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> From: The Omega Man (TM) [mailto:editorial@xxxxxxxxxxxxx]
> Subject: Re: SAVINGS RATE CRISIS... myth exposed
>
>
> Bruce,
>
> I appreciate your insightful commentaries on the economy - though, of
> course, I don't agree with everything you say.
>
That's ok, total agreement takes all the fun out of it.
> Let me just ask you this, perhaps stupid, question: Do you feel that
> Americans are "saving" enough? Or is your commentary really aimed at
> redefining "savings" - leaving the question of the appropriate *level* of
> "savings" for another time?
>
Not stupid at all. When I walk down the street and see a 12 year old with
$200 sneakers on his feet and a Nokia cell phone in his hand (one model
better than mine :(), I worry about conspicuous consumption just as much as
anyone else on this list. Do I think American's should spend less and save
more? Yes. Is America probably below the "optimum" ratio of saving versus
spending? Yes, probably.
However, the point of the message (and all my messages, really) is that the
scenario being presented to you in the mainstream media is highly deceptive
at best. The press is a for-profit entity, their goal is to sell newspapers
and attract viewers, not necessarily tell the truth. History has taught
them the two best approaches are through spreading controversy and fear.
That's not their fault, it's ours. Scaring the American people into
thinking that our savings rate is dropping towards zero and will lead to
chaos in the future and leave our children living in the poor-house makes a
great story, but the evidence just doesn't back it up.
I stated that evidence in my original message, so I won't repeat it, but
here's one last thing to think about. The reason savings are so important
is that it gives a nation's companies access to capital which it can use to
increase its productive capacity. Even from what you've read or heard in
the mainstream media, does anyone on this list get the sense that corporate
America is starving for capital right now, or will be anytime soon? Let's
even put aside the money still flowing into the markets from investors right
now, what about all the capital the companies THEMSELVES have generated and
are sitting on?
My favorite example is Chrysler (I know, it's Daimler-Chrysler now, but I'm
not giving up without a fight). I can remember when this company was so
starved for capital it had to get a loan from the federal government. Now,
it has amassed so much cash that it doesn't even know what to do with it!
It's not that their leadership is incompetent or their engineers are stupid,
it's just that there are only so many good ideas to throw money at at any
given time. The day I see great ideas from great companies going un-funded,
I'll change my tune and be VERY worried.
Now if you'll excuse me, I'm going to go try to con that 12 year old into
switching cell phones with me...
Bruce
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