"The only thing we have to fear is fear itself--nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance."
President Franklin D. Roosevelt uttered these famous words in reference to the Great Depression during his inauguration speech in 1933. With unemployment hovering around 25 percent, and regular news of people starving to death, that year is often regarded as the bleakest of the crisis.It may not be pretty out there, particularly on Wall Street, but 2009 is unlikely to plumb such horrible depths. But Roosevelt's comment on the role of fear in suppressing the markets remains apt.
Today, a Google query on "definition of economy" returns the following result at the top of the search page: "the system of production and distribution and consumption." Accordingly, the entire economy suffers if any one component falters, and these days--put very simply--a sudden halt in consumption, both forced (banks' reluctance to lend) as well as deliberate (individual's decision to be more thrifty), is making things worse.
It's a vicious cycle that won't be easy to end, but I offer some evidence that not all has gone to seed. Consider the United Nations' 2007 State of the Future report, which presents the view that prospects for humanity are relatively rosy, based on an evaluation of key indicators related to global challenges, such as health, education and energy.
Humanity, on the whole, is winning, and the proof is in the numbers:
- Babies born in 1955 had an average life expectancy of 48; in 2025, it's projected to be 73.
- In 1970, approximately 37 percent of people over the age of 15 were illiterate. Today, that's down to 18 percent.
- Between 1999 and 2004, the number of children who didn't receive primary education dropped a significant percentage, from 21 million to 77 million.
- Over the past 30 years, the number of free countries grew from 46 to 90, accounting for 46 percent of the world's population.
- More than 1 billion people (17.5 percent of the world) are connected to the internet, and that number is growing rapidly.
- World poverty will be halved by 2015, and warfare is in sharp decline compared to previous decades.
Sounds good. So in the New Year, let's eat more, drink more and spend a little more money.