Hello Etsy Recap: The USA Owes $12 Trillion Dollars, or “The Fragile Economy” with Alex Blumberg

I still can’t believe I’m recapping the first session on Saturday, March 22, 2013 at Hello Etsy. It seems even more surreal that I write this on August 1st, almost 4.5 months later. I may be recapping Hello Etsy 2013 until the next event. I’ll try, for your sake, to not drag it on that long.

In our last recap, we discussed an animal researcher’s take on economics. Dr. Laurie Santos showed us how emotions and logic come together and are both similar and different when our closest animal relatives handle money. Her presentation was interesting, funny at times, and enlightening on how money can change everything we think we know.

It was a great segue to the next segment in that session titled “The Fragile Economy” by financial journalist and producer, Alex Blumberg, host of NPR’s Planet Money, hit the audience with some harsh realities with data he’s collected while spending his career investigating the myriad of pieces and processes that comprise our economy.

More so, he made this gal, who used to rely so heavily on credit cards, see the economic world in a completely different way.

I apologize for the bad Instagram photo here. But this was Alex Blumberg with an IOU from the US Government to China. Hilarious!

Did you know that the USA owes $12 trillion to the rest of the World? Don’t worry. I didn’t know that either. I knew we were in massive amounts of debt thanks to media reports, but I had no idea it was that large.

Did you know that $4 trillion is owed to retirees through Social Security? Yep, another issue I was aware of, but didn’t realize the largeness of that one either.

Did you know that we’re at 100% GDP right now? SCARY! Even scarier – In 20 years more money will be going out to people retired instead of more money coming in to build the reserve. Meaning that going forward, money is going to be added to the deficit.

Mr. Blumberg then went on to discuss the situation with saving, lending, and credit cards. This, readers, is where my heart skipped a beat and I felt a twinge guilty. In fact, I want to apologize to all of you who have helped me in my past years live a lifestyle of overabundance that I couldn’t afford. I am so sorry.

And believe me when I say that I am working on correcting the situation and paying you all back for your help. At this point, Mr. Blumberg said that we are always lending our money. Our savings are not our savings; they in fact become money that is lent to other people therefore making the fragile economy. Yup!

In other words, we are all part of this gigantic game of saving and lending. Credit cards are a great example of this. Credit cards allow people to overspend. When someone who has saved their money issues credit card spenders money to borrow so they can buy something they can’t afford.

This is why I just apologized earlier. That was a sincere apology because I had no idea when I was 18 and signed up for credit cards to help the George Washington University’s Softball league raise money for their team, that all the money I charged on them was really money borrowed from someone else. Never crossed my mind.

And then he gave the following bomb, at least I thought it was a bomb: Any time you borrow money, you are speculating. What we need is true speculation, not fake speculation. True speculation involves a more realistic understanding of our economics, both on a large scale (Country and World) and a personal level (bank accounts, wallets, savings accounts, and retirement funds).

As he continued, he discussed how all of this has created a lull that people have fallen into that the wealth in the World is a safe - that our economy is safe, but all the wealth that we see if in fact fake. We create and place the societal value of wealth and right now, we cannot continue in this way if we’re going to fix the economy.

Another way of considering this is, confirmation biases are dangerous and they are one of the most dangerous practices out there.” Pretty much the culture we find ourselves in is one of the most dangerous. SCARY!

Okay, so enough of the scary talk. How do we change this?  Well Mr. Bumberg already told us we need to change our speculation, but that’s not an easy thing to do.

As I’ve considered this, I’ve thought a lot about an old argument I used to have with a friend when I got involved in environmentalism years ago. We would go back and forth on the idea of capitalism and stuff and she would always end up saying, “Sara, you have no right to tell people in poorer countries who are just starting to thrive that they can not have what you’ve had because of the environment. It’s not fair.”

