Saturday, February 23, 2008

Recession: Expect More Flakiness

When everyone has money and is busy, they don't have time to sweat the small stuff. That cuts both ways. On one hand, they are more likely to overlook details that may matter to someone else. It's not important to them, therefore it just doesn't seem very important, period. On the other hand, if someone does catch them on something they overlooked, they are more inclined to just pay the money or do whatever seems necessary to take care of it in the easiest possible way. It's different when people have less money and more time. They are more likely to notice the details that weren't handled quite right, because now those little amounts of money seem more important. They have the time to fool with the details, and the time to hassle those who aren't paying attention. In this sense, it can be more difficult to get away with small crimes and offenses in hard times. A countervailing factor is that small offenses are likely to be more common in hard times. When everyone has money, it's pretty much assumed that everyone will pay their bills on time, that broken stuff will be fixed properly, and that generally things will work as they should. But when people don't have money, or are afraid of losing what they've got, they are likely to be more flaky. They will want to be adjusting or backing out of deals and looking for squirrely ways to save a buck. Poor countries are not known for their crisp, efficient handling of problems. As more people find it necessary or helpful to scrounge for the occasional extra little bit, it seems likely that corruption and complication will be increasingly likely, in situations where one would not previously have expected such behaviors. It is ironic, because this theory implies that the countries that most desperately need efficiency are least able to achieve it. If this prediction of one aspect of future life in America should prove accurate, it will reflect an unfortunate and ironic fact. There was a long period of time, a half-century or more, in which the U.S. had a unique opportunity to shape the terms of trade around the world. There was sufficient power to make a tremendous impact upon the processing of routine transactions in developing nations -- transactions that sometimes meant everything to the powerless. Rather than stand for corporate power and the accumulation of wealth by a few, the international image of the U.S. could now be that of a power that believed in its touted principles -- of equality, for example, and of the rule of law over all citizens. The current business climate in places like China could have been influenced favorably. Now, instead, the U.S. economy is increasingly at risk of coming to resemble that of a developing nation. Having failed to make the world a better place in this regard, we may find ourselves forced to live in the world we have helped to create.