It’s easy to get angry and start blaming people for the financial mess we are in. Glad to see the markets up around 500 pts today, but for some reason I still doubt that we’ve hit bottom. I hope we have. I fear we haven’t.
To really get a grasp on how screwed up our financial system is and how messed up those who are responsible for overseeing it are… I beg you to read this article in Rolling Stone.
Believe me… Wall Street and Fed are counting on the fact that you are either too busy to read it or to dumb to understand it. Truth is, you won’t understand all of it, but plow through it. It’s your civic duty.
This article will make you angry. But let’s remember our part. There’s a graph I saw recently comparing Consumer Debt (mortgages/loans/credit cards) to our Gross Domestic Product (GDP–the dollar value of all goods and services produced within a country’s borders in a given year). From 1940 until the early 1980s, consumer debt was below 50% of the GDP. By the late 1990s it crept up to 70%. From 2000 to 2008, it shot up to, you guessed it, 100%. That’s right. As citizens of this country, we now owe as much as the nation produces. Oh, there was a year in history when we were also at the 100% level. You guessed it again… 1929.
Yup… we became the wealthiest and most prosperous nation in the history of world by financing it. We put it on the card. We wrote a big, fat I.O.U. to buy our houses and SUVs and vacations and appliances and electronics. Now we want to blame the politicians and bankers. Well, unless you can easily pay off your debt in a few months, you’ve fed into the problem as well.
An what does Congress want the banks to do with all that bailout money?? Start lending it! Open the lines of credit. Start the borrowing again so the economy can roar back.
Maybe the worst is behind us. Maybe the Dow is just going to keep roaring up the charts. But I look at this chart and things don’t look so good.
Maybe the best thing we can do is stop the madness. Slow your spending way down, even if you’re not in financial hot water. When you do spend, shop local if possible. Mom and pop places. Put your money in the hands of local folk instead of big corporations and banks. Why buy a new car when a used one is just as good? And send a little of what you don’t spend to the charities caring for those who have nothing.
And if you don’t know them, get to know your neighbors. You just might need them one day… or they may need you.
I read the RS article. It didn’t surprise me. When man is left to operate out of our fallen nature, well bad things happen. History repeating itself has been history repeating itself for as long as history has been repeating itself.
I like your ideas of changing spending habits. Many of which we have been doing and are starting to do now.