Experimental Economic Theories I

Plainview By Plainview, 25th Jul 2010 | Follow this author | RSS Feed
Posted in Wikinut>Money>Economics

In the great spirit of capitalism, we as people can still only predict and guess as to what the economy will do next, as if it were a ADD 5 year old. Here is my idea as to dissolve some of that doubt.

The Economy

Capitalism, socialism, and communism all have one sole purpose. It is to find a way for people to make transactions for goods and services in an orderly manner. But, as if trying to make the Alps flat, we saw in helpless horror as trends in profits and consumer spending danced like chimps on ecstasy; sometimes high, sometimes low. If you watch the news, you will see both analysts and pundits alike examining the economy in all its wily glory. Due to our failure to develop the power to see the future while evolving, we can only develop theories and strategies to predict the economy. This leaves investors to pit themselves against the hand of fate, and each other, in order to make a profit. In other words, they are sharks trying to take a bite out of anything and everything they can. But what if we could make order out of this feeding frenzy?

Theory: Tis the Season

For the last 60 decades, the modern economy as we know it has been a thing of surprise and mystery. Yet we as Americans know of one season where spending is a moral imperative and failure to do so could be considered an act of treason. The season I write about, of course, is the holidays. It is the proverbial eye of the storm where economists take a reprieve knowing, for once in the entire year, that spending will occur. And that makes people happier. So here is the idea. Instead of people spending whenever a sporadic pay bonus chances by, why not institute a series of "holiday seasons", where a consumer can spend in complete confidence. And in between each season there would be a "recharge" time where consumers would limit their spending to just the necessities. For the purpose of this paper, lets assume that there are four spending seasons in the year that correlate with each season of the year. One of these spending seasons would naturally be relegated to the holidays and winter. The other three spending seasons would have to be assigned a catchy name (i.e. Summer Spending). Anyway, lets say that, for all intents and purposes, that each spending season would last one month. That means there would be two months of minimal spending and more saving. In other words, it would be a harmony and synchronicity between the bear and the bull market.

The Intended (and Possible) Effects

The first, and most important, benefit, is that of clarity and predictability of the economy as a whole. Granted it is not a way to single out any specific stocks as prime targets, but it is a system which would divide the economy between phases of activity and rest.

The second is that it may emphasize monetary responsibility with the 2:1 ratio of rest months to active spending months. Or, on the flip side of the coin, consumers may feel compelled to buy things that they don't need or, worse yet, can't afford. The latter effects have already been seen with the drop in the housing market over the past decade.

Plan in Motion

Although this organized consumerism may seem far fetched, it may not be so far off from common practice. As mentioned before, we already have the holiday season. But lets look at the other seasons that follow. Spring has Easter Holidays as well as as spring break. Summer, again relating to school, is advertised under the titles of "Summer Vacation" and "Fun in the Sun". This is usually followed by summer sales in everything from bathing suits and bikinis to BBQ'ing supplies to the Fourth of July. Finally, fall follows through with two major American holidays; Thanksgiving and Superbowl Sunday. Now, I am not a fan of Football, but even I can't help but root for whatever team comes to my mind first as I peruse the supermarket sales on beer and nacho cheese. Not to leave out Thanksgiving, even I can't help but see families buying enough food to feed half of Africa just to give thanks that the Indians didn't kill us so that our great country could exist (and then conquer them...). Really, all the pieces are in place to put this plan into action. But it will require a certain amount of psychological initiative to make this a reality. It will also require time, and, above all, responsibility on behalf of everyone.


Economic Freedom, Economic Issues, Economic Reformation, Economic Theory, Economic Trends

Meet the author

author avatar Plainview
Ever since grade school, people have come to me seeking help and advise. As a result, I specialize in giving such advise in a down-to-earth and realistic manner. I am also an Eagle Scout and random.

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author avatar drelayaraja
29th Jul 2010 (#)

Nice share.

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