Sharpen Your Teeth!

The family wage has been eroded by the same developments that have promoted consumerism as a way of life. -Christopher Lasch (1932-1994), American historian and social critic.

At this very moment it appears that the US economy is in a tailspin…Wall Street has seen the collapse of several companies that have been fixtures for a long time followed by a $700 billion bailout intended to restore economic stability. Following closely behind is the discussion of a secondary bailout for the failing American auto industry. Something has clearly gone wrong here but is it really that complicated? NO! You see what the government is really trying to do is stimulate average Joe and Jane to run out and keep spending money by making credit remain accessible. Certainly I understand that businesses can always make proper use of credit to smooth the ebbs and flows of cash flow or even push innovation by financing research and development efforts, but let’s focus on what really drives any economy: PEOPLE! That’s right it’s us! Consider the fact that the US Gross Domestic Product is comprised primarily of “consumption” and guess who does that…you do! So the incredible irony is that our money (taxes) funneled through the government back into the economy is ultimately there to bait us to buy MORE! Crazy really when you look at it that way!

Yet rather than slip into an Economics 101 class, we should simply recognize what this set of circumstances can really teach us; which is simply to know the difference between proper consumption and over consumption.I will warn that it is very difficult to isolate an economic concept like this because there are so many different factors that effect an economy…so many that often times economists invoke the Latin term “ceteris paribus” or “all other things being equal” just to make a concept clearly understandable! You see one of the main reasons we are in this mess is because we over consumed…we bought things that we clearly could not afford…we gave mortgage money to people that had absolutely no way of ever being able to pay it back…some of them knew that and others had no clue because they were taken in by someone else’s greed. But here’s the great thing about capitalism; it has an uncanny way of allowing greed to run up to a point, and often over a longer period of time, but comes through the door like a drill instructor and just cleans house! It takes everything away from the greedy and the clueless and rearranges everything! You talk about wealth redistribution! The problem is that this cleanup process has a very devastating affect on many people which is the unfortunate consequence, but folks it is what it is!

So what can you do to protect yourself? Get educated about what is happening! First of all if you are feeling some of this pain, take notice: It’s NOT the end of the world…it’s simply a wake up callthat comes harshly every 7-12 years or so! Anybody remember past recessions or even the great Depression! So learn from it because it will happen again to you someday or your kids and grandkids. You see there are those who really understand this and wait for these moments to run the table…does the name Warren Buffet ring a bell…guess what he’s doing right now…BUYING! The real thinking tool here is to wake up and be aware! “Consumerism” is eating many of us alive!We are on the treadmill paying for things we had no right to buy because we can’t afford them! So stop it! It’s okay to say “I can’t afford it right now”…what’s wrong with that? Don’t run down to the electronics store this holiday season and buy yourself that widescreen tv unless you’re paying cash! Stop putting yourself in debt so that you can keep up with the Joneses…you know why? Because some of the Joneses are in foreclosure too! Visit some of the neighborhoods where your “think” the wealthy live and see who is selling…you might want to avoid doing what they do and look to the people who seem to be doing just fine…chances are they are exercising financial discipline and are buying your discounted assets right now! Please don’t use this lesson as your whipping post as to what you might have done wrong, rather as a source of inspirational dissatisfaction and sharpen your teeth so that consumerism does not put the bite on you!