The Naked Economist

-mag

For one, the marketing experts’ continuous bombardments through the years have worn down our defenses. It’s hard to turn a deaf ear to the beautiful music of must-have messages. Secondly, like teenagers we want to be like everybody else. If other people can have it, we lower our own standards. Thirdly, we have the issue of short-term thinking. Most everybody is guilty of this. The auto industry and the union both wanted us to drive SUVs so they would be better off. We bought them to make our family safer, but at the expense of other people’s families. In the process, we made the Saudis richer and ourselves poorer. Now the auto industry and their unions want us - the taxpayers - to bail them out, just like we did the banks. Again, we’re supposed to bail out the guys that got us into trouble the first time. Immediate gratification. So why were we so short-minded? Why did we buy houses we couldn’t afford? Why did the banks borrow us the money to do it? Why did the government encourage the banks to borrow us the money? Because of short-term thinking. A donut today is better than two tomorrow.

We have ended up living in denial that there even is a future and we have not been adequately financially educated to make the correct long term decisions for ourselves. A few people out there are making a lot of money from our misery. We need to make sure our children are better off than we are. Take control over your own life! Seize the opportunity today to control what you can, and then work to increase that circle of control. Put the long term into perspective. Figure on it. Put in in a spreadsheet. Experiment. Ponder it. Do it! All of us will be better off, well maybe except the ones that are living of your misery right now.

Read on about Instant Gratification.

Love this poster!

1. Ensure the rest of the world - our customers and vendors - that they can trust us enough to do business with us again. We won’t make it without them. If they think all they will get from us is protectionism, weapons and worthless pieces of paper with our dead presidents on them, they certainly will not trust us. Fortunately for them, that’s a loss of only 5% of the world’s population. We need them much more than they need us.

2. Establish programs to build our way out of this crisis - in an environmentally correct way. Our infrastructure has been neglected for too long and it’s about time anyway. One by-product will be that we put millions of people to work in production and they in turn will put even more people to work in service and support sectors. Another one will obviously be a healthier environment, which after all is even more important than our economy! Take T Boone Pickens up on his wind programs, make use of the natural resources we have - and build out the nuclear and clean-coal programs - or tell me, what alternatives do we really have?

3. Lower corporate taxes to slow or at least stop the flight to low-cost countries. Why do we voluntarily force away jobs that can be done here when we instead can keep the money in the country?

4. Pave the way to the American dream for the future generations. Provide world-class health care and education to all children and end the ridiculous practice of linking access to college funds to parent’s incomes. Of course, we must also provide the world-class health care to our veterans that got injured fighting our wars for us.

5. Establish a price-discovery mechanism for financial assets. See Jeff Miller’s article.

6. Lat but not least, remember that we got into this mess largely because of lack of regulation. Even Greenspan has admitted that capitalism isn’t bright enough to regulate itself. So implement intelligent and transparent regulation legislation that includes trading the by now infamous derivatives on regular exchange, instead of over the counter - or *under* the table.

I want you to take a look at : 24/7 Wall St.: Obama, Broke Now, And More Broke Every Day: Credit Default Swaps On US Debt