The Wall Street Journal’s Return On Investment is a regular opinion piece where Brett Arends offers financial advice to the WSJ’s readers. In the latest installment of R.O.I., Arends makes a compelling argument for getting rid of your car, or at least downgrading it. Click here to read the story.
The problem is that if everyone takes Arends’ advice, our economy will take a huge hit. Buying new cars not only keeps auto workers and dealers in business, it keeps entire cities alive. When a plant closes down, the workers don’t have money to do any of the thousands of things they do every day. Restaurants close, construction stops, toy stores go out of business. When people stop spending money the entire economy shuts down. It might seem like a safe move to be a turtle and pull your head under your shell, but in reality that kind of behavior will cause a depression.
What’s hardest about this is that Arends’ points are all logical and rational. The artcle had me imagining a scenario where I was taking public transportation and living like a king, no car payment to worry about and tons of extra cash to throw wild parties with. Instead of stressing over gas prices, I’d be doing shots with T.I., as long as there’s a bus stop near his mansion.
I have a similar conversation to this with my mother every few weeks. She firmly believes that doing anything but saving right now is a bad move. Buying a house? Stupid, the value will plummet when the financial apocalypse hits and I’ll lose my job and go into foreclosure. Buying stocks? A terrible idea, the stock market will crash. What’s sad is that if everyone follows this logic, my mom will be able to tell me she told me so.
Like him or not, George W. Bush was absolutely right when he said, after the terrorist attacks in 2001, that we needed to go back to living our lives. We couldn’t panic then and we can’t panic now. We need to make some changes in order to avoid a worse recession than we’re in now, but hoarding all our wealth will only exacerbate the problem.
Arends points out how expensive cars are. Yes, cars are incredibly expensive, but they are also essential not only to our personal way of life, but to our economy.