Economic Parables

I have one question.

Where were the protesters when they were getting cheap loans, the values of their houses were shooting up, ipads and other gadgets were being invented and the price going down, their branded clothes looked good in the mirror, and jobs were aplenty?

I never heard anyone complain to me about why things were so good for them, but here’s Economics 101:The economy has its own laws of gravity, what goes up will come down. You can’t toss Newton’s apple in the air and admire how high you can throw it, and then complain the apple fell to the ground. Why do protesters do this about the economy?

Over the weekend, we saw police in New York arrest around 70 people, as the “Occupy Wall Street” protesters moved to Times Square.They say they were protesting on a day of worldwide protests against austerity and what protesters call corporate greed. Protesters chanted: "We got sold out, banks got bailed out" and "All day, all week, occupy Wall Street."

Organisers of the NewYork march from Zuccotti Park in Lower Manhattan to Times Square gasped that about 5,000 people took part. That is only 500 shy of the number of jobs Philips, the electronics giant, announced today they are cutting in Europe. Kind of puts itinto perspective.

The global economy is slowly correcting from a major fall, and many studies have been published saying the cause is lack of demand. This is a little like saying if people don’t wash they start to stink. The real question is this: what causes the lack of demand?

Business activity and confidence is what stimulates the economy, but this won’t happen with the brakes constantly being applied by government, media and even business leaders saying “Woe!” It is the land of the self-fulfilling prophecy. The sight of protests, brinkmanship in Congress and the constant stream of doom and gloom media speculation on the economy has made the American economy self-pitying.

What we are seeing in the protests, the politics and the media chatter, is childishness. Business growth and work will bring the economy back, not government and not bail-outs. The way to growth is confidence, and instead of protesters we need the business leaders and the entrepreneurs and as many others to say “enough, grow up!”

And, oh yeah, when we’re out of this economic mess, there has to be better economic education. People get heated about the need for sex education, religious education, but how often about economic education? The protesters on Wall Street show an astounding ignorance of economics - they need some education.