An Iguana of Economics
This odd UPI story provides a nice metaphor for the financial and economic plight Americans find themselves facing this week. Here’s the story:
COVE, England, Sept. 30 (UPI) — Firefighters in Cove, England, said they were called to rescue an iguana trapped 45 feet up in a tree only to find the alleged lizard was a green branch.
An animal rescue officer and an aerial ladder platform team from the fire department were called to the scene by Royal Society for the Prevention of Cruelty to Animals officers, who received calls from residents about a stranded lizard, The Sun reported.
Colin Horwood, the animal rescue officer, said the rescuers made it about 25 feet up on the ladder before they realized the reported distressed lizard was nothing more than a green branch.
“The branch bore a striking resemblance to an iguana from the ground,” Horwood said.
So Americans look up into the economy and see an imperiled creature. (Don’t go the wrong direction for the analogy. The iguana-like branch is not the financial sector of the market. In that analogy, there really would be an iguana stuck there.) They see impending if not already present peril for a huge sector of the economy. They see danger rippling outward to affect even those who do not believe they are standing directly under that segment of the economy.
So they call for help. They say, “please deliver the economy from crisis.” But there is a surprise for any willing to see it. That trapped iguana—the thing whose peril generated all the fear—is, in reality, simply a branch of the overall economy. That is, correction, pain, and retraction (the things actually observed in the tree) are part of a real economy. And while it is possible for the USA FD to allay many fears by sweeping in, pulling out a chainsaw, detaching the branch from its natural habitat, and placing it harmlessly on the ground, such action is neither appropriate to the nature of the tree (the economy) nor will it result in anything but the enabling (in the negative psychological sense) of people who will continue to mis-perceive things from the ground.
I am not underestimating the gravity of the situation. I believe it will be economically devastating to many families to let the economy recover naturally (in a fair and free market) from recent events. I believe it may acutely affect me personally.
But economies include pain. It is a necessary stimulus to make things work correctly. The effort over the past seventy years to eliminate pain from the system has increasingly severed economic practices from economic reality—and fantasies do not work in the real world.
We have cut branches in this tree until the free market is hardly recognizable. Someone please tell the people on the ground it’s a branch, not a lizard, and then leave the branch there.
Tags: Economics
