Marketing needs customers that can afford to buy. Unfortunately, the target audience can often be people that forgo savings so that they can spend. Interestingly, this tendency to overspend or spending beyond one’s means is often blamed on marketing. That may be one example of ‘marketing insanity.’ The evidence points to other causes such as easy credit (consume now and pay later) Getting Out of Debt. Consumers have more awareness of cash flow (buy now your income will always go up in the future), Perceptions of Income Growth Improve Housing Prospects. A related impact on lowering savings is the progressively increasing tax rates of federal income, social security-related taxes, state, and local How Taxes Reduce Savings. This effect is called the tax burden.
Recently there have been a series of news articles that want to reinforce perceptions of wealth decline. Primarily they have relied on some dubious claims of disparity of savings across generations. I read these types of articles with dismay because, first, they are inaccurate. Second, the inaccuracy appears to be intentional with that intent to promote an agenda. This approach seems an example of the classic hidden agenda. Third, and more challenging, these same inaccurate articles are copied and further distributed by traditional and widespread media outlets.
Let’s look at some of the recent headlines and then debunk some of the Headlines. Millennials Less Wealth Versus Boomers. Contrasting this article is 25 % of Millennials Report $100,000 in Savings, which is correct. Well, they both may be right in their way, but the second is more accurate. The claims of overall savings disparity (oh, and by the way, the same claims are made for income disparity) rely on reporting total generational savings. That is misleading as the baby boomer generation is generally figured at 76 million. The millennials generation in these articles is limited to 70 million. Even equal savings per person will show Millennials lagging Boomers.
Not surprisingly, a closer look at the numbers reveals not much has changed across the generations. That may be reflected in the new report that 25% of Millennials have over $100,000 in savings compared to just 18% in 2018. So let’s see where the Millennials come out after their wealth accumulating years, and we adjust for segment population size.
Sure, there are some shooting wars in the Middle East. We are trying to stop the pillaging of our economy by the Chinese. And our political system sees the two parties fighting over what seems to be trivial. The politicians do not want you to think their fights are trivial. They want to obscure that what they are really fighting over and trying to hide is the total power grab by the Federal Government. It may be boring, but I think it is incredibly important to look at just how much of our money, we the people, the federal government is grabbing. It is probably the root of our wealth problem. And a closer look shows that more taxes is not the solution.
Okay here are some facts. I am going to be completely arbitrary and look at the Federal Budget the year I was born and compare to the present. I will slice it and dice it several ways so that those that like comparing apples to apples are happy. No fancy changes or squinty eye views. These numbers do not need to be massaged to make my point.
Federal Spending Adjusted for inflation Federal Spending in 1958 to 2018 dollars in 2018
Dollars $74.9 Billion $650.2 Billion $3.62 Trillion
Per person $414.30 $3,596.48 $11,158.80
Budget as % of GDP 15.5% 15.5% 17.5%
Deficit $3.315 Billion $28.78 Billion $785.31 Billion
There are several other ways to look at these numbers, but the ‘story’ remains the same. The Federal government is controlling more and more of the people’s money. With that control comes power. And it is my perspective that the money and power is what drives the elected officials and the bureaucracy to fight like heck to remain in control.
Even today with the unprecedented expanding economy, the Federal spending is not being lowered. The resulting deficits are not shrinking. And Congress is doing nothing to address the spending or deficit issue. Instead they find issues to distract and obstruct attention.
Just a little perspective, if Congress would just return to a budget that represents 15.5% of the Gross Domestic Product, it would lower spending by over $400 billion. This is not a presidential issue. Congress controls the budget. And they do not want or desire to limit their control. My perspective is both political parties are guilty of this motivation. It is time to consider genuine alternatives to the existing political parties.
At the very least, the next time someone in Congress starts throwing around a few billion dollars as waste, ask them what they are going to do about the over $400 billion congress has appropriated from the people.
I recognize it has been awhile since I posted. My prompt to start writing again is recently my life has seemingly been surrounded by the word principle. Either principles have guided my recent decisions around work, or I have heard the word used to justify a range of behaviors, or I am teaching a class in the Principles of Marketing. As I have reflected on these various uses of the word ‘principles’, I have come to believe that review of the meaning of the word is a great topic for this blog. I do not suggest I will add any further insights but rather I will revisit a topic that can always stand a review. Additionally, I think, reiterating the correct meaning of principles has an important implication. Such a review and discussion might be a first step in helping others as well as I make sense of the discord and impolite dialogues that seem to be occurring with increasing regularity in everyday conversations.
