The Best of Times
I do think we live in The Best of Times and the current frustration, anger and insecurity is just fear leaving the system. Might sound too philosophical. But think about it: if you are one of the few that didn’t believe in homeownership-at-any-price, credit card debt, over-consumption and corporatism then things are pretty jolly at them moment. We are heading into a deflation cycle that will put price pressure on everything. Owning real assets will suck and being in cash will rock. Everything will get cheaper and that’s a good thing.
Lower prices is great for the younger, entrepreneurial and risk-taking generation. Cool ideas will be cheaper to bring to market. Real need, restrictions and scarcity will drive innovation. “Necessity is the mother of invention” - remember. This is what Joseph Schumpeter called “creative destruction”.
What built the country is crumbling, being outsourced or just not good enough anymore. And that’s a darn good thing as in it’s wake there will be better, smarter and cheaper solutions to solve our problems. It happened in the 1870s, in the 1930s, the 1970s and it’s happening now - big time.
But as humans we have a hard time to let go of what we know or once knew and embrace the future, the insecurity and change. We know what we have but not what we might get. We also suck at history in favor of mythology. The funny thing is that this is nothing new; it’s the natural evolution of humanity. Ebb and flow, growth and contractions, ups and downs.
It only sucks if you are over-leveraged at the wrong times as so many people were in the end of the last growth cycle. This is the real market economy, the real capitalism at it’s best. It’s the new normal. The problem is that we are falling in love with growth and detesting the contraction when we should do the opposite. Like every smart, young entrepreneur is doing right now. The surface might look crappy and the short time view miserable but the water is nice and the future brighter than ever. Embrace it and you’ll realize the we really live in the best of times.
