Frugal Goes Negative

07Dec10

Aldous Huxley once wrote that the using language was a tricky business. It was easily manipulated for propaganda and other corrupt purposes. He advocated teaching everyone how language is used to communicate and understood on various levels. Underneath his assertion was a fear that power would corrupt the language and, thus enslave people.
money, frugal, save, economists
These days everyone from astro-turf organizations to zealous politicos use language to manipulate, cow and sometimes inspire. Using the various media outlets available, these groups broadcast their ‘messages’ to an increasingly susceptible audience.

This concept came up after some recent economic news was published. These articles were written by the well placed, and hopefully the well intentioned cognoscente. However the language they used was insular, obfuscating and negative bringing into question who was their audience and what were they really trying to say
money, frugal, save, economists
The first article was published by the Federal Reserve Bank of New York. It came out on November 16. The thrust of the article was how Americans had forgone their profligate spending ways and were turning to the traditional values of thrift. Smartly these Americans trimmed $1 trillion dollars of debt from their households since 2008. They understood their family’s financial well being sat with themselves, and not by going deeper into debt for short term gain. The long term health of their families lay with saving money and being frugal with their expenses.

The NY Fed warned that this trend would continue for the foreseeable future. They further warned various governmental agencies on the national, state and local level that projections for their revenues would be impacted by these actions. Savings by the general public would mean less tax revenues. They should prepare accordingly. The NY Fed called this process ‘deleveraging’.
money, frugal, save, economists
Deleveraging? Heck, even my spell checker questions its usage. Rather than call it what it is, saving and getting out of debt, the pompous NY Fed decides creating a word that only they can understand and one that has a strongly negative connotation. Yet it’s meaning is simple. It means families are getting out of debt and saving money. They are being thrifty. Deleveraging means being a frugal, smart with your money person. Hardly a negative action, but given a negative word.

Left on its own, this may have slipped by the radar, but Booz & Company did an extensive survey on current American economic sentiments. The conclusion was one where most people feel shaky. The economy is sputtering. Jobs are tenuous. The more affluent American are deferring purchasing goods and services while the less affluent are trading down.

It is in this latter category where the writers go for lack of clarity and use bizarro logic. This practice of trading down to save money on the family budget is called “unpunished experimentation”. This took a bit to figure out, but what they mean is rather simple. Instead of buying brand names with their attendant higher prices for marketing, shoppers are switching to lower priced store brand names. In other word, we’re buying generic peanut butter, not nationally advertised brands. And guess what? Shoppers are finding that the generic is just as good. They weren’t punished with illness, bad taste or something equally terrible. This is “unpunished experimentation.”
money, frugal, save, economists
Booz & Company’s conclusion, many, many folks won’t switch back to the expensive stuff even if their economic situation improves. ‘The New Frugality’ is taking hold.

Here it is in a nutshell.

According to the economists and people running the world of money, Americans are deleveraging and experiencing unpunished experimentation. Sounds awful doesn’t it?
It isn’t. Americans are simply not buying the hipster generated snake oil being shoveled down their throat for the past four decades. Aldous Huxley would look at these “nu” words and conclude he was on an LSD trip.

But let’s clear through the obfuscation. Americans aren’t delveraging. They aren’t going unpunished. They are doing what their grandparents did – saving money, finding acceptable alternatives and taking care of their families. They are becoming Frugal Yankees. The disconnect is not with the average family, but with the economists. Their vision may have value in discerning policy, but their couched negativity is indicative of bin disconnected from day to day reality.

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Find out more about the Frugal Yankee at FRUGALYANKEE.COM

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