My good friend Glenn had a letter to the Huntsville Times published today.

Immature consumers

There is no mystery about today's economic situation. The only surprise is the time that it took to happen. Want it now? Why wait? Buy on credit!

Americans long ago forgot fundamental rules about saving as they set out upon a ruinous path of borrowing, prompted along the way by the offers of irresponsible lenders, the siren calls for luxury automobiles, houses, electronics, and such, and by envy of the lifestyle excesses of the rich.

Aside from the well-publicized problems with subprime mortgages, banks have contributed to the crunch by reducing their interest rates on savings to the point that the once promising avenue of compound interest is no longer viable for building a nest egg, and even the most conservative savers must turn to high-risk investments such as the stock market - and now real estate - to try to stay afloat amid the rapidly increasing costs of basic essentials such as groceries, health, and fuel.

The Federal Reserve compounds the problem by reducing interest rates to further drive the spiraling credit cycle, and the incredibly reckless Bush administration sets a fine example with its massive deficit spending. Interestingly, the poll in The Times showed the consumer to accept little blame for the current economic malaise, but he is in fact the root cause, and the problems won't go away until he finally confronts himself in the mirror and begins to show some fiscal maturity.

Glenn W. Zeiders,

Huntsville, 35801

Source Letter to Editor, Huntsville Times

Good food for thought!

I'll agree that buying on credit can be a big problem for some. In fact, it IS a big problem! "Instant gratification" is something that should have been outgrown early on in our growth and development cycles, but a large segment of the population seems to have gotten stalled at that phase.

I would dare to disagree that "savers must turn to high-risk investments" in order to stay ahead of the curve. Again, though, instant gratification comes into play. If you want to put your money in today and take out twice that amount next week, your only alternative is high risk. For those who invest in the stock market, or even in real estate, for the long term, such investments are wise and sensible and not necessarily all that risky. A balanced portfolio of suitable investments--my preference is to go the mutual fund route--that one holds and continues to add to on a systematic basis for dollar cost averaging, will almost inevitably produce a good result.

The problem I see, though, is that "instant gratification" curse that has taken the nation hostage, with the very willing assistance of Madison Avenue, the Fed, and the Bush Administration. "I want what I want and I want it right now" will be our downfall, assuming that we have not already proceeded too far down the slippery slope.

Patience, people! Patience!

And thank you Joe for your "instant" response. I like feedback and I like it NOW!

See what I mean, people?

Growing up in Oklahoma, there were three things you bought on credit, your house, your car, and your burial plot. Credit cards were rare things that only the wealthy owned, I remember Diners Club signs as the only visible symbol of credit cards in those days. The closest thing to buying on credit people in my socioeconomic level used was lay-away.

Progressing through the 70's and into the 80's we developed something along side the need for instant gratification, a consumer culture. Consumer culture is driven by the need to replace things decayed by planned obsolescence and to buy the new things and the stylish things that are marketed to us with an alarming regularity. As the consumer culture developed, banks and other lending institutions made it easier to get credit. With easy credit and all this new stuff, advertisers pushed the instant gratification Joe mentioned. It begins, literally, before a child can read. Watch cartoons with your kid and see how many products they just have to have are advertised. The Consumer cultures drive to consume, Instant Gratification, and Immature consumers are a positive feedback cycle that spirals out of control.

A consumer culture makes the problem deeper than just immature consumers and instant gratification, both of which are symptoms of a problem. What can you do to change an entire society's attitudes toward credit and consumerism? The great depression, which was really just another of the cyclic depressions that wracked the US through most of its history birthed a generation that feared using credit. The cyclic recessions since that time have never reached the levels of the depression, and modern consumers don't have one of those bust cycles where they loose everything and have to live with the consequences. Unless we change the way American's think about credit and end the consumer urge to buy useless stuff, it won't end.

What is an immature consumer?

quote:

Someone who buys something they don't need, with money they don't have to impress someone they don't like.*

We have become immature consumers because TV and radio have convinced us that buying something, whether we can afford it or not, we will make our life better. As my dad always told me "If you can't pay cash for it, you don't need it." A lesson I have learned the hard way. But the hard learned lessons in life are the ones that are remembered.

*(That is paraphrasing a comment originally made by Will Rogers.)

You speak true, Senator. Too many of us have become convinced that we always need to buy more, more, more, whether we can afford it or not. Plastic (or other forms of buying without cash), well-used, can be good. Used irrationally, it has gotten us to the downward spiral in which we now find ourselves.

Isn't it amazing how much of Will Rogers's wisdom is still so appropriate today?

Excellent Commentary, Kathy! And so true!

Will Rogers never said anything (that I've heard) that doesn't make even more sense today than when he first said it.

Example: "Buy Land. They ain't makin' any more of it!"

quote:

"Buy Land. They ain't makin' any more of it!"

With the possible exception of Hawaii.

quote:

"Buy Land. They ain't makin' any more of it!"

With the possible exception of Hawaii. Super Cool

That's true Joe, I was amazed when we visited the volcano on the big island how much land mass has actually been added since the almost continuous eruptions started in the 1980s. Some of that old 1980ish lava flow actually has some vegetation growin on it. But then Kaui is sinking back into the sea.

I found out in preparing for this new grandbaby that diaper pins are no longer sold for utility purposes. Cloth diapers are a thing of the past. One can purchase them but not the diaper pins and rubber pants.

We certainly have become a throw-away society.

Kathy

quote:

Originally posted by Kathy Albers:

quote:

"Buy Land. They ain't makin' any more of it!"

With the possible exception of Hawaii. Super Cool

That's true Joe, I was amazed when we visited the volcano on the big island how much land mass has actually been added since the almost continuous eruptions started in the 1980s. Some of that old 1980ish lava flow actually has some vegetation growin on it. But then Kaui is sinking back into the sea.

Well, "The Lord giveth and the Lord taketh away"; and so does Pele, apparently.

You can only get cloth diarpers her in San Diego from a diaper service. It is a technology very much gone.

This reminds me a bit of that well worded prayer, "I want patience, and I WANT IT NOW!!!

Thanks Kathy!

It brings to mind a great song by Queen.