"What could be more important than saving money?" one might ask. Surely, we know there are issues more important than money, but the question does come to mind, "Why does one save?" People save money for a sense of security, for future needs and wants, because they perceive of no worthwhile object or service they have to have right now.
Philosophers and economists have been aware for centuries of, while having different names for it: the paradox of thrift. Should I spend or invest my money now or should I crawl back deeper into my cave?
One of my grandmothers was born in a community near the small city of Vaxjo in the south of Sweden about 125 years ago. Hilma Adamson came to this country by herself when she was 16 years old. Gram was an uncommonly creative, conscientious and adventuresome person, just like so many other young people who came to America from the Old World. She made money from stock appreciation in the 1920s. She was fortunate to have worked for people who gave her good advice about the stock market.
When I was born in 1930, she opened a savings account in my name and made regular deposits to that account until I graduated from high school. When she presented me with the pass book, it was paying 3 percent. Notwithstanding her prior successes with investments, she chose to help assure my future by opening a savings account rather than purchasing shares of stock in a sound, recognized company.
The 1930s, as a few of us will remember and others are aware, was a time following the market collapse of 1929, some 79 years ago. Confidence in the future was desperately low. About 25 percent of the population of America was unemployed. One of the all too realistic musical tunes of the day was, "Brother, can you spare a dime?"
Those days of the Great Depression were hard times. The government fortunately learned lessons that were helpful in subsequent years. Individual bank deposits, for example, became insured by the federal government, and the government provided funds for roads, bridges and public buildings. Bank failures of the '30s were more individually disastrous than similar events since then.
Saving resources during times of declining economic confidence provides some individual comfort for those able to save. Ironically, at the same time caution and saving prolongs the general economic downturn by withholding money from trade and commerce essential to a good economy.
Availability of credit is vital to a free enterprise society. Individuals, small companies and large corporations have to be able to borrow money at reasonable rates as they need it, often times daily, weekly and monthly, as a natural course of doing business. The lenders in return have to have confidence that the funds loaned will be repaid. Our situation on Main Street now is not as dire as 1929 and 1930, but few have little doubt that these are troublesome times.
America has just come through an exhausting national election as it had, similarly, in the early 1930s. New programs were initiated in the '30s. We look for new programs now that will stimulate broad employment to build fuel efficient cars, stimulate energy independence, move toward a cleaner and safer society and more.
These are changing times. We may have learned that, as much as we value freedom of expression, entrepreneurial opportunities, and the "naturally" correcting processes of the markets, Wall Street, even the most skilled and competent professionals, need overseers or a process for detailed overview and guidance. How to perform respectful and yet effective supervision is a challenge.
What would my dear, sainted grandmother, who even years later had a slight sing-songy Swedish accent, do now? My guess is she would have been buying bargain basement shares for some weeks now for her own account of sound stocks with secure dividends. She always seemed to have an eye for the future.
On Jan. 20, our new president is not likely to say, "All we have to fear is fear itself!" That has been said. He is very likely, however, to propose new plans for action and new words of hope and confidence equally compelling.
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