Savings, America’s Capital Depreciation Fund

Peter Peterson, the founder of the Blackstone group is lamenting the lack of personal savings in the US. He says this is a bigger problem than the current recession. He may be right when he says that since there is no domestic savings, foreign countries holding our debt can hold our economy hostage.
Unfortunately he blames our attitude of “want it now” for out lack of savings. Here he is dead wrong. If you go and open a savings account these days you will find out two things.

1) You will likely pay a fee for having a savings account.

2) The interest rate you receive on your savings will likely be well below inflation.

Bottom line, when you save, YOU LOSE MONEY.

I don’t know about you but I can’t see why the interest rate on savings shouldn’t be some percentage of the loan rate, AND it should always be better than inflation. The banks are jerking us around, charging fees everywhere they can, keeping savings interest rates low, and now using our tax dollars to pay exec salaries and bonuses. Mr. Peterson has a lotta sand to sit in his fancy suit and talk to us about how bad we are for not saving.

Maybe in our little way by not saving we are telling the MARKET that we want change. But why should they change, if we don’t give them enough at the teller window, they’ll get it from our tax bill.

http://money.cnn.com/video/ft/#/video/fortune/2008/12/02/fortune.500.peterson.saving.fortune

Consumer Confidence

So today the government decided to try to improve consumer spending by investing in the consumer debt market. Treasure Secretary Paulson thinks that by freeing up personal credit we consumers can go on with Christmas as usual. Come on guys, only a moron would go out on a buying spree in this climate. We are cutting Christmas to the bone. The companies we are bailing out are continuiong to increase fees and premiums while holding posh seminars on our dollars.

Now if you really wanted to boost consumer confidence, instead of investing in companies that have already sucked all we can afford out of the economy, why don’t we put a couple of billion into…education.

Yup, if you want to boost MY consumer confidence you could help me be confident of the college education of my kids. With one in college, one starting next year, and the last the year after, if a couple of billion were spent so every child with say a B average gets a free college education, it would go a long way to improve my confidence. I am a firm believer that education improves society so what’s to lose. Sure we need to make sure it’s not just a party, but the VA and most existing scholarships already do this. Instead of keeping some fat cat in his fine house, lets send our kids to school.

If you did this Mr. Paulson, I’d make my Christmas gift list much longer, I’d even send you something nice.

Laissez-Faire

I just finished reading a commentary on CNN by a CEO named Carl Schramm. Carl, bless his heart, is lamenting the threat of a wave of government intervention in our economy. He wrings his hands and seems to say that since there is a danger of bad things happening the government should keep its hands off of the economy. Laissez Faire is the holy grail of economic prosperity.

Well Mr. Schramm, Laissez-Faire is what caused this melt down in the first place; following the buck isn’t always what’s best for society.

I wrote in an earlier post (Banks- or- I wish Adam Smith’s invisible hand would stop touching me there.) about the banking industry charging fees everywhere they can.

Health insurance companies are giving minimum services for whatever the market will bear and cutting off whoever they can who need their services.

We are bailing out the financial industry, all the while being berated for being too greedy, using too much credit, and not being careful about our investment. I must have been hit in the head because I don’t remember all that.

Politicians are telling us how we are going to have to sacrifice. Why? Because we have had so much benefit from this boom? What are the beneficiaries of this recent financial boom going to sacrifice?

I don’t know if anyone has noticed but wages have been stagnant since 2002. Our free market choices have degraded to a game of pick your rapist in banking, health insurance, and retirement. Our political system has long been a system of voting against the most odious candidate but now it has moved onto other parts of our life.

The most frustrating part is, there is no one to pressure for change. Faceless Corporate America is a tough target with no one responsible for its decisions. Not that I would expect a 40 or 60 million dollar a year CEO to take any responsibility.

I could push for change if only I could find a place to push. I feel like Archimedes, I could move the world if only I could fine a place for the lever. Well maybe it’s more like Sisyphus and his rock.

Sacrifice

I am, even as I type, listening to Senator Obama speak for the bailout. He made a statement that has been used time and time again when asking the American People to get in line and cooperate. He said, “we will all have to sacrifice.”

Well, news flash for you Mr. Obama, and you Mr. Bush, We have been sacrificing.

I would ask how are you gentlemen are going to sacrifice? Is there any way that YOUR families are going to have to suffer, give up, sacrifice, for the good of our country? OUR families may have to postpone college, lose jobs, hold down multiple jobs, fail.

What will you personally sacrifice, as an example, so we can, in good conscience, sit at our supper tables and tell our children that they have to sacrifice their future, for the good of our country?

Your Economy, My Economy

President Bush warned, “We are in the midst of a serious financial crisis. Our entire economy is in danger.”

I would say to him that YOUR entire economy is in danger, MINE is already in the tank. With sub-inflation rate raises for the last several years, rising health insurance costs, children in colleges with rising costs and reduced student aid, sky high gasoline and heating prices, my world had been in a pinch for quite a while.

Well Mr. President, now that YOUR economy might feel a pinch and the multimillion dollar CEO’s are hurting, well something must be done. Drop everything and bail’em out.

Some kind of health care reform will have to wait.

Maybe we can afford to educate the next generation, this one will have to fend for itself.