What is "The Economy"?

More than a decade ago I sat in a data center staring at a screen containing backup logs for a major agency of a state government. The logs made it clear that backups had been failing for months. My job was to find out what happened. I'm just built to get to the bottom of things, and part of my skill is to take apart the complex, interconnected pieces and find the simple parts. It makes it easier to figure out what happened.

Recently, I've done this with "The Economy."

People, especially experts and those who want to sound knowledgeable, talk about "The Economy" like it's an entity unto itself. Like it has a mind of its own, and it will head in various directions based on select, complex ideas like GDP, trade, and unemployment rates.

But, it's not. "The Economy" is nothing but a set of metrics (values of measurements) that communicate various historical truths (since most measures are 3-12 months ago). Economists, politicians, and pundits all use the numbers to beat up their opponents and to bolster their own theories, with all sides claiming proof for their viewpoints. And it's all mostly a great big show.

"The Economy" is nothing more or less than the collected decisions of human beings, including those responsible for making decision for corporations and governments. People decide to buy, save, or invest. As a result, funds become available as revenue, for loans, or in exchange for equity. The cumulative impact of these decisions results in the measures that become the economic metrics.

Underneath it all, however, are these decisions. They are made in an effort to keep a job, to profit, to look good, or to benefit one's own financial position. Sometimes, the decisions are speculative in the hopes of creating a large, fast gain. Other times, they are extremely conservative in an effort to avoid any risk or any possible loss.

But all of these are the decisions made by individuals and (sometimes) multiple individuals as part of a collective.

That's all "The Economy" is, though. It's the consequences of financial decisions of collections of people: cities, counties, states, countries, and the world.

When people stop spending and/or investing, we have a recession or depression. When business managers stop hiring, joblessness goes up. And so on.

We are a society that attempts to avoid the consequences of our actions. We want to believe that our intentions drive the consequences. They don't. The only thing that drives consequences is the natural laws that apply and the decisions that others make.

You can't escape consequences forever.