Savers, Fools, Grasshoppers, Ants--- and the Perfect (Economic) Storm
The 2008 economic 'meltdown' ---
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(2008 Nov blog post)
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INTRODUCTION In response to the U.S. economic 'meltdown' that surfaced in no uncertain terms in mid-September 2008 --- as evidenced by a $700 billion goverment 'bailout/rescue', I fired off a set of Letters to the Editor of a local newspaper. (This was after sending off a set of letters to members of the Senate Banking Committee -- the contents of which are posted in other 'economy' blog posts on this site.) The newspaper was being deluged with letters, so it was almost impossible to get a letter published --- even if the letter were good enough to be approved for publication. A letter to this newspaper has a very limited potential audience anyway, if only published in their paper editon and not on their web site. Even if published on their web site, a letter is likely to have a very short life on their website. So, to feel like I was getting some heavy-weight frustrations off of my chest in a more effective way, I decided to post my letter in this blog --- because this web page might get a few more views than the newspaper or its web site. The thought of improving the visibility of the letter's message made it seem like the weight-of-frustration was getting a better lift off of my chest. The letter (email) in brief This letter makes two main points:
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START-OF-LETTER :
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TO: letters@dailypress.com
SUBJECT: 30 Sep 2008 Dear Editor, Daily Press: Put yourself in the place of a person who has not been saving during his/her years of employment --- a person who has been living 'on the edge', from paycheck to paycheck. In view of the current economic melt-down, you would probably be saying to yourself "I sure am glad I was not one of those saver-types. What fools! They are fretting and losing sleep over where to move their money so that it will be safe. It's not apparent that there is ANY place that is safe, given the federal debt. And, in the last nine months, if these saver-types were following 'conventional wisdom', they had most of their money in mutual funds and stocks. At this time, it appears that they lost about 20% to 80% of that money in the last nine months. And the losing goes on. Man, I'm glad I did not follow the conventional wisdom. What fools. If you've got it, spend it. That's what my credit card company wants. I'm glad to oblige. At least I have [clothes / knick-knacks / beer-belly / insert-your-preference-here] to show for it." This scenario is similar to the fable about the grasshopper and the ants, with winter coming on. The grasshopper fiddles away while the ants work hard saving up for winter. Winter comes, and the grasshopper regrets how he fiddled away his time. In the U.S. fable, however, BOTH the grasshopper and the ants end up in trouble for the coming winter. In fact, the ants are worse off --- with panic, anger, regrets. The grasshopper has few regrets --- in his view, he did the right thing, the smart thing.
<Start-sarcasm> You were in control. You knew when people were taking out risky mortgages. You could have stopped them. But you had common goals --- a common greed. The greeds came together in a Perfect Storm.
Cheers, |
END-OF-LETTER.
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Page was posted 2008 Nov 03.
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