For weeks now, I’ve been hearing about how the economy is slowing down.

Saturday, February 03, 2001

For weeks now, I’ve been hearing about how the economy is slowing down. I guess I’m supposed to be terrified.

What does this talk mean to the average person? If the average person is like me, it’s empty background noise. I get the impression that most of us just continue with our lives, uninterested or unaware about the consumer price index or sales of durable goods.

But all those financial analysts on CNN keep barking away. &uot;Alan Greenspan says tax cuts are good!&uot; &uot;The Fed is cutting interest rates!&uot; &uot;They’re trying to head off a recession!&uot;

The problem with all this talk is that none of it is relates to the regular Joe’s life. Unless you’re in the financial industry, or a follower of it, you don’t know why you should care. If these money gurus didn’t talk about it endlessly, would any of us notice this so-called recession?

Well, this week, I gained a little more insight about these financial matters. My better half checked out a financial basics book from the library and suggested I read about how money is pumped into the economy. I have to admit, it was interesting.

I had always wondered exactly where new money enters the marketplace. Do they just give it away? Well, pretty much, as it turns out. The Federal Reserve creates money by &uot;buying&uot; bonds from these big banks. The catch is that the money they use never existed before; they just print it up and spend it. That money ends up being loaned out several times over, and all this new money is created.

Apparently, the Fed conjures up more money when they want the economy to grow. If they want things to slow down, they just slow down the infusion of money.

It’s fascinating that a small group of people sits around and performs this voodoo magic on the economy. They have incredible power; if they decide not to print as much money, some bank somewhere will get scared and raise interest rates, and some company in New Jersey will decide to lay off workers, and you’ll read about it in the paper and gasp about the &uot;slowing economy.&uot; Other factors surely have an economic impact, but few can be as effective as pumping out new money.

Of course, we’re lucky our group of Fed shamans does a good job of it; in places like Russia, they just print up cash willy-nilly until you need a wheelbarrow full of rubles to buy a loaf of bread.

But why do we always have to be expanding or receding? We’re either enjoying an unprececented expansion, or we’re looking at some big scary recession. Why can’t we just stay the same for a while?

The killer is that spending habits, which seem to drive the whole thing, change depending on the economic forecast. I wonder what would happen if people, banks and businesses just did what they wanted without worrying about this stuff. Maybe this endless boom-and-bust cycle would disappear.

The ultimate lesson, for me anyway, is that any politician who takes credit for the economy is not to be trusted. Of course, both parties claim it was their wizardry that caused our so-called economic expansion. They never tell you about the dozen guys in a room someplace who actually control everything.

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Random junk:

It looks like ‘extreme skydiving’ has taken root as a popular sport in Malaysia, one of the few countries that will allow it. Americans are heading there just to take part in the activity, which apparently involves parachuting off radio towers and tall buildings.

No word yet on whether the skydivers snatch speeding cans of Mountain Dew from the sky as they plummet downward.

I heard this phrase on the radio this week, regarding the cold temperatures: &uot;You’re advised to use common sense.&uot; This begs the question, if you have to be advised to use common sense, are you likely to have any common sense to begin with?

Is it just me, or has watching &uot;Who Wants to be a Millionaire?&uot; become as tedious as folding laundry? The show was intriguing at first, but if others feel like me, it will be off the air soon.

With each contestant, you have to sit through eight questions about challenging topics like nursery rhymes, then watch them poll the audience to find out how many sides a square has. By the time they get to the real questions, I’m too annoyed to care. Freeborn County can build a courthouse faster than these people can make it to $64,000.

Dylan Belden is the Tribune’s managing editor. His column appears Sundays.