by Dave Barry
Yes. But that probably won’t happen. Because, fortunately, the public prefers not to think about economics. Most people are unable to understand their own telephone bills, let alone the U.S. monetary system. And as long as we don’t question the big eyeball, Tinker Bell is safe.
OK, now you know what money actually is. (Don’t tell anybody!) The next question is: How come some people have so much money, while others have so little? Why does the money distribution seem so unfair? Why, for example, are professional athletes paid tens of millions of dollars a year for playing silly games with balls, while productive, hardworking people with infinitely more value to society, such as humor writers, must struggle to make barely half that? And above all, how can you, personally, get more money?
We’ll address these questions in future chapters,* 3 which will be chock-full of sure-fire, can’t-miss, no-nonsense, common-sense, easy-to-apply, on-the-money hyphenated phrases. You’ll be on your way to riches in no time! All you have to do is really believe in yourself! Come on, show that you really believe! Clap your hands!
Also, just in case, you should get some jerky.
Why Does the Back of the Dollar Have a Pyramid and a Giant Eyeball?
There is actually a simple explanation for these two seemingly odd symbols:
Back when the Founding Fathers were designing our currency, they were looking for an image for the new nation, an image that would symbolize the concept of something strong and massive being watched over by something all-seeing and wise. After much discussion, what they came up with—as you have probably guessed—was a picture of an owl standing on an elephant.
The Founding Fathers passed this idea along to the artist hired to do the engraving of the printing plates for the dollar, whose name was Phil. As it happened, the day he did the dollar, which was his birthday, Phil consumed what historians now believe was at least two quarts of whiskey, and for whatever reason—the only explanation he ever gave was “the squirrels made me”—he engraved a pyramid with a giant eyeball on top of it. Unfortunately, the Founding Fathers, who were in a hurry to get the dollar printed so they could spend it, failed to notice this until it was too late. Fortunately, however, they did catch the error on the front of the dollar, where, instead of George Washington, Phil had engraved a fish playing tennis. Otherwise we might live in a very different nation today.
2
HOW THE U.S. ECONOMY WORKS
Adam Sandler Is Involved
THE ECONOMY IS A LARGE, complicated thing that is difficult for regular untrained people like you to understand. Fortunately, in college I took economics for the better part of an entire semester, during which I took time out from my busy schedule to attend several actual classes. So in this chapter I will explain how the economy works, with certain key words in boldface type to indicate that they are darker than the other words.
The largest single item in the economy is the Gross National Product, or DNA for short. This consists of everything that is produced by the labor force after the labor force finally gets to work and finds a parking space and has some Starbucks. At one time the Gross National Product consisted of both goods and services, but today pretty much all physical objects are manufactured in Asia, which means the U.S. workforce is engaged in the service economy, consisting of 83 million people in cubicles furtively sending and receiving personal e-mails. Also there is a small remaining agriculture sector, consisting of maybe 15 people in Nebraska or someplace who grow soybeans, although nobody knows what they do with them.
The sum total of the Gross National Product is several trillion dollars, of which one third is sent to the government in the form of taxes for the express purpose of being wasted. Another third goes directly to Bill Gates. The remaining third is divided up into wages and prices, which go up and sometimes, in the case of wages, down, in response to the law of supply and demand, which states that if there are fewer than two outs with runners on first and second base . . . no, sorry, that’s the infield fly rule. The law of supply and demand states that if you have too much of something that not enough people really want, such as movies starring Adam Sandler, the price is going to go down until it reaches $1.99 per DVD; whereas if there is an undersupply of something, such as whatever toy every child in America including yours wants for Christmas, but the toy manufacturer makes only 25 units of this toy for the entire freaking world, you will pay however much it costs you to get it after trading punches with other parents at Toys Backwards “R” Us.
If all the prices in the nation go down at once, that is called deflation, and the way to correct it is to wake up from the dream you are having, because this never happens in real life. In real life, all the prices always go up, a condition that economists call inflation, or, for short, normal. If inflation gets to be too bad, Congress holds a hearing at which the nation’s leading economists, using sophisticated data collection and computerized modeling, present a detailed statistical analysis of the economic situation, after which they light a bonfire and sacrifice a live virgin congressional intern.
The resulting aroma summons Alan Greenspan* 4, who is the chairman of the Federal Reserve Board, a mysterious organization that controls the economy from its secret Batcave-style headquarters far beneath the surface of the earth.
When Greenspan emerges from the ground, he looks around at the economy to determine whether he can see his shadow. In this respect, he is similar to the professional groundhog Punxsutawney Phil, although as we see in the photographs below, there are distinct physical differences between the two:
Photography Credits
After he has looked around, Greenspan makes an ambiguous remark, and everybody tries to figure out what it means. This is not easy, because Greenspan is crafty in his choice of words. For example, two years ago, in a speech before the Economics Council of London, Greenspan said: “What has one foot on each side and one in the middle?” This remark sent shock waves throughout the world economy. Investors lost more than $14 trillion in the resulting stock market plunge, and several hundred corporations went bankrupt, with a resulting loss of millions of jobs. It wasn’t until nearly a month later that economists figured out that the answer to Greenspan’s question was: a yardstick. But by then the damage had been done.
Sometimes these misunderstandings aren’t really Greenspan’s fault. The stock market crash of 1987 resulted from an incident at a luncheon when he was simply trying to tell the waiter that he wanted ranch dressing instead of vinaigrette.
If the economy appears to be heading for real trouble, Greenspan will raise or lower the prime rate. This is a very important economic thing, but unfortunately I was unable to attend the specific classes in which it was discussed.
The United States also engages in international trade with other nations, wherein we buy things that they produce such as cars, computers, televisions, clothing, furniture, steel, cell phones, and pretty much everything else, and in return they buy things that we produce, such as Starbucks franchises and movies starring Adam Sandler. If they fail to buy enough things from us, we have a trade deficit, and if it gets really bad, we have to remind everybody that in addition to Adam Sandler we have a lot of nuclear missiles.
Whew! It has been a lot of work, explaining the entire U.S. economy, but now that I’m done, you know as much about how it works as the people who are actually running it. You probably think I’m kidding.
3
MANAGING YOUR PERSONAL FINANCES
REMEMBER THE FABLE of the grasshopper and the ant?
The industrious ant worked hard all summer long, harvesting pieces of food dropped on the sidewalk in front of a Taco Bell. But the lazy grasshopper spent the summer frolicking and downloading Internet porn.
When fall came, the ant was snug in his anthill with a wad of rancid salsa the size of a volleyball. But the grasshopper had nothing to eat. He went to the ant’s nest and said, “I’m starving! Can I have some . . . YUCK! What’s that smell?”
“That’s my food supply!” sai
d the ant, who was a generous ant, “and I will gladly share it with y . . .”
FWOOSH
At that moment they were both burned alive, because the ant had built his nest in a playground frequented by inquisitive young boys with access to lighter fluid.
What financial lesson does this fable teach us? It teaches us that, in selecting real estate, the three most important factors are: location, location, location. But this chapter is not about real estate. This chapter is about managing your personal finances.
Do you have a good “handle” on where your money goes? To find out, ask yourself if the following statements describe you:
• You’d like to save money for the future, but it seems there’s never any left over after you pay your bills.
• You have several credit cards, and you can never quite get the balances down to zero.
• You make large purchases on impulse.
• When you buy things, you often receive pennies in change, and you put these in a jar or some other container. Over the years you have accumulated roughly 17,000 loose pennies. At one point, you actually bought penny wrappers, but you never put the pennies in them, and you no longer know where the wrappers are, and you have heard that the banks don’t really want them anyway. You frankly have no idea why the government still MAKES pennies. All you know is that you are going to die with these fricking pennies in your possession.
• When you wake up in the morning, you have to pee.
• Twice a year, you change all your clocks by an hour, but you don’t really know why.
• You occasionally bet on sporting events, and you secretly believe that, by doing certain things such as positioning your hands in a certain way, or not looking directly at the television set, you can affect the accuracy of a field goal kicker thousands of miles away.
• You have convinced yourself that your sexual fantasies are normal.
• Even the one involving the penguin.
• At weddings, when the organ plays “Here comes the bride,” your brain immediately responds with: “Big, fat, and wide.”
• When you watch The Wizard of Oz, it troubles you that Glinda, the so-called “Good Witch of the North,” is actually quite nonhelpful to Dorothy. Like, at the beginning, she’s all vague about the power of the ruby slippers, as if she has no idea what they can do, and then at the end, when Dorothy has gone through living hell to kill the Wicked Witch of the West so she can go back to Kansas, Glinda shows up and—guess what!—she knows exactly how Dorothy can use the slippers to get home. When the Scarecrow asks Glinda how come she didn’t just explain this to Dorothy in the first place, Glinda gives a lame explanation about how Dorothy wouldn’t have believed her, when in fact from the start Dorothy totally believed everything Glinda told her, including this lie that the “Wizard of Oz” was great and powerful, when in fact he was a drunk with a smoke machine (as if Glinda wouldn’t know that). So what is clearly happening here is that Glinda was just using Dorothy to kill the Wicked Witch of the West. What a bitch.
• Speaking of movies: When you’re at a movie theater, and your movie is about to start, you always end up in the concession line that doesn’t move because the people in front just can’t decide what they want, as if they’re up there trying to negotiate a Middle East peace settlement instead of choosing between popcorn and Milk Duds—FOR GOD’S SAKE WILL YOU MORONS JUST MAKE UP YOUR MINDS??
• Sometimes, when nobody is around, you scratch your private parts with a hairbrush.
• You do not keep a detailed household budget.
If any one of these statements caused you to think: “That’s me, all right!” then your personal finances are in serious trouble. What can you do about it?
One important step, of course, is to purchase products carrying the brand of a popular financial guru such as Suze “Suze” Orman. If you don’t know who Suze is, turn on your TV right now and tune it to any channel, including the Cartoon Network. There she’ll be:
Suze always has a smile on her face—the radiant, confident smile of a person who will not hesitate to kill anybody who gets in her way. But she’s also smiling because she has helped millions of people who have learned the secrets of wealth by purchasing her many bestselling books and audiotapes, including Suze Orman’s Financial Guidebook; The Road to Wealth: A Comprehensive Guide to Your Money; The Laws of Money, the Lessons of Life; You’ve Earned It, Don’t Lose It; 9 Steps to Financial Freedom; The Courage to Be Rich; Here’s Yet Another Suze Orman Book About Money; You Might Think That at Some Point Suze Orman Would Run Out of Ideas for Money Books, but You Would Be Wrong; and Buy This Money Book or Suze Orman Will Rip Out Your Throat with Her Large Carnivorous Teeth.
The reason Suze has sold so many books is that she offers a clear, simple, common-sense message that resonates with everyday people: You pathetic loser.
As Suze explains, because of your loserhood, you’re probably doing many stupid things with your money that you’re not even aware of. For example, let’s say that, every morning on the way to work, you stop at Starbucks and buy a latte for $3.95. It doesn’t sound like much, does it? But suppose that, instead of spending that money on coffee, you set it aside each day. What would happen?
First of all, without the caffeine, you’d fall asleep in your cubicle at work and get fired. But look at the financial upside! At the end of just two working weeks, you’d have saved $3.95 per day for ten days, which works out to, let’s see . . . carry the 6 . . . OK, it’s nearly forty dollars. That’s right: You would have saved enough money to invest in a half keg of beer—enough, if you manage it properly, to maintain a serious buzz for an entire weekend. THAT’S the kind of long-term financial thinking Suze and I are talking about.
But to achieve this kind of result, you need to develop, and stick to, a Personal Financial Plan. If you’re like most people, you’re always thinking of reasons why you haven’t made a Personal Financial Plan, like “I don’t have the time,” or “I’m no good with numbers,” or “I’m being held prisoner in a cave by a lunatic who believes he is taking orders from a bat.”
Well, Mr. or Ms. Excuse-Maker, it’s time you stopped whining and started taking charge of your financial situation. It’s easy! You just need to follow these steps:
1. Analyze your cash flow. “Cash flow” is a term that accountants use to describe the flowing of cash. To analyze your cash flow, first sit down at your kitchen table, put your head in your hands, and think really hard about the following question: “Where the HELL does all my money go?”
When you have figured out the answer, you should make a pie chart to help you graphically visualize your cash flow. It should look something like this:
Where Your Money Goes
When we analyze this chart, we see that your biggest area of concern, cash-flow-wise, is your Miscellaneous. This is where you need to cut back, by not spending so much money on frivolous and unnecessary items. Your children, for example. Chances are that, like most kids today, they want you to buy them every new fad item that comes along, so they can be like their friends. Be firm with them! Tell them: “Just because your friends have food, clothing, and medical care, that doesn’t mean YOU have to have those things.” (We’ll have more on reducing the high cost of children in our chapter on education, under “Steering Your Child Away from Harvard and Toward a Cheap, Crappy College.”)
You can also save on your household expenses by using time-tested homeowner money-saving tips. For example: Do you use toilet paper? Of course you do! No shame in that. But when you’ve used up the roll, what do you do with the little cardboard tube? You throw it away, right? I bet that, over the years, you’ve thrown away hundreds of those little tubes. But if you save them in a box, at some point down the road you’ll have collected enough so that you can put them to some kind of clever, money-saving household use. Although it beats the hell out of me what that use might be. I’m a financial expert, not Heloise.
Another way you can save money is to avoid using
your credit cards. Oh, sure, it’s easy to “whip out the plastic,” but it’s also a bad idea. Let’s say you’re at a convenience store, and you buy a can of Diet Coke costing a dollar, which you pay with your credit card. For openers, the people in line behind you—especially if I am one of them—will silently curse you, because now they all have to wait while the cashier gets authorization from Taiwan or Mars or wherever for your stupid one-dollar purchase.
But also, that purchase is going to be more expensive than you think. By the time you have completely eliminated all traces of it from your credit card statement, that “one-dollar” Diet Coke will have cost you—get ready—$386.52!
Does that seem like an absurdly high number? OK, let’s analyze it. Assume that your credit card company charges you an annual percentage rate of 14.4 percent, and that you pay one half of your balance each month. Now do the math.
Ha ha! I am just kidding, which I will indicate here by inserting the international symbol for lighthearted jesting:
Suze and I are laughing because we know that there is no way in hell that you can do the math. I can’t either! I just made up the $386.52. This, I believe, is also what the credit card companies do. I believe they put random, meaningless numbers on our statements, because they know that we, their clueless, math-impaired customers, will not challenge them. It would not surprise me to learn that the credit card companies have an industry-wide competition to see who can get a consumer to accept the most absurd credit card balance. Each year they announce the winner at a big awards banquet: