Too Many Economists Can Make You Nuts

How is economic news like the psychic hotline? First, both of them try to predict the future (with intermittent success). Second, both of them are really trying to get you to spend money. And third, both psychics and economists don't know you.

My great-grandparents did not go broke in the Depression. They were living in New York at the time and they remembered stories about people who jumped out of the skyscrapers on Wall Street after having lost everything in the crash. My people didn't go broke in 1929. They went broke about a decade earlier.

While economic news has value, the problem is that you cannot take broad economic news and apply it specifically to you and your situation. As economists are making us nuts and arguing about whether this is or is not a recession ... who cares? I guarantee that some people are going to make money in this so-called recession. Others will lose money. Others will stay the same.

Sometimes we become part of the economic story. Some of us are facing layoffs, unemployment, upside-down mortgages, and even foreclosures and bankruptcies. That's bad. But to paraphrase Tolstoy (apologies in advance), every person who goes broke goes broke in his or her own way.

I hate hearing economic doom and gloom messages because it discourages some people from cleaning up their own financial house and it gives other folks the idea that financial problems may not be their own fault. I'm not saying that all financial problems are your own fault -- but the more responsibility we can take for our financial situation, the more control we have over our money.

Are we in a recession? I don't know. I don't care. I'm still concerned about reducing my spending and increasing my income. Don't let the prognosticators get your eyes off your goals!