Tuesday, October 26, 2010

Unexpectedly Unpatriotic in an Economy Begging Me to Buy

I have come to the reluctant conclusion I am unpatriotic after reading commentary from the economic gurus of our time. Many economists believe a key to getting our country out of the economic doldrums is for consumers to consume. A few lone voices talk about the need for companies hoarding money to spend, but those are not the stories making headlines. 

I do not understand why my few dollars can begin to compare with companies loosening their wallets, buying equipment and hiring employees.
It is ironic that not so long ago we were being admonished to save money. We (the baby boomers) might be a generation of retirees with not enough money to meet our needs. But now  we are being told to loosen our purse strings and not save so much, even though the lost decade from 2000-2010 has not served our generation well by allowing us to prepare financially for our future.  

I have become unpatriotic for a couple of reasons. 

First of all I quit my job. Uncle Sam lost some tax revenue from me. The upside is I created a position for someone else to step in and get a paycheck, pay taxes, contribute to a retirement plan, and consume. So on balance Uncle Sam probably has not lost much. I on the other hand have attempted to cut expenses.  I have cut way back on my clothing budget. I no longer have to get dressed five days a week for the office. We enjoy eating out, but cut back on the number of meals consumed out and the amount of money spent. I buy less gas. The environment should be grateful.

But Uncle Sam wants me to spend more money now. As a consumer society, we need (or so economists tell us) to buy stuff. Factories can then make more stuff. Companies will hire, employees will earn a paycheck and a lot more people will have money to buy more stuff.

Unfortunately too many people over the years bought too much stuff and got themselves into a lot of trouble, with mounting credit card bills and loans they cannot pay. 

Now we have to live with the results of our profligacy. Banks, mortgage companies and the salesmen they employed got greedy and sold loans the companies knew were not viable. 

The good times rolled and nobody cared about long-term consequences. All corporations and their employees cared about was their paychecks, bonuses, and corporate profits. No one took responsibility for their irresponsibility when everything came crashing down.

When the financial crisis hit and the housing market collapsed major financial institutions compounded their irresponsibility, taking advantage of their dominance by foreclosing on mortgages gone bad. Large banks were never the friends of the small guy. When residents of Main Street collide with the titans of Wall Street, Main Streeters lose.  

Here is a quote from a JPMorgan Chase & Co. spokesman when confronted with the question of why foreclosure documents were not reviewed:
                We believe the accuracy of the factual loan information in the affidavits was not affected by whether or not the signed had personal knowledge of the details.
Really? I can just see the big guys lamenting the fact that they had to spend their valuable time reviewing foreclosure documents. 

"How much will it cost us?" asks one manager. 

"How much can we charge?" asks another…And after they realized there was no money to be made, they do whatever was necessary to get these unpleasant tasks completed so employees could get back to the real work of making money for the financial institution. 

The mortgage holder now in trouble was undeserving of the bank’s time, effort, service, or assistance. Toss the people out of their homes and move on.
There are many reasons for the economic problems plaguing our country today, but the shortsightedness, arrogance and greed of major financial institutions and those who run them played a substantial part. 

It is ironic those of us taking the old-fashioned financial road are supposed to haul the economy back to life. And we are supposed to start by going shopping.

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