Working Smarter, and Harder

A couple of experts that I respect wrote this fine piece here (disclosure: I'm a researcher for one of them).

They make a fascinating point about how the American economy tripled expectations over the past 25 years, thanks to this nation's ability to innovate while others merely imitate. Coincidentally, BusinessWeek recently noted that Americans' debt-to-income ratio has doubled over these same past 25 years. Much more of our wealth is now in our homes, which we leveraged to the max and which now are declining in value.

That seems to make us more like the grasshopper and less like the ant of the ancient parable.

Working hard and spending wisely is not enough to keep you on top. No one worked harder or spent more frugally than the Depression generation. What gets you on top is the ability to innovate. What keeps you on top is the ability to work hard and spend wisely. We have the innovation down, but our instant-gratification culture doesn't have any concept of spending wisely. That's why I bemoan the current bipartisan attempts to save the economy, which place consumption on a pedestal high above production.

It would be nice to see a candidate show the courage to tell a debt-ridden citizenry (and an equally debt-ridden government) that the laws of economic physics do still apply. And it would be nice to see the citizenry not dismiss him or her as a crackpot.