New Yorker: Breathers

Breathers
by Adam Gopnik
Every parent knows the moment when a small child hits his forehead on a doorknob, or bumps her chin on the coffee table, and then the long seconds of red-faced anticipation, breath drawn, while everyone waits for the explosion of tears. The moment lasts maybe ten seconds but feels like years, and though the inevitable explosion is, mostly, inevitable, a small part of the parent’s heart hopes that this time the child will somehow compose herself, see that her injury isn’t life-threatening, take a breath, find distraction in a bright, shiny object, and laugh. The response isn’t a reflex—a reflex kicks in, boom, like that—but it isn’t exactly a rational decision, either. It’s an emotional process, one that takes in the costs of crying, the necessity of letting the room know about the injury, the extent of the insult to the child’s dignity, and the proximity of something more interesting in the kid’s line of vision.
The present moment—this strange moment of our common life, suspended between the fall of financial capital and the crowning of a new hope—is something like that waiting-for-the-crying-to-start moment. (Not a few of us are crying already—though, as the rule of life dictates, it’s mostly the little kids who got pushed rather than the big bullies who pushed them.) On the one hand, we have all bumped our foreheads, hard, on the edge of reality. But how bad will the bruise, and the bawling, really be?

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Economies are emotional processes. The child’s gasp is its first try at an economic act, with utility, emotion, fear, and calculation all boxed up in a single red-faced package. Consumers have stopped consuming, the papers say, for the same reason that the child has decided to cry: I’m really damaged, we want the world to know; attention must be paid. The stimulus package to come is meant to serve as our shiny distraction on the horizon, to induce us to think, O.K., maybe it’s not that bad—I may as well take a breath and shop. When you turn to wise men for wisdom now, you learn that feelings—the interplay of fear and faith—generally trump rational economic decisions. The psychology of bump and wait and cry, it turns out, always trumps political economy—or, rather, it is political economy.
Far from adjusting our expenditures to the needs of the moment, it seems, we tend to wildly overswing, according to our mood. The difference between the provident ant, who cautiously saves up for winter, and the carefree grasshopper, dancing and hopping, is a matter of what Keynes called “animal spirits.” It is better for the common lot if each of us is a hopper (and a shopper) rather than a hoarder. Being a nation of grasshoppers is allied to being a nation of hope.
The seasonal classics demonstrate the same truth. In “It’s a Wonderful Life,” George Bailey’s Building & Loan is, let us recall, the reckless banker of Bedford Falls, giving what would now be called subprime mortgages to people like Mr. Martini, who would be better off renting. And it is mean, miserable old Mr. Potter who berates Bailey for the practice. “And what does that get us?” Potter asks. “A discontented, lazy rabble instead of a thrifty working class.” But George’s answer speaks to the larger emotional notion of what makes economies work and what economies are for: “Doesn’t it make them better citizens? Doesn’t it make them better customers? . . . Just remember this, Mr. Potter, that this rabble you’re talking about . . . they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?”
What we missed in holiday seasons past is that Potter, snarling and bald, was right. George was making a lot of imprudent loans. But George was right, too. Prudence is a virtue, but it’s not a precondition for prosperity, or a practical cure for hard times. When George and Uncle Billy prevent a run on the bank by urging people to withdraw not all the money they had invested in the Building & Loan but just what they need to tide them over, he is persuading them to act not as rational-economic man but as social-emotional man. What makes Bedford Falls thrive is people feeling good about its future. George Bailey is a Capraesque Keynesian through and through, encouraging consumption rather than thrift, and hope rooted in the common purpose rather than fear rooted in the impoverishment of capital. (For the past few years, of course, Potter’s grandson has been living in Tribeca and slicing up Bedford Falls mortgages into tranches for sale in Düsseldorf, while George’s granddaughter has been running the Costco outside Bedford Falls, but the lesson is the same.)
An economy is not a rational model; it’s an emotional muddle. It depends on how you feel about your neighbors, about next year’s hopes, and about Mr. Martini. Which is why another new President once warned against fearing fear, and why the only thing that can cause us to panic now is panic. There is something faintly encouraging, just barely hopeful, in the human familiarity of the counsel being given by the Keynesian economists. For what they are telling us is just what the parent, in that long bad moment, wishes for the child: Take a deep breath. Look at the ornaments! Don’t cry. ♦