Coffee in a Cardboard Cup

So now that the banks are actually getting their hands on some of that $700 billion in government bailout money, we'll see if it's going to alleviate the financial crisis (CRISIS! That's kind of fun—maybe I should make this a tabloid) that's been the big story this year. (So far: maybe, maybe not.) Voices on all sides have been screaming that the bailout plan is neither fair nor equitable, and I wholeheartedly agree, but my hopelessly fiscally pragmatic brain does keep injecting the caveats that a) the alternative is another depression, which, according to my grandparents, pretty much sucked, and b) truly fair and equitable depression prevention would require the use of a time machine, which probably—let's face it—would be manufactured in China. So I'm inclined to see this a chance for skill development, in particular a skill that Americans have historically lacked: learn something for the next time around.

One initial takeaway should be a better intuitive sense of what it's like to live in a consumer-driven as opposed to a production-driven economy. In spite of the fact that the American economy has been driven by consumption for well over a century now, my sense is that most people still retain production-based assumptions about the way the economy works. But note that the current difficulties are not the result of people not producing enough stuff—that question hasn't even been on the table. It's that they're not spending enough—the baseline amount of moving money required to keep the economy going is now so high that, if banks stop lending money out for people to spend, there isn't enough money in the system left to move.

Here's an example. In between the U.S. House of Representatives rejecting the bailout and then, a few days later, approving it, one of the data points I heard illustrating the deepening crisis was that McDonald's franchisees were finding it near-impossible to secure small-business loans in order to upgrade their restaurants to include Starbucks-like McCafés. To me, that's the American economy in a nutshell—maintaining a free enough flow of money that people can easily buy and sell stuff they don't really need. I'm not trying to make a moral judgment here. (I love me my small vices and creature comforts, after all.) I am trying to point out that, in a consumer-driven economy, the movement of money is more important than its destination.

Given that this is a classical music blog, I should probably try and connect this with classical music, right? And it's easy. The economic categorization of music is always iffy, but if you look at music as a product rather than a service, it's awfully close to pure consumption. People pay, people get paid, and all for a product that's so intangible it disappears as soon as it's created. (Compare to the main culprit in the current mess, the housing market, in which there are large, physical objects that have depreciated below the paper value of the debt connected with them.) A typical symphonic concert throws producers, consumers, philanthropists, and government funding onto the dance floor with a minimum of financial friction. One of the supposed economic drawbacks of live music has always been that you don't get anything concrete for your money; but given the current molasses-in-January state of the economy, isn't that a simplifying advantage? I smell a marketing opportunity.