More Active Posts
Front Page
The money sin
 |
 23 Comments |
The first three paragraphs of this David Brooks column sound more like something from Francis Schaeffer:
The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers expounded the message. The result was quite remarkable.
The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.
Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.
Oh, preach it, my brother. Brooks goes on to praise a report from the Institute for American Values titled “For a New Thrift: Confronting the Debt Culture.” Credit card debt has grown by over 400% since 1989. That’s a problem as depraved and far more dangerous, I think, than sex and drugs and the devil’s music. Brooks blames government lotteries, payday lenders, Congress, the president, Wall Street, and (of course) credit card companies, and he summarizes a few solutions that others have come up with:
First, raise public consciousness about debt the way the anti-smoking activists did with their campaign. Second, create institutions that encourage thrift.
Foundations and churches could issue short-term loans to cut into the payday lenders’ business. Public and private programs could give the poor and middle class access to financial planners. Usury laws could be enforced and strengthened. Colleges could reduce credit card advertising on campus. KidSave accounts would encourage savings from a young age. The tax code should tax consumption, not income, and in the meantime, it should do more to encourage savings up and down the income ladder.
This isn’t about the evils and perils of capitalism. It’s about the evils and perils of temptation, lust, and human ignorance.
 |
Topic: WorldMagBlog |  |
Email a friend |
 |
Keywords: culture, economy, money, sin |  |
RSS 2.0 |
 |
You can skip to the end and leave a response. Pinging is currently not allowed. |  |
Share this: |
Less is more
I like the idea of a campaign similar to the anti-smoking movement. Though I’d argue that our society is more addicted to spending than it ever was to nicotine.
But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.
When your Republican masters (and yes, some Democratic ones) start seeking cures for the huge disparities in this society, and asking themselves how many homes, yachts, airplanes, suites and private islands they really need while others can’t even visit a doctor when sick, then perhaps this conversation can begin.
But the two fundamental rules of capitalism are:
1)Accumulate as much money personally as you can.
2)Make as much money as you can by exploiting (hiring, selling and lending to) those who don’t have as much.
All the rest is PR.
But the two fundamental rules of liberalism are:
1)Teach people to hold out their hands, not to take responsibility for themselves.
2)Entrust big government to solve all of our problems and make the world a better place.
All the rest is strawman argument.
Not some Democrats, many, many Democrats.
From the next article I read after posting #2. It’s about the Tisch family’s disposing of its tobacco company.
From an initial investment of about $450 million to buy Lorillard in 1968, Loews has reaped big rewards. “Loews’s overall profit, excluding dividends, approximates $10 billion,” said Erik A. Bloomquist, a financial analyst for JPMorgan Securities.
Mr. Tisch has said that the cigarette business is simply no longer a focus of the Loews conglomerate, which has holdings in insurance, natural gas pipelines and offshore drilling, as well as its original focus, hotels.
Even before Tuesday’s spinoff Loews has been gradually reducing its stake in Lorillard. Since 2002, shares in Lorillard were available to the public through a tracking stock called Carolina Group.
And there is ample evidence of the Tisch family’s discomfort with tobacco. Joseph A. Califano Jr., the former federal health secretary under President Jimmy Carter, said he had known the Tisch family for years and that decades ago, “Larry Tisch was talking about finding a way to get rid of Lorillard.”
“I don’t think he was ever comfortable in that business,” Mr. Califano said. “I think the whole family was uncomfortable.”
Here’s a guy who’s been “uncomfortable” for decades about making and selling an addictive product that kills people and yet just couldn’t “find a way” to stop doing it.
So when Mr Brooks and his buddies start complaining about those who just can’t “find a way” to stop borrowing and spending money, let us consider the relative merits of those sins.
Arcadia
You are wrong. You talk foolishness. Your Democrats are no better or worse than Republicans.
I don’t care what the other guy makes. I am not jealous of the guy who lives behind us. He makes a couple of hundred thousand dollars a year. Good for him!
Many poor people spend foolishly and have lots of stuff. To get rich, one essential is to buy less and invest in some way.
Your disagreement with Republicans is misplaced. You sound like you want to live in either a workers’ paradise or a socialist society. Don’t be bitter. Don’t be a hater. Explore your inner self.
“exploiting (hiring, selling and lending to)”
How the heck is hiring or selling something exploitation????!!!!. Are you honestly in favor of a completely regulated economy with all goods rationed according to need, and prices fixed? Can you say “national collapse”????
BTW, Dave Ramsey is fixing America’s debt culture one family at a time. Check it out 9:00PM weeknights on the Fox Buisiness channel, or find a radio station or podcast at www.daveramsey.com
One can always find examples of excessive spending by some wealthy people, though most wealthy people invest the bulk of their capital in the productive economy. Free economies by any measure create more wealth among all classes than any other known economic system.
