Sunday, July 22 , 2018, 12:12 am | Fair 66º


Commentary: An Age of Moderation?

The most important stimulus right now is the reawakening of our inner responsibility.

In this winter of our economic discontent, the signs of the recession are omnipresent and disquieting.

Whether we read news online or on paper, or shop, or engage in polite conversation with our neighbors or co-workers, or travel for pleasure or business, the result is the same. We learn of layoffs, we hear of and see fewer customers in the stores and businesses we are familiar with, and we see less money in our own bank and retirement accounts.

Amid all of this humbling news, it is not the stunning rapidity with which the economic meltdown has occurred that most surprises or troubles us, but the utter sense of being disconnected from the maelstrom in which we find ourselves. We are perplexed. We do not understand what caused the national and international financial problems we now see, we do not know how long the downturn will last, and we cannot conceive how this careening situation will be righted. We are quietly fearful that this recession may last longer than anyone has been willing to admit. We feel impotent and powerless. So, we look to someone or something to put our trust in, and turn thus to our new government with its promising young leader. We listen intently to the debate about the government’s plan to spend billions of dollars with the promise of stimulating our economy.

However, as we read of the proposed stimulus package with the vast amount of monies to be expended and the debt to be incurred, do we also experience a nagging feeling that perhaps this action, and any other governmental response, may not be adequate for the task? That sense of foreboding is occasioned by the questions in our minds.

Do our government and its leaders bear some of the blame for the mess we are in now? Did the political elite encourage the relaxing of home loan standards so more and more low-income individuals could participate in the American dream of owning a house? Did they lessen regulation of many of our financial institutions and of the complex products and instruments created by those brights on Wall Street? Did Congress continue to spend like the proverbial drunken sailor, with and without earmarks, such that the national debt has increased to unimaginable heights?

Did our business leaders contribute to and encourage the age of excess, with lavish corporate lifestyles, questionable compensation packages, astronomical bonuses, and the siren call from Madison Avenue to simply have and spend more?

And now we are told by these same individuals and institutions that this nation’s financial health is overwhelmingly dependent on a consumer-based economy and that the only solution to pull us out of the recession is for us, and our government, to spend more money and incur more debt.

But what if our individual and institutional choices and spending habits, with the attendant dependence on more and more debt, were the very acts and decisions that took us over the cliff?

Deep in the marrow of our collective national experience we have instinctively known for the past dozen or more years that the emperor wore no clothes and that something was terribly amiss with a culture in which individual lifes and the nation’s operations were based on spending more than we have. However, we did not heed that other voice and thus confused our wants with our needs. We were seduced by the call of a better lifestyle and more things, by acquisition and by greed. We were told we could have it all and that debt was good — maybe even tax deductible! What was wrong with renting a storage unit three miles from our house for all the things we did not use or need, much less have space for?

Some thoughts: Out of necessity and often harsh experience, we are now listening to that quiet voice of moderation that was previously drowned out by the noise of the age of excess. We are coming to realize that the financial decisions we made as individuals, often against our better judgment or upbringing, were one of the causes of the present economic mess. Yes, we are not all victims. So, we are becoming more prudent, trying to live within our means, and saving more and spending less. We are told these actions may impede the economic turnaround, but we have no choice — moderation is now vital to our own survival.

Will these new habits of moderation endure? The answer, of course, depends on the length of the recession. But, what is safe to predict is this. If the recession is long and deep, then today’s experiences of living with less will become ingrained habits. For, just as our grandparents and parents, and some of us, were forever molded by the scarring experience of the Great Depression, so, too, will our generation be tested and shaped by the anvil heat of a second great depression. That experience will inevitably affect all of our future financial decisions, both great and small, and be the moving force of a possible era of moderation.

To the ancient Greeks, moderation was a principle of life embodied in the famous Delphic inscription, “nothing in excess.” To Aristotle, virtue was a kind of moderation since it aimed for a balance between excess and deficiency.

Only time will tell whether this nation will ever see an age of moderation, or its people adopt moderation as a virtue or principle of life. What can be said is that if such an era is ever reached, it will bring about far more profound changes to this nation and our daily lifes than all of the promises of change made in the past election.

David Hughes is a retired partner at Price, Postel & Parma.

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