I'm currently in the 12th day of a 16-day comics buying trip on the East Coast. There's nothing like spending a long period of time in lonely motel rooms to give you an opportunity to reflect on current affairs, not only within my company and the comics industry as a whole, but also over the broader geopolitical world in which we live. I thought I would pass on a few of those macroeconomic reflections to you, as I have been getting a lot of feedback at conventions of late that this is an aspect of my columns that is particularly popular.
I'll start by mentioning the word "stagflation," which appeared in yesterday's USA TODAY. My university studies in economics and finance ended prematurely in part because of this concept (that you can have a recession and inflation at the same time...), because it simply was not in the post-Keynesian textbooks of the early 1970's. When I disagreed with my professors over the simplistic concept that you could have only inflation, or a recession, but not both at the same time, I found my GPA declining precipitously. Within just a couple of years I was proven at least in some measure correct, however, as the "oil shock" of the mid-1970's caused the US economy to go into a savage recession, while simultaneously driving interest rates to above 18%.
If the above scenario sounds familiar, that's because it is precisely where we are right now. What earlier economic theory did not sufficiently take into account was the effect of external cost structures on a domestic economy, such as the price of oil. When the price of externally derived raw materials required to fuel economic growth increase rapidly, the result is severe inflationary pressures, and simultaneous decreases in the overall standard of living. It was exactly this epiphany that also led me to abandon my uber-liberal geopolitical stances of my early college years, in favor of a far more pragmatic acceptance of American economic imperialism. Simply put, I came to realize that there were a very finite number of resources available on the planet, and that if those resources were to ever be apportioned equally, that the standard of living as we know it in the USA would have to decline precipitously. Sharing the world's resources equally may seem morally and ethically correct, but at what point do you really wish to advocate a steeply reduced standard of living for your own children?
All of the above having been said, what dismays me today is that the choice of sharing the world's resources is being rapidly taken away from us. As the rest of the world, and China in particular, start using a greater and greater percentage of the raw materials needed to run an economy, our internal costs for these materials are going to skyrocket. At the same time, unless we can come up with really slick technological innovations (such as the Apple i-Phone that I now cannot believe that I ever lived without...) that we can sell to the rest of the world, we're going to have a smaller and smaller piece of the world economic pie. If you doubt my word, just try taking a trip to Europe. The decline in the US dollar has been so savage over the past five years that all prices in Europe have doubled for us, even before taking inflation into account.
So how does all this geopolitical economic theory fit into the world of comics? From my own perspective, quite well. A lesson that I learned during the recessionary period of the mid-1970's is that most inexpensive entertainment alternatives, including comics, actually sell better during hard times. Collecting recent back issues has become so inexpensive these days that most comics published during the past 20 years can still be purchased for cover price, or less. Compare that cost with one round of golf, or a tank of gas... We are also seeing a huge surge in overseas sales of both new comics and back issues, as the booming economies of Europe and Asia are providing their consumers with plenty of disposable income. Even on the domestic back issue front we are seeing strong new demand for key back issues, as collectors come to realize that high value older comics are an excellent hedge against inflation. All in all, even though this upcoming recession will be throwing all sorts of economic challenges at us, I think that the benefits to most comics retailers will ultimately prove to be greater than the higher costs.
Before I shut down today's column, I did want to toss out a personal opinion about how to solve some of the resource problems that I mentioned above. While I by no means think that technology can solve all of our economic ills, I do think that there are some reasonably easy transitions that we can make to reduce our dependence on foreign resources. The cost of importing energy, in particular, seems like a complete waste to me. As a nation, we came together during the mid-1960's to use insanely primitive technology to reach the goal of putting men on the moon. How is it that we cannot use the same resolve to harness wind and solar energy to both heat our homes, and to fuel our cars? I realize that the process of utilizing these new sources of energy is already in place in some measure, but what I see is a slow transition, without nearly the urgency required by current circumstances. Reducing our importing of oil to zero, without tearing up our entire country with drilling for new supplies of oil and gas, should be our #1 domestic agenda. That would provide our country with an economic stimulus greater than any we've seen since the ending of World War II, and kill stagflation dead as a doornail. If our generation leaves nothing else to America's future, this should be our greatest gift to our children. Give that some thought when the next election rolls around, and try voting for the candidates who really mean it when they say they will push alternative energy sources. The beauty of our political system is that if we all work together, we really CAN change our world...
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