Tuesday, October 21, 2008
Our Bad Economic Habits
Fareed Zakaria (whom I respect though don't always agree with), had one of the best articles I've seen regarding the financial meltdown in the last issue of Newsweek. His premise is that this meltdown could have a silver lining if it leads us Americans to kick all of our negative financial habits that we've grown accustomed to over the past three decades, especially our "buy now, pay later" mentality.

I also especially liked Zachary Karabell's article about the end of the "ownership society", which reminds us that homeownership alone will not create a healthier society - we also have to make sure we're protecting workers. For instance, he says:

In the United States, the shift away from corporate pensions to 401(k) Individual Retirement Accounts plunged millions more into the equity markets and loosened the traditional connection between companies and workers, which was one element of that 1950s dream that conservatives such as Bush conveniently forgot. The ownership society of the 1950s was anchored by a labor movement that made sure that workers received something resembling their share—remember Truman's Fair Deal? The deal for the past eight years has been fair to merchants of capital, and then some, but to the tens of millions on the receiving rather than originating end of those mortgages, fairness has been in short supply.

Excellent point.

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posted by Mike Clawson at 9:35 AM | Permalink |


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