Monday, November 15, 2010

Saving the Unpatriotic Penny

Benjamin Franklin coined the phrase, "A penny saved is a penny earned." Generations of Americans since have lived by that guiding principle. As children growing up in the 50's and 60's, we were taught religiously to save, save, save.

We saved our summer earnings so that we could buy new clothes for the school year. We saved throughout the fall so that we could buy gifts at Christmas. We saved all winter so that come spring we could buy that spanking new used car. and it worked. We never went into debt, and we got most of the things we dearly wanted.

Now America has ditched that discipline. "Spend," they say. "Buy, buy, buy." (It's "bye, bye," all right. we are throwing it all out the window).

The other day, CNBC's Kudlow asked Robert Reich, popular economist from the Clinton Administration, "How do we get out of this economic crisis?" Reich replied, "We must get people spending." In the absence of a Ben Franklin, this is what we are stuck with - quasi-gurus who think a penny saved is an unpatriotic penny selfishly sitting.

Isn't it strange that none of these experts ever talk about lowering prices to achieve economic stability? (The U.S. has lost its competitive edge because of the high costs of its goods, not because we don't spend enough money.) We can see for ourselves that much of America's goods are completely over-priced, including the exorbitant wages/per hour paid workers who do less and less each day. (And the less they do, the less they want to do. "Just pay me," they are beginning to say.)

Time to re-configure "Getting ahead." Instead of hiring one man at $25 an hour, hire two at $12.50, or better yet, three at $8.25. That way, an employer can produce three times the product at the same cost, which will allow him to sell his product at a third of the price, which will make for a three-fold increase in the number of people nationally and worldwide who are able to afford his goods.

On its face, this may look like a simple answer to a complex problem. But it could well be an answer made complex by pride to a problem made simply by necessity.

This isn't it a beauty contest, folks. This is life. The prize goes to those communities, and nations, who families survive.

1 comment:

Anonymous said...

Yo Man, I hear you, Moma was always puttin' pennies (literally) away somewhere and when the finances got tight, we break out the penny rollers. Saving for that rainy day or valued future possesion no doubt demonstrates financial discipline (I'm convicted of my own struggles to save) to have a sense of security in this unstable economy. Economics is only a mear factor of the overall complex world system of whatever the 'powers that be' develope. I believe individual/community financial stability can still be achieved by that Franklin adage...even in the light of the world's human paradigms tryin' to get 'fractal' with it. Keep bangin'!