The American Bar Association conducted a survey of more than 14,000 attorneys between November 11 and 13, 2008, publishing the results in the January, 2009 issue of the ABA Journal, glibly entitled the “Special Recession Issue.” In response to this question—Who is most to blame for the recession?—came these lawyerly answers:
Financial Institutions 48%
Congress 14%
Federal regulators 11%
Presidents 10%
Lawyers 3%, and
None of the above 14%
We are not told whom or what is included within “None of the above.” One wonders if votes for either “I am” or “consumers” were included within the mailbags of responses.
The Associated Press story appeared in many city newspapers in December taken from The National Endowment for Financial Education in Englewood, Colorado. This advice includes the following admonitions to be provided to teenagers:
• Understand the difference between needs and wants
• Set financial goals and budget accordingly
• Learn if you’re a spender or saver, which helps with budgeting
• Always save a percentage of your earnings, and
• Start saving early
Reading the first two items alone is a show-stopper. How are elders to impart wisdom credibly to youth, when youth can see so readily that they are commanded what to do by those with no personal sense of financial discipline? How many members of the generation ranging from ages 25 to 60 have exercised any material financial self-control since the 1980s? If the figure is accurately reported today, the average credit card debt load of Americans is $11,000! Home equity lines of credit long ago ceased being used as designed–for home enhancements. Indeed, many borrowers use their home equity lines to pay off their credit card balances, to “clear room” for yet more plastic-card charges. HUD’s generally accepted definition of affordability is for a household to pay no more than 30 percent of its annual income on housing costs. How many American consumers have followed that rule in the recent past?
Face it: The entire purpose of advertising is to cast products and services in such lights as to eradicate the line between “needs” and “wants”—and that’s what Americans seem to yearn for: permission to need (so as to acquire) goods and services beyond their rational financial reach. Am I sanguine about the financial future of the American consumer? I wonder if there will continue to be millions of cases of “personal recessions” until a fundamental and personal change in the attitudes of individuals occur. Our governments cannot change attitudes; and no matter how ambitious the programs proposed by our incoming leadership, the outcome will not be to restore prosperity to Americans who won’t stop spending foolishly by relying on credit-gambles to achieve the ephemeral status of plenty.
In truth, government leadership does not lead in financial attitude-adjustment, by its very nature. Consider this kernel of wisdom from Thomas Sowell:
No political message has proven to be more welcome, in
countries around the world, in both democratic and undemocratic
nations, than the message that your problems are not your fault but
the fault of others—and it is they who must change, not you.

Applied Economics, Revised Edition, Basic Books, 2009

The genius of the American economic system is affording an opportunity to so many to achieve financial independence, if the individual is mentally acute, healthy and willing to sacrifice–and most times the price for prosperity is patience and expenditure of great energy. The so-called American dream is not a guarantee of homeownership or any other totem of affluence to anyone. On an individual level, we need to acknowledge that struggle is expected, and resume bending our backs and saving more than a token part of our earnings, so as to afford things in a future that is longer than 6 months distant.