The end of the world as we know it, or cultural renaissance? You decide.

The paradox between the economic disaster of the 1930s-40s and the flowering of cultural achievement in that era has been often commented upon. We get writers like Henry Miller, Ernest Hemingway, Zora Neale Hurston, TS Elliot, ee cummings, Langston Hughes, etc... And artistic movements from documentary realism to expressionism and surrealism. Not to mention the music, this was the golden age of Jazz/swing and the first time marginal genres like folk and country received much wider appreciation. And the same goes for Hollywood and theater in general. How did so much artistic creation rise out of the wide-spread poverty and despair of the first great depression?

There are many answers to that question. For example, there were WPA programs like the Federal Theater Project that funded local theater groups. There was no TV, so people were more likely to get out of their houses in search for entertainment. And 1933 saw the end of prohibition, making night clubs and dance halls possible.  

Beyond the misery produced by such economic downturns, there are other less negative effects as well. When business is slow, or non-existent, people may have more time on their hands. More time to think and create and/or more time to appreciate music, art, theater and writing--the former may also be encouraged by economic imperative, the latter motivated by a desire to escape the confines of their situation. 

Today, our cable TV and the internet are a mixed blessing. These are relatively inexpensive sources of endless entertainment, which can be a good thing when you are too broke to go out. But they are also easy, habit-forming options for unimaginative, and this could wind up being a detriment to the growth of our cultural resources, and a drag on the recovery of the economy as a whole.  But, who knows, perhaps folks will take their economic stimulus (in the form of paycheck tax reductions) and go buy a book, see a theater production or a band--supporting the artistic rebirth of the early millennium, an historical event that our great grandchildren will point to as evidence of our collective cultural sophistication and elan.  

Economic terrorism?

I was half-listening to the news the other day when a concerned security analyst mentioned that not only has the economic crisis risen higher on the priority list of security-minded government agencies and think tanks, it has surpassed terrorism as a threat to our nation. This made sense to me. Poor countries tend to be more unstable and the ensuing social unrest due to the inability of governments to promote prosperity has toppled many a regime in the past. But then the analyst began talking about economic terrorism in relation to countries like China. The idea is that China could do sneaky things like stop buying our government bonds or, worse, start cashing them in. This would in turn destabilize our already stressed economic system and lead to some unspoken cataclysm. 

There are several obfuscations going on in this line of discussion. First, through a kind of willful ignorance that borders on the criminal,  regulatory agencies in the United States government let the dogs run wild on Wall Street and in the banks for years. If there is a culprit in the current crisis, an underwriter of the current global social and economic chaos, if you will, it is the US. It seems kind of, well, predictable, that in the middle of a mess of our own creation, government officials would start fishing for a new, immediate, less tired, distraction for people to get worked up over. Second, the exact definition of economic terrorism is left open. Some say that an economic terrorist must be a non-state actor bent on wrecking havoc on our economy. Others use the term to indicate states that might use economic means to weaken our position in the world. In using the first definition, I give you Lehman, Abermoff, Stanford. In using the second, may I present the Clinton and Bush administrations. Finally, as this meltdown is really a problem with an economic philosophy that has prevailed in many countries, especially over the last twenty years, it would be more than a little ironic to begin fingering so-called communist nations like China. If there is such an animal as economic terrorism, the US would do well to adopt a more humble posture.   

When to invest?

Conventional wisdom says, "Buy low, sell high," and I have been content to do just that. As the stock market has slid repeatedly since fall of 2008, I have thought that, despite everything, I have time and the market will turn around before I am ready to cash out. So, a few weeks ago as the DOW hovered around 8500, I upped my 401K contribution. Buy cheap! But lately I have started to look my ignorance in the face. Sure, it's nice to buy low, but what happens to stocks that I own when businesses go bust? What happens to stocks that I own when they change status from blue chip to penny stocks? Or, more darkly, what happens to my nest egg if the whole thing implodes? Considering my misgivings about our collective return to the roaring 90s or the go-go 2000s, is there any wisdom in investing at all? 

Don't get me wrong, I am not one of the buy-gold-now! types, and generally speaking I am confident that after we have bled the system of its poison (bad debt, toxic mortgages, etc.) things will turn around. My hope is that the turmoil of the next few years will be, if not a positive experience (especially taken individually), for our collective betterment. We need to slow down and find value in the myriad things that cannot be purchased--I believe that our survival depends on this. That said, I am a frugal fellow and the idea of tossing my hard-earned shekels down a rat-hole makes me queasy. So, any ideas? Continue to invest? Stop investing in stocks and buy wines (actually a bad investment for me, I like wine too much) or spend my investment dollars on all manner of immediate gratification?