So, in this post we will look at the most common definitions. Unfortunately, not all use the term correctly. Additionally, others have difficulty separating the principle from the individual. It seems that truly understanding the term and then having coherent discussions about the principle and not the individual holds out promise for creating a foundation for civil discussion. As an aside, note that even this conclusion is founded on a principle that understanding leads to civility. And that of course can be debated.
I will suggest two common definitions of principles. The first is “a fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.” Secondly, a principle is “a rule or belief governing one's personal behavior”. While both definitions are very similar, the nuanced differences may hold a key to why even civil individuals may devolve into uncivil argument when discussing principles.
Here is my thought. When someone mentions that they are acting on principle, they probably mean the first definition. To them there is some fundamental truth that when you expand and explore that truth’s ramifications, there is chain of thought that leads to their actions. However, I suggest that many today instead focus on the second definition. That is unfortunate. The second definition can easily be misinterpreted. Some may incorrectly believe that the individual and the principle are intertwined and not separable.
The perspective that the principle is inseparable from the person has two unfortunate consequences. First, the discussion can quickly devolve into attacking the proponent and not the principle. A recent example I observed was an online discussion of baseball rule about fan interference of a fly ball. The current rule is that such interference is automatically rule the batter as out. The baseball player in this instance did not like the rule. Of course, the player had been called out. A fan correctly noted the rule was applied correctly. Rather than discussing the merits of rule, the conversation immediately became a name calling exchange. Comments became personals. This occurred on social media both the fan and player began questioning the other’s knowledge of the game and then even the other’s heritage. This of course was not very constructive. However, the conversation could have been.
Each had a belief system based on some principle. It is likely the player had an equity view that the point of rules is to make sure a fair outcome happens. The fan may have had a rule of law viewpoint. Each view, based on principle, is valid. There can be debate about the principle. That debate does not need to devolve into questioning either of the proponent’s knowledge, judgement, or other characteristic. It is time we all do better.
There is an additional reason to keep the person away from the principle. It is not as common but sometimes the proponent of a principle is personally not very pleasant. The personal attributes or lack of character is not a reason to discount the principle. I repeat that the definition of a principle starts with it is “a fundamental truth or proposition.” The merit of the truth does not rely upon the character of the proponent. The current president may be an excellent example of this observation.
Unfortunately, there is another element of activity around principles that also causes discord. That element is the misuse, misunderstanding, or deliberate misrepresentation of principles when justifying a set of actions. From the above example, it is possible that our baseball player and fan did not fully comprehend the principles that guided their arguments. (As an aside, I do not think this was the case). That might lead to frustration and an unfortunate reversion to earlier argument tactics such as name calling or bullying. That is a topic for another blog.
More problematic is the deliberate misuse or misrepresentation of the fundamental truth or principle as a justification for a set of actions. The simplest example I can think of is when a fraud claims altruistic motives for their actions and behaviors. This proponent conceals or lies about their motivations to fulfill self-interest. The principle of self-interest is not inherently wrong. However, it should be obvious that concealing or omitting self-interest as the guiding principle behind one’s actions leads to the arguments that devolve into the personal attacks. Perhaps we all have become acculturated to being lied to. We should not.
So, I clearly did not break any new ground. However, I did launch a discussion. Under full disclosure, there are two fundamental reasons I wrote this blog. One is based on some self-interest. I am frustrated with the level of civil discourse I observe. Selfishly, I want to see my society ‘do’ better. Second, I have a belief that speaking up when you see your society disintegrating is a moral imperative. Just at you cannot stand idly by while someone is in peril, neither should you stand by when your society is threatened.
I have one last comment. I plan to continue this discussion about principles. At this time, my plan is to introduce some topics in blog posts that can have two or more viewpoints. I am going to encourage comments and rebuttals. I may even play devil’s advocate. My hope is most readers and responders focus on the principles. But we all can observe and comment when the counter arguments veer from that approach. It may only be a few of us, but perhaps through practice and then repetition we can spread a retreat from the current state of uncivil discourse.