Saturday, October 11, 2008

The Economy - A Common Man's Perspective

The Economy. There probably isn't anyone reading this who hasn't thought about the current world economic situation and how it is, or is going to impact their life. Food prices are going up. The cost of gas and utilities are through the roof. Retirement accounts are shrinking. I'm just a common man and don't profess to be an economist. I certainly don't know how to fix what's happening. But I do have some perspective on where a lot of the responsibility for these difficult economic times lie.

  1. "The American Dream" has changed over the past several decades. It used to be that through hard work, dedication, educational opportunities and advancement you could make a good income and provide a comfortable living for you and your family. Through your efforts you could achieve your dream. Somewhere along the way, the dream has become a list of entitlements. "I deserve to have a huge home, new car(s), flat screen TV(s), expensive clothes, and a luxurious, early retirement. I don't really want to work too hard in order to get all this stuff. I'm an should be given to me. Preferably on a silver platter." The dream has become a nightmare.
  2. Government. Irresponsible government spending has set the tone for US citizens. "Our government can't live within the means that our tax dollars provide so they rack up billions of dollars in debt. Surely a little bit of personal debt so I can buy that new car or bigger house isn't so bad." Some debt can be justified for the overall health and well-being of our nation but the vast majority of our national debt is waste, plain and simple. The hole that is currently being dug will put future generations in extreme financial risk. Government officials, elected and otherwise, generally lead very comfortable lifestyles and are paid significantly more than the average American. They are out of touch with the people they serve and are setting a dangerous precedent. 
  3. Corporate Greed. Gone are the days when a reasonable profit was acceptable in corporate America. Industry in the 21st Century must make huge profits and line the pockets and bank accounts of its executives, board members, and major stock holders. How many times have we read about corporations and institutions failing, laying off thousands of people, blowing out employee retirement plans due to irresponsible management and yet the top executives make millions with their "golden parachutes?" As the price of oil skyrockets worldwide, squeezing the budgets of consumers, we read about the oil industry making billions of dollars in profits.
Lots of finger pointing is going on about who's at fault for the big economic crash. Democrats blame President Bush, but isn't it the Democratic controlled Congress who really sets and controls the budget? Democrats and Republicans both blame the greed of the financial institutions, but wasn't it those very politicians who encouraged banks to provide bigger, riskier loans to more people to help them buy bigger, more expensive homes? We point our fingers at the government saying they should have watched out for us and not allowed this to happen, but aren't we the ones who voted for them and put them in office to begin with and let them do pretty much whatever they want with little or no accountability? Home owners blame the mortgage companies and banks when they suddenly can't afford their house payment, but wasn't it these same home owners who bought more house than they could afford without educating themselves about what those sub-prime, adjustable rate mortgage payments would balloon to in a couple of years? We complain about the high price of gas for our cars but we don't try to plan our days to maximize our efficiency for the number of miles we drive and God forbid we carpool with someone because that would just be too inconvenient.

As we get angry and point the finger at those we seek to blame for the breakdown of the economy, we need to stop and take a look at our hand. See that finger sticking out towards those we want to accuse of wrecking our "dreams?" Look closely. There are three other finger pointing back at us. We all bear some responsibility for what is happening. It's time to suck it up and stop acting irresponsibly. We need to make smart decisions about how and what we spend our money on. We need to hold both ourselves and our elected officials accountable for financial decisions that affect our lives. It's time to stop being greedy and to start living within our means personally, professionally, corporately and nationally. It won't happen overnight, but with perseverance and discipline I think we can weather this storm.

Am I off base? Do I just not get it? I'd love to hear what you think.

No comments: