I’ve heard a lot about foolish spending lately. Most recently it’s million dollar bonuses at AIG. Before that it was a lavish executive retreat. A few months back it was an office bathroom renovation.
Foolish spending is nothing new. A few years ago I heard of a major corporation paying $210 million dollars to a CEO (who is now running Chrysler) to make him resign. Sounds pretty foolish to me.
But who’s to decide what counts as foolish? We’re going through a time when government is taking over large swaths of the business world and legislating definitions of foolishness. “Excessive” pay is now deemed foolish, and the tax code is being re-written to punish the recipients of foolish largess. They don’t seem to understand that if congress has to approve of economic activity to make it legitimate, there will be much less economic activity.
I think yachts are excessive. I’ve never had a yacht and never thought I needed one. Years ago when the luxury tax was increased to hit yachts, it didn’t bother me. I wasn’t one of those rich guys out to buy a yacht. It’s also a good thing I wasn’t one of the not-so-rich guys who built or maintained yachts. If so, when the rich guys stopped buying yachts (that’s the message they got from the increased taxation), the yacht builders took the hit. Didn’t hurt the rich guys. They were still rich.
I’m sure some people think my industry is foolish. Can you imagine giving ten percent of your income to something as foolish as a church? If people stopped giving to churches just think what they could afford: new cars, second homes, nicer vacations. But then some of us would be out of a job.
I’m not a big spender. I never have been. Family members tell me it’s genetic. If everyone was like me we’d have a much smaller economy. Do our political leaders want everyone to be like me? Or do they want people to spend freely (like they used to) so the economy will recover? Will they promulgate a list of acceptable things to spend money on?
Maybe the government is hoping to do all the spending itself. Their wisdom is surely greater than that of the ordinary human. They know how to save money, too. Some are really creative. I’d rather see them get out of the way of us ordinary fools at the bottom of the food chain.