The Frugal Economist

Part 3: Jan. 24, 2009

The search for Spock. No, sorry, I mean, the wait for Obama.

As we waited for the new administration, it seemed like time itself slowed to a standstill. Each day, more companies failed, more employees were let go, and more wealthy celebrities revealed they were taken by Bernard Madeoff. And what a pal! Here’s a guy that stole 50 billion dollars from his friends! 50 billion! I’d be happy to have the net worth of Jimmy Buffet. This guy shot right past Jimmy Buffet to Warren Buffet.

How did you do that? How do you befriend people and steal their money?”Hey, John, I see you have 75 million dollars just lying around? How’d you like me to take that off your hands?”

Meanwhile, the TV news gossips plow through their reasons for the crisis. “It was greed,” they argue. Or, “Something is out of whack in the system,” and a bunch of other nonsense that doesn’t even begin to realize the full complexity of a once-in-a-lifetime crisis that could only possibly have one cause: Geraldo Rivera.

So, currently, the dollar is worth virtually nothing. It now costs about 50 dollars to have breakfast in England, and being in Europe, that’s just for a continental breakfast.

And the banks continue bleeding, which is ironic, because now, they’re also short of deposits in the blood banks. I don’t know whether it’s all the new vampire movies or what, but the blood banks need a bailout so badly, Delta airlines is actually offering free flights for donors. Which raises the question: will Delta airlines even be alive long enough, for those donors to cash in on those flights? Cause, let’s face it, if anybody needs fresh blood, it’s the airlines.                                               

The good news is that some people are scaling back and rethinking their lives. They’re questioning whether they want to remain at joyless jobs, or perhaps, instead, do what they really love, whether its teaching yoga, baking cookies, swimming with the sharks, running with the bulls, dancing with the wolves, or playing Frisbee with the polar bears.                                       

But scaling back isn’t easy. I mean, wouldn’t it be ironic if the few remaining hippie communes and the Amish have it right? They might be the only ones truly depression proof. They are both already so scaled back, there’s not much further down they could go. It’s not like they’re suddenly going to lose their cell phones and hi-def TVs.                                                

But what about the rest of us, that don’t want to change our lifestyles? Well, if you’re like good ol’ Bernie, a pyramid scheme is always handy, but if you want even more money, rectangular schemes can quadruple your profits, and octagonal schemes can double that. I don’t know the term for a 16th sided object, but if you can come up with one of these, you can wipe out anyone stupid enough to believe in The Secret.      

Fortunately, the Internet offers incredible opportunities. You could, for example, send out e-mails promising men a better love life. While, I have no idea whether these products actually work, the fact, that I keep getting dozens of these messages daily, tells me, enough men are worried about this problem, these companies will last longer then 4 hours.                

You can also sell stuff on EBay. A good Fema trailer has to be worth something, if only, for the Formaldehyde.                      

Most importantly, cut spending. There are great deals to be had at your local dollar store for example. So, even though these stores have a lot of toxic Chinese products like toothpaste or dog food; for a dollar, that’s still a pretty good deal. After all, most dogs don’t brush that regularly anyway.           

While you’re cutting your expenses, you should also try to stop borrowing. If you must use credit cards, pay your bills the moment they arrive, because with interest rates up to 22%, you’re actually better off taking a loan from the mafia then from Amex. Because, even though the Mafia may break your arms, at least, they usually don’t take your house.                

If you absolutely must borrow, it’s better to ask family first, because they may not really expect you to pay them back. Friends, on the other hand, stingy tightwads that they frequently are, are usually not so generous. That’s why, in hard times, you have to ask yourself, is it better to have a good friend, or that good friend’s money. Personally, I figure, what good is a good friend, if you can’t take some of their money? Besides, if you have enough money, you can always buy new friends.

If you are lucky enough to borrow from a relative, or better still, have a relative pass on, remember, that tough times, requires tough love. There’s nothing wrong with adding a little arsenic to grandpa’s cereal. After all, since he probably lived through the first depression, you might actually be doing him a favor by making sure he doesn’t live through a second.

Harry Freedman has performed corporate comedy Put-ons and emceed for hundreds of Fortune 1000 companies, some of which have since gone under, including Arthur Anderson, Anderson consulting, Anderson Cooper, and pretty much the entire Anderson family. 

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Part 2, December 2008

The automakers fly to Washington in private jets. The 350 billion dollar bank bailout has vanished from sight faster then Siegfried and Roy. And my kid still wants an Ipod for Hanukkah.  So what do we do? Well, before you jump off a tall building, or a bridge to nowhere, let’s consider the worst.

A lot of people are probably going to lose their jobs, and some of them may become so desperate, they turn to crime. Ironically, that actually helps matters. Because the crime victims then have to replace their stolen valuables and their purchases stimulate the economy, which creates more jobs, etc, etc, which means, the worse things get now, the better off it will actually be later.

