The Goldfish Economy

14 thoughts on “The Goldfish Economy”

  1. Capitalism wouldn’t work without suckers like your contractor. That’s why CNBC and all the other shouting channels are on, 24 hours a day, 365 days a year….

  2. As a contractor he is creating jobs. The people he is hiring may have hired him in the past. It’s only when you become an owner that you begin to understand the difference between an employee and a business owner. Also I know several contractors who use the finished products as write offs. He could be harvesting receipts for tax season. The analogy is we are looking into the fishbowl from the outside – we never really know what is going on inside that bowl.

    1. These two views aren’t mutual exclusive.

      My point is that the best time to buy and spend is during an economic crash when things tend to be on sale at a discount, and the best time to work and save is during an economic boom. That way you can comfortably ride out a period of lean times with little debt and fall back on reserves.

      Most people do the opposite. They binge when times are good and then crash when the market corrects only to find themselves with debts they can’t always service – typically for things they didn’t really need in the first place.

      Is it good to create jobs via spending? Yes. But if people pay cash from savings they tend to spend on things of lasting value and cultivate a version of economic activity that’s more sensible and durable. Putting a lot of extravagant items (or cheap plastic crap) on a credit card may temporarily puff up the economy, but it’s generally not an arrangement built to last when everyone gets laid off in the inevitable downturn.

  3. People don’t have goldfish memories, every single person who has any interest in real estate is telling them to update their homes, even those who should know better:

    http://www.strongtowns.org/journal/2016/10/23/portland-housing-prices
    “If you owned that single family home, would you install granite counter tops? Would you put in a Jacuzzi tub? Would you do an addition to create a theater room? Of course not. You own a home that’s worth over a million dollars yet it has none of the things a million dollar home would have and the reason is simple: you would never get that money back. The house is going to get torn down, whether it has granite counter tops or not. Adding them may marginally improve your life, but it doesn’t change the value and thus is a bad investment.”

    How do granite countertops improve your life? Why add a theater room instead of going to the movies? “none of the things a million dollar home would have” is a values judgement and it’s easy to see which direction it points in and that the ‘when you sell it’ is unsaid but implied as a requirement!

    Mr Money Mustache is great, but it’s him vs the rest of the world and so I don’t blame anyone if they can’t resist that kind of onslaught.

    Whatever. It’s just money. You can just say your contractor friend rented a nice lifestyle and took his last cent with him when he passed and left the rest of us the bill. Sucks for us, but it has to be somebody.

  4. I have two goldfish. They actually do have memories. When we make eye contact, they start getting excited because they think I am going to feed them. They swim up and down, shake their tales and almost do somersaults. They probably have better memories than the contractor.

  5. Could someone explain this gold fish memory, do people really have no self control, no ability to plan out the next year, three years, 7 years to retirement ….
    With a little planning, a reluctance to take on debt, some frugality thrown in, along with holding off on purchases that you can’t afford, as well as saving some cash and building up your Capital, you can be FREE, free to do whatever you want with your life. True you can’t do anything you want, but you don’t have to go to work everyday.
    Over the years I’ve come to think of Humans as a very aggressive and not necessarily that bright a species, please God I hope I’m wrong, or we’re going the way of so many other species and I don’t mean to the mall!

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