At a casual lunch gathering, several colleagues spanning Gen X (me), Gen Y (or millennials) and baby-boomers were discussing a plethora of topics. We started with salary transparency in US and Norway, which led to discussions in neo-classical economics and reaching pinnacle with Gen Y proclaiming that markets are free self-regulating entities, driven by supply and demand and reach equilibrium overtime. For a few minutes I just sat there in a daze, listening and doing a personal retrospective.

When I had entered the workforce about a decade or so ago, to me economics translated to a simple formula: Supply and demand dictates prices and capitalism took care of the rest. Then the great recession happened in 2008, which Ben Bernanke called the worst in global history and everything turned over its head. Suddenly, the monitory policies, fiscal policies, risk traps, toxic assets, too big to fail, herd mentality, Pavlovian conditioning, quantitative easing and micro/macro-economic(s) all came under the microscope.

I had become a first time home buyer during the housing bubble and saw the value plummet when the bubble burst. As the economy contracted it had a ripple effect, a few highlights of which are:
A partial nationalization of financial institutions like Fannie Mae and Freddie Mac occurred. As the years progressed with no end in sight, “quantitative easing” came into play in the form of fiscal stimulus package and monitory policies. It had minimal to no impact as most, if not all institutions and consumers were in “Deleveraging” mode. We in essence had entered the “lost decade” similar to Japan.

As all these thoughts are rushing through my head, I am reminded of what Dr. John Komlos dubbed, “Capitalism with a human face”. Unlike the neo-classical economists who target the Wall Street, Dr. Komlos is an advocate for the main street. His ideas, shared by many other economists, preach the concepts such as:
  • Wealth redistribution - raise the minimum wage.
  • Keynesian framework by, having governments spend during downtimes and save during upticks.
  • Stop unscrupulous spending and consumption.
  • Ensuring sustainability of natural resources for future generations and last but not least: 
  • Halt the beast of “Instant Gratification”.
As I begin to articulate these thoughts to my Pavlovian conditioned colleague, I notice a blank stare, which I have to say was not unexpected. Prior to the great recession, I was drinking the same Kool-Aid preached by the neo-classical economists - then “2008” happened. The standard economic books need to hold the mirror up-close as it is time to go beyond the supply and demand formula – it is time for Capitalism with a human face.