So, now that you’ve calmed down, let’s talk about how to stay afloat. First, make sure, whatever small amount is left of your investments are properly allocated. Most experts recommend a diversified portfolio that includes stocks, mutual funds, precious metals, and fear.

There are many schools of thought about what makes a good investment. For some, it’s securities, for some it’s bonds, and for practitioners of The Secret, it’s the belief that if you send money out into the world, it will come back fully grow, which unfortunately, seems to have only worked for the actual author of The Secret.

Next, invest by using income averaging. This is the system whereby you contribute a regular amount of your income every week, so you only lose a little bit at a time, rather then watch everything plunge into a financial black hole simultaneously.

The most important thing to do, is never, ever, under any circumstances, take advice from Suzy Orman, who’s main theory, is that if you stop drinking Starbucks coffee, and invest it at 10% interest, you’d have 200 billion dollars by the time you’re 35. I have 2 problems with that. First, I don’t trust anybody who doesn’t drink coffee, and second, who the heck gets 10% interest?

If you really want to save money, a cup of coffee is miniscule compared to the amount you can save by simply cheating on your taxes. Now, I know it’s illegal and all, but even if you get audited, it’s easy to avoid penalties by keeping your records properly.  Notice, I didn’t say keeping your records neat. I said keeping them properly. Because, while most accountants recommend that you maintain your statements in an organized manner, it actually makes it too easy for the IRS to hang you.

In contrast, if you keep all your receipts properly, in a large smelly box filled with thousands of old gum wrappers, dirty Q-tips, oily rags, used tissues, dental floss, and other unsanitary remnants of your disgusting existence on this planet, even the most diligent agent will weary of trying to sort through a mound of personal contents that belong in a toxic landfill.

Part 1 - November 2008

How did we get into this situation? I could sugar coat it and say it was the political system, or gluttony on the part of big business, but I won’t. It was our own greed. We all put money in stocks and mortgages we couldn’t afford, rather then the tried and true method of hiding it under our mattresses.

But where is it all going? A depression? The whole idea is mindboggling. I mean, the possibility of having to sell apples on the street is inconceivable. I don’t even want to sell plums and I really like plums, but they have a much shorter season when they taste good, so that means I’d have to consider fruits like cantaloupe, bananas, or honeydew, which are more bulky.

What I do know is that people are really scared. They’re worried about what’s going to happen to the job market, the mortgage market, or for that matter, the supermarket. Cause if Pathmark starts running out of things, then it’s time for all of us to head for the hills.

Young people are especially worried. Their job prospects are bleak, and they can’t afford anything, so about the only good news, is they still know how to download music for free, something I’ve never figured out, so at least if they go hungry, they’ll have a great to pass the time.

And what about Joe six-pack? What is he thinking? I think, he’s thinking, how do I get more beer. Will the government provide beer? If so, what kind of beer? And, Now that Budweiser is being taken over by a foreign company, doesn’t that make it an illegal immigrant beer?

So what do we do? Do we simply prepare for the worst, or is there a silver lining on the horizon? Well, history shows us that some good things came out of a great depression besides Seabiscuit and the Marx Brothers.

For example, some people took strange boarders into their homes to weird out their kids, which believe me, occasionally, has its benefits. Other parents were forced to send their kids away, to live with relatives who were better off. Which actually gave these parents their first chance in years to finally catch up on their sleep.

There are already some benefits from the current difficulties. For example, it’s been awhile since I’ve seen one of those sleazy late night real estate ads, with people gleefully declaring things like, “Thanks to Johnny Stucco, I made 10,000 dollars on my first house, with no money down!” Pretty soon, I think we’ll see these same people pouting, “Yes, I made 10 grand on my first house, but then I followed the rest of Stucco’s plan and bought 11 more houses, until the market collapsed, and I’m now living in Peru to avoid going to jail. May you rot in hell, Johnny Stucco.”                                  

Now, hard times can mean less travel and cheaper recreation. But it doesn’t mean you can’t find new ways to have fun by taking a creative mental vacation. For example, go to your local supermarket. There are products from all over the world. Mangos from South America, salmon from Norway, caviar from Russia, sushi from Japan, lettuce from Mexico, and glacial water from Glacia. Then, go to the fruit section. Pick up a papaya. Close your eyes, and pretend you’re in Ecuador. Hold up a pineapple. Feel the sunny warmth of Hawaii.                  

Then go home, make yourself a tropical drink and fantasize that you’re on vacation, sitting under a palm tree by a tropical blue green sea with pretty girls, and Pina Coladas. Are you there? Good, because that’s an AIG vacation.

Harry Freedman has performed corporate comedy Put-ons and emceed for hundreds of Fortune 1000 companies, some of which have since gone under, including Arthur Anderson, Anderson consulting, Anderson Cooper, and pretty much the entire Anderson family.

“Harry has always done an outstanding job. One of the reasons Harry is so successful, is because he really does his homework. I would recommend him for any event, showcase, meeting, or any other situation, with my highest praise.”

Rainey Foster, Vice President: Leading Authorities Speakers Bureau