These Financial Times

OK, let’s see. Derivatives; mortgage-backed securities and collateralized investments (which means stuff that is insecure and lacks collateral); credit-default swaps; tranches and bonds and TARPs oh, my; these are the words one needs today to throw around in casual conversation. In addition to the Rescue plan, formerly known as the Bailout.

For those of us who never wanted to know anything about the economy other than that it was, as Mr. McCain recently assured us, fundamentally sound, all these additions to the everyday vocabulary can be more than bewildering. But we are learning.

Being married, as I happily am, to an old-school economics geek who supports the family quite comfortably with online NYSE and Nasdaq reports plus old-fashioned ledger and a hand-held calculator, my learning curve has enjoyed patient support. Primarily in the form of courses in Economics 101 nightly at the dinner table. He maintains, actually, that we are now up to somewhere around Economics 4; I’ve got my own doubts about retention of earlier class data.

But here’s what I do know: Father knew best. As did Mother, grandparents and probably ancestors to the nth generation. And here’s what they knew and taught:

If you have a dollar, you put 10 cents in the savings account. Then you give 10 cents to the church (synagogues, mosques, etc would have qualified with the ancestry) and another 10 cents to your favorite educational institution, preferably the one that educated you in everything but Economics. The next three dimes go to the grocer and the next three to the landlord (or maybe, if you’re lucky, the mortgage holder.) After careful consideration, you might want to spend the last dime on an ice cream cone. Unless you decide to put it in a separate piggy bank for eventual purchase of a new coat. If the ancestors had approved of borrowing 10 cents from your cousin so you could buy the coat before winter – which they might or might not have – I’m certain that repaying the loan, next paycheck, would have come in before buying the next ice cream cone.

Worked for a long time; when did we forget?

1 Comment

  1. I have been getting so frustrated that I keep seeing “Bad Credit? No Problem!” signs up all over the place. And retail clerks are getting pushier than ever about trying to get me to sign up for credit cards with specific stores—you know, those terrible cards that have interest rates in the 20s. I keep hoping businesses and consumers will get back to making smart, basic everyday decisions about their money. But maybe I shouldn’t look to businesses to lead the way. Here’s hoping the consumers will start being prudent.

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