How many times have you heard, “it’s the economy” or “it’s a bad economy,” or even “the economy is crumbling” over the last year or two? What was an absolute line of nonsense has actually become a self-fulfilling prophecy due to its repetition and lack of challenge. When things started blowing up in the banking sector, everyone started playing “Chicken Little,” running around crying that the sky was falling. This illogical exaggeration has created an environment of panic and fear, and this is what is killing a once robust economy. We can absolutely turn this around, but I’m getting ahead of myself.
Let’s back up a for a moment and look logically at a close corollary. When a given sector of the economy inflates a non-sustainable bubble, it inevitably pops. We saw this with the “Tech Bubble.” When the Tech Bubble popped in March of 2000, people lost jobs and money, and everyone appropriately pinned it on the “pump and dump,” IPO Lottery mentality of the Tech Sector. The downturn was appropriately compartmentalized, and effectively “quarantined.” Nobody called it a recession or The Economy.
When the banking/credit/lending bubble popped in 2008, rather than appropriately pinning it on the irresponsible practices of ONE Sector of the economy, the banks and the media painted this sector as The Economy, and everyone’s problem. That was actually a lie. (BTW, can you imagine being able to claim bankruptcy because you only made few billion dollars, or a 45% increased profit over the year before?) Of course not; you’re not a bank. At least Standard Oil didn’t file when they broke the Guinness Book of Records for profits in a single quarter.