Tuesday, February 21, 2012

save or consume?


Hal Pepinsky, pepinsky@indiana.edu, pepinsky.blogspot.com

February 21, 2012

I’ve just listened to a program on whether people in my part of the world should save more or use credit cards. In typical US fashion, the entire talk program was framed as addressing people’s personal financial issues, with the advice to consult a “certified financial planner,” which you can find for free at your local bank. At my bank, they are now called “wealth” planners.

As usual in US political culture, the question of how to improve social health is reduced to individual self-help. As usual, the larger question is ignored: For social welfare in my part of the world, should we be encouraging people to save more or consume more? At a social level, the two are simply antithetical. I remember that in the seventies, the Japanese were praised for their economic wisdom including high rates of personal saving. The Japanese were economic gods. How quickly economic gods fall from grace while we hang onto a mythical package about how to grow and prosper. I’m amazed by how freely we reframe issues of social and economic welfare. Fact remains: A society cannot “grow” while people save. Saving is a primary tool for us older folks being taken care of while our children feed our grandchildren. Saving and consumption are inherently, socially, opposite. “Growth” is incompatible with social security for our elders and children across our generations together. Let’s face it and choose how then to invest, personally and politically. I vote for saving and sustaining. Love and peace--Hal