President Barack Obama's inauguration speech today was a stirring defense of the role of government in the life of individuals. It also took on the very popular meme in the personal finance world, that all bad personal finance events are a result of ill planning and extravagant spending. I'm not sure Barack Obama intended to do that. But he did and I want to thank him for it.
The moment came about half way through the speech. President Obama was reminding his listeners of the need for a social safety net, pointing out that the existence of such programs as Social Security, Medicare and Medicaid do not make us “a nation of takers,” they instead mark the United States as a place where we take care of one another. Anyone can suffer a bout of misfortune, and suddenly have nowhere to turn. In the words of President Obama:
We recognize that no matter how responsibly we live our lives, any one of us at any time may face a job loss or a sudden illness or a home swept away in a terrible storm.
This is not a common belief in the world of personal finance. All too many of our self-appointed advisers spout a series of nostrums that could be best be described as what would happen if Ayn Rand’s self-determination met a Victorian morality tract.
In this view of life, we are all responsible for our financial fates. We can, as Dave Ramsey proclaims, refuse to take part in an economic downturn. We don’t have enough money saved, not because it’s next to impossible to save up enough money to get one through a bout of unemployment lasting more than a year or a major health care crisis, but because we frittered away our savings on designer coffee and other small extravagances. One even sees call to “stay healthy,” as though people just ask for cancer or heart disease or disabled children so they can get on that great government social welfare bandwagon.
What gives this sentiment a particularly distasteful feel is that we are being lectured on self-responsibility by men and women who wear designer suits on television, and are worth millions of dollars. Suze Orman might tell us to “stand in your truth,” but when pressed on her own personal budgeting, she says she only flies private jets when travelling on business. Would that we all had such financial problems.
Don’t get me wrong. Of course, we should all strive to lead the most financially responsible lives we can. But no one – to the best I can determine – is arguing that we should lead lives of reckless monetary abandon, spending like the proverbial drunken sailor on shore leave. However, bad things do happen to even the best savers and investors. Foreswearing a Starbucks latte cannot prevent ill fortune. Refusing to take part in a recession can’t stop it from impacting you or your loved ones.
Instead of talking tough to those on who have encountered economic bad luck, let’s acknowledge that awful things happen to people in this world through no fault of their own. A good society recognizes this and responds not with contempt and lectures, but with mercy and aid.