David Brooks is right that Americans in general need to be more frugal in their expenditures. The sub-prime fiasco was driven by both people who wanted bigger, better, and more houses and lenders who ignored sensible, traditional practices to determine credit worthiness.
In fact financial markets are chastising people in over their heads with various forms of debt. As long as the government doesn’t go soft and attempt to bail out people, the market in the long run will deal effectively with this problem.
The problem with Brooks piece is that it is of the gloom and doom genre that vastly overstates the economic problem. plenty of Americans are living happily well within in their financial means. Americans for the most are very lucky to live in a country that ranks at the top in per capita income and at the top in global competitiveness.
Very nice, HSK, blame individuals for the marginal products of capitalism.
“But the two fundamental rules of capitalism are:
1)Accumulate as much money personally as you can.
2)Make as much money as you can by exploiting (hiring, selling and lending to) those who don’t have as much.”
That better describes the economic philosophy known as mercantilism. Describing these as fundamental rules of capitalism betrays a dismal ignorance of the dismal science.
Capitalism creates an equilibrium between the providers of capital and labor since all transactions are negotiated in the marketplace. Exploitation is counterproductive in the long term, as competitors can lure away workers by offering better conditions, and buyers will look elsewhere if their choice is limited. In real life, your proposition 2 undermines proposition 1 to the extent that any similarity to capitalism exists only in the fevered imagination of the economically ignorant.
The myth that “huge disparities ” in wealth is something that needs to be cured is driven by a profound misreading of statistics. Such disparities are merely an artifact of statistics. Stratifications in wealth do remain stubbornly consistent. The individual makeup of those stratifications however changes constantly. 50 years ago, Bill Gates, Michael Dell, and others were not part of the top 1%. Innovation and technology create new wealth that surpasses the old, adding to the whole, not subtracting from someone else. It’s not a zero sum game. Additionally those who inherit great wealth one year show prodigious incomes, moving them into the top echelons. The following year, living off the interest, their income is greatly reduced, but they are no worse off.
Moreover, mere percentages are meaningless apart from considering the changes in the whole. 10% of a trilliion dollar economy is greater than 20% of a billion. The greatest nutritional problem of the “impoverished” in America today is obesity.
I make an okay salary but my wife and I still sacrificed and saved up and put 50% down on a modest house that was big enough for our needs. We drive old cars and our electronics and other gadgetry is reasonable, because frankly, we’d rather have money than bling.
Not so most of my neighbors. These people work construction or drive trucks or work in child care, but most of them have two new cars on payments, big screen TVs, riding mowers, and even boats. Do they need that junk? Did their parents have any of it? Can you say “crushing debt”? If people would just live within their means, things would be better off.
I read this op/ed in the paper today and am glad you posted it.
As a former budget counselor, I would say there is plenty of blame to go around.
I remember when Reagan became president and flagrant displays of wealth became popular. It troubled me then–before, it seemed conspicuous consumption was in poor taste.
Not to beat a dead horse, but some of this is the result of heightened expectations about what constitutes “normal” life. People think that what they see on television, or hear about in the media, is “normal” life–we talked about this a bit yesterday on the TV thread.
But that life is expensive–and who can blame anyone for wanting the latest toys–cell phones, Iphones, Ipods, fast Internet connections. And that includes the rest of the world watching our movies and seeing our relatively glamorous life.
Picture this–anyone who can have their teeth cleaned is wealthier than even the richest kings and queens in history.
Anyway, I agree this discussion is long overdue. Maybe we should start by narrowing our possession to 100 things?
I love Dave Ramsey and listen to him online at work. Great stuff, and something we are working at - getting out of debt so we can have some freedom!! Harder to do in this economy, but we are making progress. I wish that for everyone.
Just one observation. The liberals basically feel that although I can follow the American dream, work hard, make lots of money and buy lots of stuff, I should be punished for it. This punishment comes in the form of higher taxes on “the wealthy”, which I am a part of in some circles. I sure don’t feel wealthy, however, and I don’t make near a six-figure income. Why should people bother working hard to make a good income, if the government wants to tax it away and give it to the poor people who haven’t worked hard?! I’m all for helping those less fortunate, mind you. I am not for supporting laziness. I am not for the socialist ideas of “redistributing wealth”, which is what Arcadia seems to favor. The wealth disparity issue isn’t a problem. The fact of the matter is, everyone doesn’t need all this stuff. We can survive nicely without owning all the stuff rich people have. People need to learn this early on, and they will be better off. As long as the government lets them keep more of what they worked for.
I wonder Arcadia, where you got the assignment to monitor the wealth of others—how they got it, how they spend it, and reportedly why—and then to pronounce righteous judgment, as you see it, on their moral state as a result expecting the rest of us to lap it up without question?
Frankly, I don’t care a whit about the wealth of others, in any respect, and wish you’d take your false pronouncements elsewhere.
