I was linked to an article today where an aging billionaire was interviewed about his belief that civilization might be on the brink of something Really Bad. It was from a few years ago. He had a Really Bad feeling about oil; specifically, running out of it. Strangely enough, he did not have a Really Bad feeling about a housing sector gone bad and its rippling effect on the global economy. Perhaps it was too early then to see the rapidly inflating bubble bouyed by delusions about home values and sponsored by delusional lending and investing.
I'm fascinated by the doomsday prophets and their followers. How quickly everyone forgets buying generators and bottled water for Y2K...now, everyone freaks out at Al Gore's power point presentation and runs out to buy hybrid cars. But you never get hit by the train you think you see coming. It's the trains you don't know about that take you out. But ducking and dodging legions of phantom trains just leaves you that much more exhausted when, finally, an iron engine finally does come along on a collision course.
While everyone was busy talking about the impending disaster of Y2K, the dot-com bubble was reaching maximum capacity. And shortly after everyone had heaved a sigh and felt a little silly about all the canned food in the basement, the damn thing burst.
While everyone was busy fretting about the possibility of rising sea levels, no one was paying attention to a rapidly rising real estate bubble. People were putting solar panels on over-valued houses bought with ARMs and buying hybrid SUVs with the money they'd taken out in home equity. Consumed with environmental urgency, caught up in the charisma of a former VP and a few celebrities without so much as undergraduate level educations, people vowed to turn out the lights and recycle and stem the tide of environmental degradation. But none of them paid attention to the economic degradation just ahead; the degradation they were contributing to by paying absurd prices for real estate on badly borrowed money.
Of course, now everyone is going doomsday about the economy. And while it is potentially Really Bad, for the majority of people Really Bad means spending $1 for coffee at McDonalds instead of getting a $4 latte at Starbucks every day. It means getting rid of the fancy new SUV because you can't afford the gas and maintence anymore, and driving a sensible fuel-efficient vehicle, bought used. It means fewer if any trips to the mall for new clothes, new electronic gadgets, new music. It means a more modest vacation, or maybe even a year without one. It means buying real food and learning to cook, instead of buying pricey processed stuff, or going out and taking out every night.
In short, a recession is when a consumer orgy comes to a kind of standstill, and everyone reevaluates what they really need to spend money on in order to spend less money. Even though it's easy to mistake the decline of Starbucks for the decline of Western civilization, it's hardly the end of the world.