I would always pause and fight back with, “Yes, but what if we made stuff less cool? What if it didn’t become this “keeping up with the joneses” mentality and where we could collectively decide that for the sake of humanity and animals and the planet, we don’t make and sell garbage and instead focus on the necessities and things that are of quality and make people feel good, instead of cheap labored clothing and shoes and phones that only has one goal and that is money?”

I think about this because it’s essentially the Etsy global market place. It is the idea that we can shape the economy and make deep impressions with goods that promote engagement and connection between two individuals, the customer and the maker.

It is largely based on appreciation and the moment, not the future, and not on borrowed terms or money.

When I look at this as an artist and maker, I am aware that my invitations may cost a small fortune for some, but the value behind them is great. I spend hours working on an entire order, from the minute I exchange an email with the customer to the finale, which can be via mail, or in-person, drop off.

In many cases, I believe that my customers are my friends. As a matter of fact, a customer I am finishing up a custom order with offered me a table, she and her fiancé no longer need, because I recently moved into an apartment with no furniture; an amazing exchange of kindness and an act of friendship.

More importantly, I see the transaction as representation of combined art. While I get paid for my time, as any artist should, I feel wealthier for the experience – at knowing that my work is going out into the world with love and happiness and that that will inspire and maybe even cheer up someone out there. That to me is wealth and because of that, I look at my materials and how they are made (spurred me to go to Japan to learn paper making, but more on that at a later date), I look at my impact on printing, I look for alternatives for glue, etc.

I’m not saying we should all be this way, but I am saying that if we look at our work, motivations, and our desire to change the economy and how the current economy operates, we can start with our own money habits and in our business habits, too.

This is largely why, I have stopped using credit cards and why I’m more inclined to stash my cash in a box under my bed (okay, I’m not doing that yet, but I’ve considered it on several occasions).

It is also why I am trying to figure out how best to understand my understanding of my own economic status and how that will affect the greater economic fabric. That is how I believe we can change the conversation on the economy. Instead of pointing fingers, I say we apologize to each other for taking way too many risks and get to the heart of what we value as entrepreneurs, makers, business owners, motivators, customers, workers, and as a global community.

Seems idealistic, but maybe that will help us see the enormity of 12 trillion dollars and own up to finding a solution. Call me an idealist, but I believe the not-so-secret recipe in fixing most problems is ¼ cup self-reflection+ ¼ cup self-awareness + ½ cup working with others for the greater good.

If you’ve got any other recipes you’d like me to consider, or share, please put them below. Mr. Blumberg’s presentation really got to me and I’d love to read/hear your thoughts.

Next time, we’ll recap session two. We're getting there, friends!


S2 Stationery and Design // Sara S2 Stationery and Design

Hello Etsy Recap: "Overcoming Your Monkey Mind" by Dr. Laurie Santos - Really!

In my last recap of Hello Etsy, we discussed the very inspiring and urgent economic presentation of Stewart Wallis of the New Economics Foundation.  After his 30-minute discussion, he was followed by Dr. Laurie Santos, Director of Comparative Cognition Laboratory and Associate Professor in the Department of Psychology at Yale University.  Dr. Santos studies why humans repeatedly make the same irrational decisions.

Dr. Santos started the presentation by sharing her reasons for exploring this topic:

  • Origins that make people tick
  • Understand history
  • Understand our constraints

or put in another way, "If you put animals in the same situations as humans, would they make the same things over and over?" 

Using our closest animal counterparts, she conducts research on monkeys to see how their behavior and our own irrational behavior are linked.  Using recent examples such as the financial collapse, climate change, and other global issues we have faced in the last five years and are still facing, she shared with us that while research shows that while monkeys do make many of the same economic decision biases as humans, humans do have some that are totally unique to us.    

Below is a video of a TED talk that Dr. Santos gave three years ago, back in July 2010 that discusses her study of the monkeys with money that they introduced to them for them to use to purchase food at a market.  At around the 7:05 mark in the video, she shares a clip of research in action. When she shared the clip with the attendees, we erupted in laughter, but mostly out of understanding.  Money can bring out the worst in us as well as monkeys, even though they had never had such exposure.

