no recession

It's not as bad as you think--it's just your genetic pessimism

I really enjoyed this recent article from Opinion Journal. If you think of yourself as a concerned Christian, you really ought to give it a look. I have always thought that the problems that our generation faces, while serious, in the scope of human history, are relatively good problems to have. Our focus on global environmental problems is a luxury that many in the developing world do not have (they rather are focused on more local problems that are actually lilling people by the millions--for example, parts per million of arsenic in water is a hot political topic even though we have no evidence that it has harmed anyone. Water in many parts of the world, however, is so tainted with feces that you can taste it, and people are dying from the diseases it causes). The book that this article reviews argues that we are genetically programmed to inflate whatever problems we face into epic perportions without comparing them to problems that other generations have faced.

This comports with a lot of what I have learned in my limited but enthusiastic study of behavioral economics. This paper (pdf) argues that many of our errors in maximizing utility (which traditional economic theory assumes we do) stems from incorporating the past into the background of our lives and being overly focused on the present. For example, why do we continue to think that our upcoming purchase will make us happy when we have been wrong about that so many times in the past? What we often do is incorporate the last thing that we thought would make us happy into the background of our lives and look from something to replace it. It makes sense then that we would do that with our problems as well as the things we want.