Sunday, January 4, 2009

Honey, They Blew Up the Economy: Relevant Financial Explanations

I, like most people, am positively sick to death of hearing about economic news, and the temptation to tune out is great. The news is so extreme, the astronomical figures and sensational and breathtakingly brazen nature of the architects of the scams (let's call them what they really are) that have touched the richest and the poorest, and everyone in between. But it is precisely at times like these that it is important to tune in, to improve your understanding, and do the small things that help your family and your community to weather this storm. Check out these recent stories, and take away what you will. This to shall pass.

  • One of the more vexom aspects of our culture, for me, is the degree we have become dependent upon our consumer impulse, indeed have stoked it to high flame. Look behind the curtain, and learn how marketers get under our skins and into our brains. Most people have heard our leaders variously exhort us as a public to "get out there and shop" at economically sticky junctures, and now that the American consumer is all but hightailing it to their financial bombshelters, some worry if we can pull out of this if we do not spend. I think the question is more what do we now choose to spend on? Maybe that is the gift of the crisis--reassessment of what is important to allocate resources to. I am always staggered when there is some random national charity drive, and literally millions comes out of the woodwork. The money is there, but where is it being spent? Hopefully we won't let an important cultural conversation go by as things improve. Pain is unfortunately a powerful motivator.
  • Wonder about how the printing of money is managed? They can indeed "just print more," but it isn't at all as easy as just firing up the printing press, which lately is positively smoking from the exertion!
  • It's not surprising that saving is now in vogue with everything from recession meal planning to fashion runway turns on what the modern frugal diva will pry open their pocketbook for. In fact some speculate as to whether vanity is dead in our recessionary times? Have they turned on Bravo lately? Um, my guess is no. Oh yes, you want further proof? Be flabbergasted about the woman who sold her twins for liposuction. You really can't make this stuff up!
  • Along with this, guess what was a hot gift for the kids this year? Piggy banks!
  • We can barely keep up with understanding all that is happening, but imagine the kids. They can whip out your i-Phone and "pimp it out" in seconds flat, but they might need a little help from you to understand bailouts and ponzi schemes. Learn how to talk to junior about the bailout. Also check out general tips about talking with kids about money. In fact, for many adults this explanation works better as well!
  • Better yet, teach them creative ways kids can make money.
  • For those who think that the mattress is looking pretty good as a financial institution, don't stuff it just yet, and read about how to assess a bank.
It's a new year, and the financial hangover is likely to persist until perhaps the next new year, but resolve to turn adversity into opportunity. And that's enough of that trite motivational drivel. I like what a old colleague of mine posted on his Facebook, resolve to "see the beauty in the necessary."

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