Penuriousness Is Precious

How much are you going to spend on Christmas this year? Every year the news organizations send reporters out to ask us this same question, and whether we say more or less the net result is always the same. When the holidays are over the analysts tally the scores and announce that, once again, we spent more this year than the last. Dire predictions about dangerous amounts of debt and overextended consumers and bursting bubbles soon follow, and then, again, as always, we refinance our homes and raise our credit limits, and next year we're off to the races all over again.

And that's just the way it is. No, it's not like the old days when our mothers and fathers scrimped and saved and knew the value of a dollar. In fact, these days we don't save at all. According to the statistics, we now spend more than we earn and the savings rate has actually gone negative. To which I say "So what?". Of course our mothers and fathers scrimped and saved, but that's only because they didn't have all this cool stuff to buy. When they went shopping they went to Sears, for crying out loud. Believe me, if they had been alive today they'd be spending like a bunch of drunken sailors too.

Which brings me to my point. Namely, all these people who preach austerity and responsibility and living within your means don't know anything about real people or the way the real world works. The fact is that from the time an American child leaves the womb till the day he lies down in his grave, he is under constant study and scrutiny by marketing experts, media experts, retailing experts, doctors, psychologists and all manner of high-level advisory types whose sole aim is to analyze and poke and prod to find just what it is that will turn people into happy spenders. It's a pitched battle between an army of experts with million dollar budgets and one poor bastard with a credit card, and that poor, dumb bastard doesn't stand a chance.

That's why the news organizations cover the same story every year. It's like the war news, and everybody knows that the future of the country depends on the guys with the big guns coming out on top. As soon as Thanksgiving rolls around, editors across the country start to fidget.

"Why aren't they spending? What's wrong with them? Quick, Ed, send a crew down there and find out what's going on. What's that? What'd you say? Best Black Friday ever? God, it's great to be an American."

So with that in mind, let me just say don't be a cheapskate and have a festive holdiay season. I don't really have any great gift ideas for you. Clothes are always nice. Nothing makes a person feel interesting and new like a fashionable wardrobe, unless you're buying for a geek, that is. In that case forget the clothes and go for something like a portable GPS for the car. They're hideously expensive and not really useful unless you spend a lot of time driving in strange places, but they're very geeky.

In a somewhat related story, Louis Uchitelle of the New York Times wrote an interesting article about wealth in America. Everyone knows that over the last couple of decades the rich have been getting richer, but what does that mean? Well, apparently it means that nowadays there are the wealthy, and then there are the super-wealthy. According to Uchitelle, 1 in every 845 Americans now has an annual salary of $2 million or more per year (here in the Silicon Valley I believe that figure would be more like 1 in every 8.45. When people here buy "his and her "Lamborghini's that doesn't mean they're overspending - that just means they have to go upstairs and find their checkbooks).

So what does that mean for the other 844 who aren't earning $2 million per year? It means we've gotta get the limits raised on our credit cards, that's what. How else can keep up? Just because we aren't earning 7 figure incomes it doesn't mean we have to let other people know that, and as long as we spend like we have 7 figure incomes how is anyone going to find out?

That's my philosophy anyways. No, actually it's not. My philosophy is that if you're going to spend thousands of dollars on things you don't need, then you better be earning a 7 figure salary. In other words, if you can't downgrade your spending then you better upgrade your earnings. I think that's a more realistic approach than all this austerity and simple living being preached nowdays. What good is a National Don't Buy Anything Day, if you're only going to spend twice as much tomorrow?

Turning back to the article, you can see what this Dr. Glassman did. He was a medical doctor with a perfectly good practice, but he decided that he needed to upgrade his earnings if he was ever going to be super-wealthy, and that's just what he did. He said goodbye to curing cancer and easing suffering and healing the sick and comforting the afflicted and all that, and went to Wall Street. Now there are no sick people to bother him and the money comes in by the bucketful. I love the part in the article where he goes back to his 20th college reunion and sees these poor suckers he went to Med School with, who even he says they were 10 times smarter than him. There they are, still caring for the sick and doing good deeds, making a comfortable living while he's raking in the big bucks and getting filthy rich over at Merrill Lynch.

I say let that be a lesson to all you kids out there. Doing good works for your fellow man may be a noble pursuit, but it won't get you a fancy sports car or a mansion in the hills or a trophy wife, and if you want to spend money on things you don't need and you aren't a movie star or a musician or a professional athelete, then you better find your way to Wall Street.

And that's my Christmas message to you.