One of Prez Obama's first acts was to freeze the salaries of his top people (were they expecting raises on the first day?) Corporations and other large groups are announcing the same. In deflationary times, prices of everything drops. In this environment, a salary freeze locks in high wages while prices of what you buy and the income of everyone else drops. In this upside down economy a salary freeze is a raise.
As I said here, if lobster fisherman are getting less money for their crustaceanous harvest, what does it matter when food, clothes, housing, gas, vacations, anything and everything the fisherman would buy is cheaper too? Lower prices only matter if you saddled yourself with debt you cannot service with the lower income.
If you find yourself with debt you cannot service, let me tell you the reason why. Usually we humans judge each other by wealth, real or imagined. Most people fall into the trap wherein you can get esteem and reputation, on credit. This is where "they" got you. "The home you deserve..." The vacation you deserve..." "You need HDTV..." What is logowear except expensive advertising of one's putative position? Macy's, soon to go under, is advertising its credit card as "you can have it all..." In the last month 2 billionaires and several millionaires have committed suicide over money losses. The heart of that is somehow who they are got tied up with what they have. That's a mistake.
If you find yourself caught in the trap, then of course job number one is to admit it is your own fault, and certainly do not try to get others to bail you out. Your job now, what falls to you, is to show those around you what happens when a person is wrong about money and finances. And do it again, right. If you are busted, you've got a job to do.
Friday, January 23, 2009
Listen For It: Freeze Salaries
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