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The Daily Wildcat

The Daily Wildcat

 

    Every citizen is a steward of the economy

    According to the National Bureau of Economic Research, the current recession we have been experiencing began in December 2007. Since then, we’ve publicly admonished droves of white-collar “”villains,”” seen our financial institutions dwindle to a state of pseudo-nationalization, and witnessed Alan Greenspan find religion in regulation. This is not inclusive of all that has occurred, but nonetheless, very much indicative of how our capitalist identity is in need of some soul searching. And when it comes to the American sense of individualism and identity, nothing speaks more loudly to how we discover oneself then through our professional careers.

    Regardless of our profession, be it a laborer, artist, teacher, doctor or lawyer, we very much identify with and try to embody the jobs we toil over from 9-5 every weekday. The job or “”specialization”” we pursue is simply the manifestation of our own preferences/choices and in time, we gain knowledge and expertise germane to a particular field. However, on the flipside to the growing trend toward niche expertise and life style professionalism comes the sacrifice of understanding from other fields.

    This is exacerbated in our 21st century economy, where the complexity of operations and competitiveness from global markets doesn’t allow an individual or company to stray too far from its core competency. In the process of baking a loaf of bread, the baker often pays a consultant for research on customer trends, has to outsource the design and marketing of his or her bakery, must purchase ingredients from around the world, and finally must compete with scores of other bakers attempting to do the same.

    The scope of operations is more dynamic than any single flowchart, more myriad of inter-connected businesses then a single supply chain, and in many respects, always beyond each individual’s complete understanding. Along the way, the baker grows to know so much about so little, and in trying to gain his or her identity through one’s labors loses oneself among the cogs and gears of free-market enterprise.

    The complexity of the modern era and market pressure to avoid professional commoditization via niche specialization has forced us to think strategically in terms of our sole profession. This in turn has led to a blind deferment of understanding and decision making to other “”specialists”” as well. The trade-off, or opportunity cost, is that with the premium necessary to be competitive comes the false sense of security parlayed by other professionals that are supposed to serve our needs.

    In light of the economic crisis, this overreliance and head in the sand outlook of many interconnected “”suppliers”” (think mortgage lenders) has made it too easy to develop a culture that defers or exports critical thinking to others more “”specialized”” to do so for us. In losing ourselves in our jobs we allowed our bounded rationality to be more leash than tether and our identity to be defined by our jobs versus our intellects.

    I believe this is a major flaw inherent in our socio-economic system. Many hard-working Americans who produce the goods and services that fuel that economy have deferred their financial well-being to the supposed specialists or financial stewards who invested with impunity. This is a systematic problem of laziness on our part as well as a misguided trust that “”others”” would be our financial caretakers.

    Many of us did not question the role of the central banks, the housing market euphoria, the delusion of limitless credit and the conflicting economic theories that have left us shaking our heads. We were told that the returns of the S&P 500 were not good enough and that risks inherent in more exotic investments meant potential returns and not the downside of potential losses. As we have recently found out, this is not self-sustaining and all the executive titles, MBAs and PhDs never should have silenced our skepticism and convinced us that AAA debt meant jackpot. Many of us have decided to be helpless; this was a decision and a consequence in the same likeness.

    We can no longer be just a society of professionals fulfilling only our patch of the garden. We have to be willing to educate ourselves beyond our paychecks, to be defined by more than our jobs, and to understand more about the processes we take for granted or defer to others. If the economists, fund managers, and the regulators all failed, then where does the blame domino fall next?

    If America is in search of its identity and the truisms of the benefits of free-markets are etched in our values, then maybe the work we do to get out of this recession will be a wake up call to actually understand the system we feed into and take for granted.

    ÿPaul Cervantes is an accounting and business economics senior. He can be reached at letters@wildcat.arizona.edu.

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