Amist the past four months of talk about the coming Second Depression, has it every occured to you that perhaps this whole thing is a bit silly? Of course, millions are losing their homes each day, millions more have less value in their house than they used to, thousands are losing jobs, and everyone is terrified of their 401(k) statements. But honestly, at a very core level, don’t we all want the same basic things as we did last year at this time? Don’t we go to our jobs every day, and, basically, aren’t we trying to earn as much money as we reasonably can from said job every day? Don’t we have the same financial goals, or at the very least, set of wants and desires that we did twelve months ago?
Of course, this is where capitalist economies stumble. In your entry-level microeconomics class you probably learned about indifference curves and utility, and how the rational consumer wishes to maximize utility along their indiffernce curves whenever possible. In the real world, however, this all proves to be fancy academic wonderment vaguely trying to explain how average people feel when they make financial decisions. Economists (and analysts, reporters, pundits, etc.) usually miss the point in assuming real-world humans are anything close to rational.
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