Tuesday, December 2, 2008

"The Economy"

I am finally breaking down and talking about it. I have held out this long, believe it or not, without a single post about IT. But last night, I heard on NPR's Marketplace an interesting interview with Dan Ariely from Duke University (thanks Kai Ryssdal) about responses to the retirement savings plunge. My summary attempt is as follows:

Consumers may figure, with inability to earn money via stocks and bank earnings "not very helpful," they might as well spend vs. save . . and perhaps not be as concerned with cutting back on spending. In the larger picture, this is the best thing for the general economy and so we should all feel good about making spending decisions.

Before I go on, it should be noted that the only Econ class I took was in high school where I learned 2 things: (1) There's no such thing as a free lunch and (2) I could not maintain anywhere near the lifestyle I was used to on my assigned $27,900/year salary (in 1989) for our budget project.

Lack of formal economics education aside and from a marketing perspective, I think it's a hard sell. I think for many of us, spending that would match our savings is a far cry and would be too painful. However, with a catchy tune and a hot new vocalist behind it, we might be able to convince others to spend for their country, if not for themselves, this holiday season.

What are your thoughts? Are you ready to open your wallet for shopping and forego the 401(k) or any savings method altogether?

(P.S. Dan, I want to re-do your MIT website. It's cool but is it really helping your brand? I do love your Predictably/Irrational site, however, and enjoy your perspective. I plan to apply the results of your pricing research in client education methods; thanks for sharing it.)

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