On the other side of the Pacific, China’s economy has been slowly grinding to a halt. Greece has been forced to adopt austerity measures in the face of its debt crisis. The United States economy has seen fluctuation as doubt fills the market. These incidents, although prevalent in the news, seem a world away. Why does it matter that China faces economic difficulty as its stocks struggle to reflect the value of the market? Why does it matter that Greece’s economy is in shambles? Why does the US economy’s woes matter? It’s not like it affects us right?
Well, the economy isn’t just colored numbers on a board, no matter how many images of a ticker you’ve seen. It’s not just a place where men in suits shout and wave papers to buy and sell stock. It’s not just a place where fortunes are made. Much like global warming, the economy is a force to be reckoned with. It is the reason behind our global expertise, the reason why foreigners enjoy holding onto American dollars, the reason why we ended up in a debt crisis in 2008. And much like global warming, it has the power to be disastrous. The recession of 2008 is testament to the power of the economy over our lives.
But none of that has answered the question of why we need to care. The economy seems to only require the men in suits to run. The government employs economists; financial institutions employ financial analysts. It doesn’t seem to need our care. But from that point of view, global warming doesn’t either. Politics happens on Capitol Hill, not next door.
But they do matter. Even though we many not be able to directly affect the policy currently being debated on the Hill, just knowing what’s being debated makes us more knowledgeable about the happenings of the country. It’s the country we inherit after all. Global warming is not just a hot issue for the current generation. It’s one of the biggest issues for us going into the future. The economy isn’t just the domain of suits and ties, it will be where we will obtain our loans and store our earnings. What seemingly doesn’t matter today defines our lives tomorrow.
And that’s only looking at the impact these institutions will have on our future. The economy affects us now. The everyday things we buy largely come from China, which keeps prices low . If China continues to struggle, we may experience a disruption in imports and the things we use every day may and will experience price hikes as supply doesn’t match demand.
A lot of the economy is mired in hypotheticals, like the one I just explained. But real examples of the economy are probably much better at elucidating its importance. Take gas prices for instance. Their fluctuations are due to the price of crude of oil shooting up one day and tanking the next (pardon the pun). Currently, the gas around my area is around $2.70, but during the summer, it almost went as high as $4. These prices are a reflection of the supply and demand of crude oil, a commodity on the market.
But what if you don’t drive or do the shopping? What if you’re just a kid who (luckily) doesn’t have to run errands or doesn’t own a car? If you buy lunch, you might have noticed prices slowly creeping up over the years. While some of the phenomenon could be attributed to inflation, a large portion of the increase in prices is due to the school’s use of the opportunity to make more money by charging an extra quarter here and there. What seems like a minuscule amount multiplied over a large number of kids isn’t a petty sum at the end of the day. The school’s ability to look at the market and realize that they could capitalize on student spending is another instance of the economy at work. It might not be in your best interest, but one party has to lost money for the other party to make money.
So in the end, the economy does matter. It’s the “invisible hand” that controls all money related interactions. We might not feel the economic troubles on the other side of the world, but knowing that trouble is brewing is essential to remaining an educated citizen. We might not think too much of fluctuations in gas prices or the upward trend in school lunch prices, but they are the little things that, when compounded, begin to define our lives.