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Tuesday, December 13, 2011

The virtue of thrift

Robert Robb of the Arizona Republic newspaper wrote an interesting column on December 9. He quoted Obama’s usual oration about how the middle class is threatened by greedy and irresponsible rich people and how it is up to the government to save them from those who dare to become successful.

Robb points out activities like globalization and the destruction of free markets as a couple of economic reasons that the middle class lifestyle has become “more volatile and less secure” and that “traditional pathways to the middle class for those without a college education, such as manufacturing and construction, have been eroded.” There is no question that income inequality exists more today but is it the fault of those who are successful?

In spite of Obama’s doomsday status of the middle class, Robb points out that they are living better than ever compared to a generation ago. Houses are bigger, more and newer cars are owned, there are flat screen TVs throughout homes, most family members have access to the Internet everywhere they go via iPhones or Droids, and families eat out a lot more.

Robb then points out an internal factor that leads to increased middle-class insecurity: “the abandonment of the virtue of thrift.” Wow, do I ever agree with that!

Does anyone follow the old adage anymore about saving for a rainy day? It looks like those rainy days are here for a lot of people and as much as Obama wants to use the rich as a scapegoat, maybe many of the problems of the middle class are their own fault.

I grew up in the middle class during the 1950s. Both of my parents worked and I worked after school in a grocery store. We saved a portion of our income every week and when we wanted something special, we paid for it in cash. There were no MasterCards to max out and pay down at 24% interest per month. We didn’t have a new car every year with the latest bells and whistles. We also had a cushion for intangibles like the furnace needing to be replaced or a bad economy.

Today, people want to have everything NOW! It’s so easy to pull out a plastic card to buy that new luxury while considering how to pay for it is a minor detail. In Scottsdale I see young families with a couple kids, two SUVs in the driveway, and one income. I wonder how they can possibly stay ahead of the curve.

If the number of BMWs, Mercedes, and other luxury cars I see with expired license plates is any indication, there has to be a problem. After all, renewing your car registration isn’t near as important as paying for mom’s gym membership is it?

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