Recession, depression...it's not as bad as you think

This is a rejoinder to my earlier post "unemployment, it's worse than you think." I try to steer clear of downer posts--there is enough negativity out there as it is. So, here is more optimistic look at economic disaster...

As everyone knows, a recession is a period of economic contraction--the opposite of what we have been experiencing since the mid-1990s. Economic indicators like the GDP, consumer spending and interest rates head south, while prices and unemployment rise. As bad as this is, economic contraction does have its up side, let me enumerate:

1) Recessions and depressions are a reality check. When speculation, "irrational exuberance", hype and insanity create a bubble, economic downturns remind us that market value, while not divorced from our mental states, cannot be separated for long from some kind of base reality. For example, that house you bought for $120,000 ten years ago probably is not really worth the half-million zillow.com would have you believe. The stock market does not only go up and probably does not make for the best retirement strategy. And China will not always and forever manufacture cheap goods for our stores.

2) Economic contraction is an opportunity to rationalize our household spending habits and adopt a boy-scout attitude toward future instability. Just because credit is easy to come by doesn't mean that we should continue to apply for all those pre-approved credit card applications. Eating out five times a week may save us time, but it costs... a lot (especially when the bill goes on the Visa). And the shop-a-holic lifestyle can be seen for what it truly is, a symptom of much deeper personal and social pathos.   

3) An economic depression offers the opportunity to consume less. Consumerism is not only the motor for the global economy, it also has been the driving force behind environmental destruction. Globally speaking, the air, water, topsoil, oceans, forests, etc... are all in a state of degradation unparalleled in modern history. An example from my neck of the woods: due to the housing bubble there has been a constant drive to build more subdivisions--plowing under much of the local forestlands that made this portion of Southeast Virginia so appealing. But rustic aesthetics aside, this is a major migration route for all kinds of birds. The lack of trees here impacts food and shelter requirements for these flocks and results in fewer birds making their destinations. Perhaps with the economic meltdown we can convince our city planners that unchecked development has a downside: environmental degradation, a decrease in local appeal (which drives property values down even further when there are so many empty houses--when one has so many choices as to where to buy a new home, why chose to live in a city that has all the attraction of a strip mall?) and not to mention a huge surplus of empty houses on the market.

4) Finally, an economic downturn gives everyone an opportunity to be more socially expansive--to rediscover the value in human relationships in our families and our communities. If your hours get cut, you have more time to take the kids out to a high school football game, your spouse to a dance or invite friends over for an evening of cheap wine and good conversation. If you lose your job altogether, you'll need a strong social network to get you through the financial and emotional stress. SO, get expansive during the contraction and reconnect with the social events and relationships that hold real value, a value  that does not diminish with a fall in the DOW.