Count the right things, not just the numbers

Chris Patten, last Governor of Hong Kong, talks about flat incomes in America and our cultural propensity to spend and run up big deficits. The answer to the question "can Obama induce a savings spree" is a definite NO. We would see an uptick if he made *all* savings tax free until used, not just certain retirement savings, but since that's totally unlikely, we're back to the definite no.

Many Americans are now reducing their debt and building up their cash savings in response to the pain of our contracting economy and the credit crisis. We don't need a President to "induce" this behavior. As usual, big-government types love to bellyache about "flat incomes" over the last 20 years. The problem with this observation, which is correct on the surface, is that it ignores and obscures the fact that our lives have improved dramatically with the technology and innovation that comes with American capitalism and globalization.

While the raw numbers of "income" may look flat, the quality of our lives has skyrocketed. The tech boom ushered in the era of FREE products and services, monetized in an entirely new way (or not at all, such as Twitter as of yet), shattering the per piece price paradigm. Stop and take a look around:

• Staying connected is easier, cheaper, and more fun because of services such as Skype, Facebook, Google Video Chat, and others, not to mention the ease of text messages to accomplish things that used to require a full phone call.
  
• Shake your phone to find the restaurant nearby that perfectly suits your craving.
  
• Download any music, no matter how obscure, and play it wherever you go.
• Effortlessly find a destination with portable GPS systems instead of fussing with paper maps, directions, and landmarks.
• Have a case of wine delivered to your door at rock bottom prices, from a selection bigger than any possible store, instead of spending time to get it, paying for transportation, and hauling it yourself
• Find almost any book and have it within days for a low price
  
• Access a near-comprehensive DVD library for a few dollars a month instead of building one for thousands of dollars yourself - soon to be access online, on-demand, anytime instead of dealing in physical disks.

The list could go on and on - actually - let it go on. Add a comment if you think of another luxury we take for granted.

It's hard to quantify how these new products and services improve our lives, but they most certainly do. Sure they add new expenses - 99 cents per song, your Netflix subscription cost, etc - but they add massive new luxuries that we have never quantified before.

ChaChing is all about living well - not just scrimping to save but spending smarter. As 2008 comes to a close, turn off all the dour "experts" and reflect on how rich we really live, and how the relentless churn of innovation and entreprenuership that is every minute focused on solving our problems and making our lives better (the very definition of capitalism) will continue and is still in effect now, even in a time of uncertainty.

Happy holidays from ChaChing.