Freakoutonomics

The NYTimes has an interesting article by Charles Morris about the parallels between (and the likely underpinnings of) the current state of American consumer confidence and consumer confidence experienced in this country in the late 1870s. Morris observes of the 1870s (and today);

Employment grew strongly, faster than the rate of immigration; consumption of food and other goods rose across the board. On a per capita basis, almost all output measures were up spectacularly. By the end of the decade, people were better housed, better clothed and lived on bigger farms. Department stores were popping up even in medium-sized cities. America was transforming into the world's first mass consumer society.

Morris goes on to discuss several economic factors that ate away at consumer confidence in the late 1870s, including a general misunderstanding of the meaning of falling prices for their products, such as grain; the loss of small farms to factory farms; and increased economic volatility as the market became more globalized -- all this despite the rapid increase in the reach and accessibility to all of modern technologies, which most people think is a good thing. Morris concludes;

An economy has psychological or, if you will, spiritual, dimensions. A conviction of fairness, a feeling of not being totally on one's own, a sense of reasonable stability and predictability are all essential components of good economic performance. When they were missing in the 1870's, in the midst of a boom, the populace was brought to the brink of revolt.

I think this article is spot-on target and serves as a powerful warning to the Skillings and the Lays and others out there who earn mega-bucks and still rob their employees (who are stuck working for them for shit wages) because those rich bastards don't think they have enough.

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