case where certain businesses in a range of sectors survive (perhaps those with business models not predicated on infinite growth, or those who haven't leveraged themselves out of existence, or those in niches that are fairly necessary or "recession-proof"), while most others collapse? Will this be a weeding-out process, or a mass extinction? And what, specifically, do you think will make it past the Big Recession? Could local, alternative currencies - à la Stefene Russell's "Counter Currencies" - help us out of this mess?
I welcome your thoughts (or jeers). —Margaret Bauer, Associate Editor
