“Markets are about traveling, not arriving,” the banker said, mysteriously. So let us travel through time. “In the past, in difficult times, Americans just worked harder,” he went on. “But there aren’t enough hours in the day, or enough incentives to work harder, and there’s nothing to work on. People, in the end, will find a way to work their way out of it. They’ll pay down their debts. They’ll have to. And then everyone will get bored with doom and gloom and dip their toes in again.
I did this a few entries ago. I found someone that agrees with what I’m saying and highlighted it. But this excerpt by Nick Paumgarten in a piece in The New Yorker called Freeze! is dead on. I wrote something similar yesterday about people refusing to wait in lines, implying that the alternative is psychologically easier to deal with than standing in lines. But this is much more concise and nails it on several levels:
- In the past Americans just worked harder by dialing up the amount of time worked – This doesn’t work as much now because the quantity/quality work ratio is tilting towards quality work. And what I mean by quality is intellectual, problem solving type work. So now you have to rely on education, creativity, and some motivation to tie them together. The downturn is that motivation.
- People will pay down their debts – There is a satisfaction with paying off debt. There is a lot to be said for well orchestrated discipline. It really frees the mind of stress and that is a catalyst for creativity and innovation.
- And then everyone will get bored with doom and gloom and dip their toes in again. – Impatience, hype, and following the crowd is what got the US into this situation. And these three behaviors will get the US out of the situation… but after some significant habitual changes are in place i.e. paid off some debt.
So if you get a chance, check out the article and think about what you would do.