Family Guy vs. CNN: Which Explains Economics Most Effectively?
“Yeah, and there’s 6 billion things left to name.” Those are the words of Peter Griffin in a Biblical era Family Guy episode, which unspooled recently on the Fox Network. The episode is titled “Holy Bibble.”
Two days later CNN.com led with a headline about a “New threat to the economy. Americans are saving like it’s the 1980s.” Peter Griffin’s line about “6 billion things” and the title for reporter Matt Egan’s piece are economic in nature, but which one teaches us economics, and which one sadly misinforms? The answer is easy. CNN is the source of the faulty information.
The report’s errors are many, but the main one is rooted in the fallacious notion that a “so-called V-shaped recovery can't happen if consumers are sitting on the sidelines.” The previous statement is rooted in the fallacy that consumption powers economic growth. No, it doesn’t.
We all have endless needs, wants and long-term yearnings. All three are limited by our ability to produce first. The more we produce, the more we’re able to consume. Consumption is a consequence of economic growth, not a driver of it as Egan assumes. But for now, we’re getting ahead of ourselves.
It should be stressed first that an economy isn’t some living, breathing blob, or a tangible machine that can be goosed by politicians or central bankers. An economy is just people. It’s individuals. And individuals are surely not harmed by savings. No doubt many individuals wished they had more savings when the hideous lockdowns began; particularly those who lost their jobs amid the tragic imposition of command-and-control by politicians claiming to help us by inducing economic misery.
The main thing is that the “economy” is comprised of individuals. And as individuals are enhanced by their savings, so is the “economy” enhanced. That it benefits is one of those statements of the supremely obvious, and it’s explained by what powers our individual ability to produce.
To be clear, savings massively boost our productive ability. Back in the Biblical era human productive capacity was brutally limited, and it was as a consequence of there being very little savings for the entrepreneurial to draw on in order to innovate. Since most were living the most deprived of existences, savings were a luxury few could afford or imagine. One imagines “savings” wasn’t much of a word, or even used by many back then. Who could save? Life was a daily struggle just to survive. What little anyone had they consumed, thus explaining how little economic growth there was to speak of.
Since there was so little unconsumed wealth, there weren’t savings for innovators to access in order to create tractors, or fertilizer or other technological advances necessary to make it possible for exponentially more food to be made with exponentially fewer hands. A lack of savings meant that nearly everyone had to unproductively work as a farmer to produce very limited amounts of food. That clothes amounted to rags back then wasn’t a fashion statement as much as it was a consequence of nearly all human endeavor being directed toward mere survival. Clothes were covering. Nothing more. Nothing less.
Crucial is that words were surely few in Biblical times simply because there was little to describe, or little variance in life. Without savings enabling the creation of new products and services, and new ways of doing things, words were very few. Conversely, the massive growth of words signals progress.
The reason for the increase in words by the billions over the millennia is a clear result of savings. The use of unspent wealth to create new ways to farm like the wheat thresher (18th century), the tractor (late 19th), and the back hoe (mid 20th) thankfully meant that there could be fewer farmers, and more people doing work commensurate with their talents. And when we do what reinforces our talents, we’re much more productive.
Thankfully, savings enhance our productivity as we do what we’re good at doing. Think Pixar. Founder Ed Catmull’s first computer-animated film (Hand), a four minute production from 1972, required 60,000 minutes of work to make. Thanks to computers that advance the capabilities of their human operators all the time, individuals like Catmull can produce much, much more in a microscopic fraction of the time formerly required. Interesting for the purposes of this piece is that Disney acquired Pixar in 2006, and it’s interesting because Walt Disney himself told animators on the way up to not “be an idiot" about new technologies. "If we’d had those tools then, we would have used them.” Imagine what Disney could have accomplished with more savings allotted to him when he was in his prime in the sense of movies made, and theme parks imagined on the way to their creation….
Looked at in terms of CNN’s perception that savings are a “threat” to recovery, such a view couldn’t be more backwards. Savings quite simply are recovery since they set the stage for the creative to be matched with capital on the way to gargantuan productivity advances. Crucial is that those innovations are expensive in consideration of how few bear fruit. But when they do…As Jeff Bezos has put it, “If you can increase the number of experiments you try from a hundred to a thousands, you dramatically increase the number of innovations you produce.”
CNN and Egan are focused on consumption, and they are because the economists they listen to have mistaken consumption for growth. No. Consumption is the easy part. It’s the production that’s the challenge, which is why savings are so essential. They make production on a massive scale much more likely, which is always and everywhere what precedes consumption.
And which tells us why Family Guy explains economic growth much more correctly relative to fallacy-stalked CNN. Word expansion is yet again a consequence of progress, and progress is a creation of savings that enable entrepreneurs to rewrite the future in amazing ways. Future generations will know that consumption won out over savings if word usage in 2030, 2050 and 2100 resembles that of 2020. A lack of savings threatens us with this kind of depressed outcome.