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A Dread With No Name

December 06, 1987

That wonderful compulsion to seek an explanation--correct or not--for whatever isn't immediately obvious is nowhere more inventively displayed than in efforts to find meaning in the daily twists and turns of the economy.

Was the stock market down yesterday? If it was, you can be sure that a certified expert will come forward to solemnly declare that investors are worried that the dollar's falling value on world currency exchanges will push interest rates higher, encouraging inflation, raising the cost of doing business, lowering profits and thus eventually bringing on recession. All of which is bad news for shareholders. Ah, but what if the market was up today? In that case, an expert can be counted on to say, it is certainly because investors are optimistic that the weaker dollar will make American goods cheaper overseas, thus reducing the trade deficit and ensuring that interest rates can be kept down, minimizing inflation and giving a boost to business profits. All of which is good news for shareholders.

Sometimes, it's interesting to note, it is the same expert who from one day to the next and in shameless disregard of any minimally decent standard of consistency will come up with the contradictory explanations. All of which only suggests that to explain is one thing, to give an explanation is something else. While the former bridges a gap of ignorance, the only point of the latter may be to fill a void of silence, like a guest at a dinner party who starts humming whenever a lag in the conversation occurs.

We're not knocking the contradictory explanations. For one thing, since there's a new one every day, they're not around long enough to become a matter of nagging concern. We do admit, though, to being bothered by the technical jargon that the explainers love to dress up their talk with--all that stuff about leading economic indicators, triple witching hours, basis points, CPI deflators. Our plea would be to keep it simple. It doesn't have to be right--it never is--just simple.

It is with this in mind that we warmly welcome the contribution to the dialogue that has now been made by Jerry Jordan, chief economist of First Interstate Bank in Los Angeles. Asked the other day about the dollar's fall in relation to the yen, the mark, the drachma and who knows what else, Jordan minced no words in going right to the heart of the matter. "There seems," he said, "to be a kind of nameless dread out there."

With those two words, we thought, a great light suddenly appeared in the sky, and a great emptiness was filled. For while nameless dread is not, self-evidently, anything very easily defined, it is something that even the most economically obtuse among us can recognize. Moreover, it has the virtue of providing the perfect explanation for every ambiguous or vaguely negative emotion connected with economics. It is, in short, the all-purpose rubric for bad vibes and general malaise. From now on, and with thanks, we intend to make it our own. When all else fails, when no other explanation can be made to fit, there will always be nameless dread to fall back upon.

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