Luckily, the majority of Americans today have more resources than they need to lead a relatively comfortable life. Until very recently a good number of us were, as the old saying goes, living high on the hog. The stock market was going up and up. There was no reason to suspect there would be a very negative turn of events.
Many of us are still living comfortably.
For those who aren't, however, the financial catastrophe we've recently encountered is making life exceedingly difficult. No job. No money. Luckily, government has been quick and generous in buffering many problems. But there will be an inflationary limit to our printing of additional money.
What to do? Former President George W. Bush advised us to go shopping. Our capitalistic economy is geared, oiled, ready and waiting for buying and selling, he said. And the selling wasn't just of necessary goods and services. With additional assets, folks bought because of a great host of motivators:
Will my purchase offer me additional services, whether necessary or simply because "I want more"?
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Will what I'm buying look better than what I already have? Will it be more luxurious?
Will it be a little bigger or a little smaller, in keeping with current trends?
Will it go faster?
Does it offer enhancements like taste, sex, vacation travel, etc.?
And this list goes on and on.
More is always better. But more of what? More stuff we may come to want. How will we know? We may see somebody who has one. We may see compelling ads on TV that demonstrate how happy folks are who have one. Buying makes capitalism hum.
What about money? That's where credit comes in.
The financial geniuses who engineered us into our current catastrophic financial problem played this hand of money-making cards just a bit beyond the realm of realism. Credit was available in a multitude of ways.
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Additional money -- in the form of bonuses for the salesmen of credit packages and even larger bonuses for the executives in the financial companies -- became enticement to make credit packages even more enticing.
The targeted financial dreams became more difficult to realize with the old tried-and-true procedures. They were too cumbersome, too slow. But beaucoup money attracted creative individuals, and where there was a will they found a way.
Bundle up those toxic mortgages and arrange an AAA rating. When the goal is more money, more quantity, the matter of quality gets quickly shunted aside. And it did -- in spades!
Unfortunately, the money dream walls were not adequately supported and they came tumbling down. It is going to take a very long time to put Humpty Dumpty back together again. While the larger financial structure is being rearranged, we can all tend to our personal knitting.
We can live with less.
I can live with less.
Let's do it.
BERNIE HUGHES of Superior is professor emeritus of educational administration at the University of Wisconsin-Superior.