Our key difference is how we share.  We have been sharing what is in our heads for sharings sake forever and no other animal does this. As an example, she mentioned the story of William Henry Fox Talbotthe British inventor known for inventing the photographic negative.

He invented his tool because of a scene he attempted to replicate via pencil and paper while on his honeymoon. His dislike of his sketch led him to develop what became the photographic negative and gave way to what we know as photography.  This need to share and create is what generates new technologies, like Etsy, Facebook, or even Instagram as a way to spontaneously share.

Dr. Santos comes to the conclusion that while we are different, what links us similarly is genetic evolution. The reason that our monkey counterparts master the art of using money and make the same mistakes that we do, even with little training is really a part of how we evolved.  And this means that it is really hard to overcome, which is why we react more risky when we're faced with our biases.

At this point she mentioned climate change by way of saying it is why even though our summers are getting hotter, our ice is melting, our natural disasters are more, we don't believe or do anything about it because it's relative. It is happening, but it's not happening to us. Our biases are different because we're not experiencing loss aversion (which we hate!), directly. Climate change for many is not like watching our stock market crash or having your checking account in the red, and therefore we can avoid it and put it off for the future.

The positive in all of this, is that we are changeable creatures. We are incredibly inspirational and like William Henry Fox Talbot, our need to share and trust, even with making the same mistakes again and again and again, allows us to find ways to break from our biases and do good things. 

I know you're wondering how does this have anything to do with Etsy? 

The answer is simple - we have still a long way to go to evolve, but at this point, and with tools like Etsy, we are connecting in good (and bad) ways unlike ever before and we can continue to create goods, technologies, and share our stories and experiences as a means to inspire those to come.  Etsy is doing that, and you are too, as part of the global Etsy community.

Writing this post today made me remember my own financial promises to myself during her presentation. It was easy to listen to her and think of the wealthy that have lost money, but I could see where my own biases come into play and how on a daily basis I make decisions that are risky when I shouldn't.  It's all about perspective after all. I wish you all better choices, continued evolution, and greater sharing with those you know and love.

As always, please leave your thoughts in the comments. I'd love to hear your thoughts on Dr. Santo's thought provoking research.  Until next time!

Hello Etsy Recap: "Good Jobs, Good Business, & Good Markets" - Good Economics According to Stewart Wallis

Stewart Wallis, Executive Director of the New Economics Foundation, and a jovial Brit, was one of three 30-minute presentations in the first opening session on Saturday, March 23rd, titled  "Reimagining Economy."  Mr. Wallis's presentation was the first of the three panelists and was not just a great intro to the day, but a great follow-up to Mr. Rifkin's keynote address the night before. In other words, anyone who may have been lost in Mr. Rifkin's session the previous night, got a lot more clarity the next morning thanks to Mr. Wallis.

Now, he talked more than just economics. He talked about environmental concerns, climate change, and the impact we have on these through the current state of our economics.  So lets get the economics over with. I don't think you really want me to go on and on about economics (I should note, I didn't do too well in my college economics class, but that's because I was tired and had no clue I would be in the business world to the extent that I am now. Age and wisdom is an amazing thing, no?), especially when Hello Etsy covered a great mix of topics and I'm itching to share those with you, too!

Stewart Wallis's main presentation was on what he calls, "the four U's" that are interlinked and causing systemic problems in our economies:

Unsustainable, Unstable, Unfair, and Unhappy.  As any good Economist, he threw out the following data to back up these U's:

  • We've been on the planet for 175,000 years;
  • In 1975 we were using what the planet had to offer. Now, we've exceeded it by 50%;
  • Over the last 23 years, 80% of real new income created in USA went to the top 1%;
  • Top 400 Americans have more wealth than bottom 155 million Americans;

Daunting to think about isn't it to read this?  I mean, how is it possible that 400 Americans have more wealth than 155 million Americans?! (Readers outside of the US, I am sorry to be honing in on America's problems, especially when we can look all over the world and see employment and economic concerns for humanity as a whole.)  Even more so, how is it that we've exceeded the Planet's offerings by 50% in 38 years?