BTW, the static understanding of economics—where because one has many, all others have few—is not only false, it’s a statist/leftist ploy to gain power where the need to wield such power is as false as your righteous pronouncements.
Arcadia,
I agree with others, your description doesn’t sound like “the rules of capitalism”. Is there personal bitterness hidden in your message?
It’s all about personal responsibility and no Congress, Republican or Democrat can pass a law that forces people to be secure in themselves and stop using plastic. We like to blame politicians and businesses for every problem we have, but the truth is, most of the problems in our economy are the result of consumers’ own greed and selfishness.
Not one person gets out of this life alive. Coffins have no pockets. Doesn’t this dovetail into the thread “Living on Less”?
I have no problem with “excessive spending” because it’s benefit is “excessive selling” and the “legitimate transfer of excessive wealth”—something that has been going on since the very first transactions of barter occurred—to be divided and shared among others—many or few. Excessive transfer is the hummm of a sound economy.
Everything with wealth—be it an individual, a group, a nation or a civilization—eventually gives it up in some manner. If not completely through exchange for something of perceived equal value or not, then through relinquishing immediate control through investment. Wealth is constantly changing hands and the trick is to hang onto it long enough to live your entire life, with enough of it, to be as comfortable as you determine your need for comfort. BTW, your comfort is also determined by satisfaction with your moral state resulting from charity—lest someone think that is being ignored here.
I think the most serious problem we have is that our unwise spending from the excessive accumulation of unnecessary stuff has reduced our saving rate to the point of our being in dire straits whenever that inevitable bump in the economic road occurs and upsets our apple cart.
Capitalism is the freedom to produce/work and trade as one individually chooses. Nothing more, nothing less.
It allows both good and bad to occur. Good government would work to stay out of the way of the good occurring and limit/avoid to the extent possible the bad.
The alternatives to a largely capitalistic system always seem to be worse. Less freedom, lees good produced and more bad (although it is sometimes a more diffuse or evenly spread bad).
“That’s a problem as depraved and far more dangerous, I think, than sex and drugs and the devil’s music.”
Methinks that those problems are interlinked with the love of money problem. The above listed problems shun work and desires instant gratification. That’s the same kind of attitude you see in the addicted lottery ticket purchaser.
“I don’t want to work! I just want to bang on the drums all day!”
One caveat to dave ramsey:
He’s good at getting you out of debt if you are already in a house. If you do not already own a house, and you follow his advice you won’t have credit to get a loan for a house. I followed his advice and could not even get an apartment. Thankfully my wife had credit by paying for gas and small things with a credit card.
You’re credit won’t be bad, you just won’t have any. Now if anyone knows how where I can live cheaply enough to save so that I can pay cash for a house I’d like to know.
Credit cards are a necessity, you just have to be smart how you use them. Only buy what you already have in your bank account and can pay off at the end of the month.
Other than that I love dave ramsey. He’s just not the only financial guru out there.
“Doesn’t this dovetail into the thread “Living on Less”?”
I’ll take “Shoes and the City” for $400, Alex.
“Doesn’t this dovetail into the thread “Living on Less”?”
I’ll take “Shoes and the City” for $400, Alex.
I don’t think these threads are that closely related. This thread deals with irresponsible spending. There’s nothing irresponsible about spending a lot of money on quality shoes, that is assuming that the money spent is within the customer’s means. I’ll grant you that the $3,000 price tag is debatable, but I have no problem with spending a few hundred on a shoe that is really well-made.
“Living on Less” is also a separate issue because it deals with accumulating too much stuff. I like to think that I spend my money wisely, but that often includes expensive, quality items that I actually use. Things that go unused after a year generally find their way out the door. I’d much rather have fewer, nicer items than a whole lot of junk.
Its the very nature of unfettered capitalism especially in the finance to create debt. Arcadia’s comments although somewhat of a caricuture is correct. Mercantalism is a system of trade that is highly regulated and is pursued with national interest in mind. Its goal is accumulation of national wealth (although in reality the wealth was for the governing elite) Capitalism is unfettered trade for the accumulation of wealth. Theoretically this could be for anyone’s benefit but those in power tend to insert enough rules as to ensure wealth security for themselves. Secondly, capitalism needs to continue a steady cycle of capital accumulation and capital investment in order to maintain a steady rate of growth. However, this cycle is rarely adhered to as conspicuous consumption diverts the capital away (see post #17) as does military spending. The present crisis of capitalism is a result of the lack of structure in the financial sector to ensure that capital investment is properly done and has long term shareholder interests in mind not the short term bonus structures of the employees. These rules were manipulated for the benefit of the governing classes not for the benefit of the economy. Captialism only works if people follow the rules, written or unwritten. Unfettered capitalism fails for lack of structure and direction.
KRM — the alternative is simple, good management of the economy without ideological adherence. Ironic, a Marxist is needed to point out the ideological adherence of the neo-cons and the need for pragmatism.