Mr. Wallis went on to say that we've moved beyond "trickle down economics." No longer is it feasible to even consider the idea that tax breaks of other economic benefits provided by the US government to businesses and the wealthy, will improve the economy, or benefit the poorer members of society.  The reason why we've moved beyond this is according to Mr. Wallis because economics doesn't recognize resilience, not to mention the way it is currently being practiced is morally and ethically corrupt. To drive it further, he said, "currently, markets are considered a religion and that's bad!" Amen!

He went on to explain that everyone should have a living wage and that corporations, if you work for one, should be providing that.  Instead, we live in a society where salaries reflect scarcity and scarcity creates over consumption and lack of opportunity in everything (education, medical care, food, and money).  If you've ever watched a show about obsessive couponers or hoarders, you know what I'm talking about. It's why Walmart and Dollar stores do so well.  When people believe that things are scarce, their actions mimic that belief.

These beliefs and actions are what is spinning our commodity driven world to chaos and why we now, have exceeded the limitations of the planet in the last 38 years.  It is why our oceans are with dangerously low levels of fish, polar bears are dying in the Arctic, bee populations are dying, and we, humans, are besieged with medical problems. Our systems are polluted thanks to our actions.

Etsy sellers and buyers are changing this, though. The Internet is helping to change this. Think about the shift we are part of, that is helping give back that sense of value to others.

So how do we change all of this? 

According to Mr. Wallis change comes in three ways. The first being, the critical challenge of -

"how do we provide enough good jobs while remaining within planetary limits?"- the remaining two fold into this challenge. 

The answers to his critical challenge are many, but fairly simple:

  1. Shift in values - we must become stewards not consumers
  2. Shift in goals
  3. Shift in measurement
  4. Strong local economies
  5. Replenishing and enhancing natural capital
  6. Public service reform
  7. Strategic Governance
  8. Banking Reform (Markets as servants, power in markets, and tackling inequality)

All of these can be answered in how we see work. If you work for a company, that becomes how you are treated by that company. If you own your own business, that becomes how you treat yourself, your customers and business partners, and should you have any, employees.  This also means how you see your own relationship with money and the economy.   Mr. Wallis's list of what makes a good company, good includes the following:

  • Maximize returns to scarce ecological resource
  • Good job creation as a goal
  • Employees are seen as an asset and equity holders, not costs
  • Value of company is reflective of value created or destroyed

As for the changes necessary for the long term, to save the Planet, to get us back within planetary limitations, and to save ourselves, our values, and our happiness, we need to demand the following:

  • Countering Short termism
  • Changes to taxes and incentives
  • One bottom line that includes social and environmental as well as economic
  • Structure and diversity changes
  • Banking and finance reform

What is your part in making these changes?  You can begin by paying attention to you:

  • Your work
  • Your lives and communities
  • What you buy
  • What you demand

With those four points, Mr. Wallis ended with saying, CREATE A MOMENT OF CHANGE!

This may seem impossible, but it isn't. He's absolutely right! We can create a moment of change within our own world which will impact all those that we come into contact with, do business with, and share our products with (if you are an Etsy seller, or a buyer of Etsy sellers).  These actions will inspire others and before you know it, we're all humming a similar tune, a tune of change.

While doing research for this post, I came across a recent (today!) TEDxExeter talk that Mr. Wallis did much like his presentation at Hello Etsy.  I highly recommend you watch it, especially if you're interested in hear more than reading bullet points.

Next month, I'll cover another presenter from Hello Etsy. Until then, I hope you'll join me in becoming a steward!

As always, if you have any comments, or suggestions, leave them below.  Lets do this!