TOPICS > Economy

The Amazing Adventures of ‘Savings Man’

February 19, 2009 at 6:45 PM EDT
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In the latest of his series of reports on the financial crisis, Paul Solman speaks to the founder of an organization funding creative public service ads on saving money.
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TRANSCRIPT

JIM LEHRER: And finally tonight, some closing thoughts on the economy from a super saver. Economics correspondent Paul Solman has that story.

NARRATOR: And now, another adventure with Savings Man!

PAUL SOLMAN, NewsHour Economics Correspondent: For a decade-plus, this muscle-bound financial adviser has been urging Americans to mend their profligate ways.

WOMAN: Oh dear, I can’t afford that.

CREDIT CARD GUY: Charge it. You can pay it off later.

SAVINGS MAN: Not so fast, Credit Card Guy.

CREDIT CARD GUY: Savings Man!

PAUL SOLMAN: For most of the time, too few of us listened. Dallas Salisbury runs choosetosave.org, the funder of these TV public service announcements. But if lots of folks saw them…

WOMAN: Thanks, Savings Man!

SAVINGS MAN: No, thank you!

PAUL SOLMAN: … why didn’t the supersaver superhero save the day?

DALLAS SALISBURY, Choosetosave.org: For every dime that we’ve spent, others were spending millions telling them that the smart thing to do was to borrow, the smart thing to do was to consume, the smart thing to do with your house was to refinance and put part of that money in the stock market, to take out a home equity line of credit so that you’d be ready to spend more.

TYPICAL MORTGAGE GUY: And with 0 percent down, all you have to pay on this mortgage is the interest.

MAN: Now, that’s affordable.

SAVINGS MAN: Watch out, you two. This is not your typical mortgage guy. He’s really a sub-prime-mate!

Personal savings rate increasing

PAUL SOLMAN: But if the road to ruin was paved with perverse incentives and upgraded with debt, the American consumer has done an abrupt about-face. Personal savings rates were nearly 3 percent in December, up sharply from a negative savings rate just three years ago.

The sudden turnaround has amplified the shock to an economy long based on consumerism and has the government now scrambling to make up the shortfall via stimulus spending.

Indeed, governments the world over are urging consumers not to deleverage, pay down their debts, but to spend more, instead. This public service ad from Finland casts the recession as an invisible pet on the floor, foolishly fed by frightened savers.

But Dallas Salisbury is a voice of dissent. It's about time we saved, he says. If not now, when?

DALLAS SALISBURY: Saving aggressively is probably, at the individual level and at the household level, more clearly important and necessary than at any time in the last several decades.

Saving may undermine economy

PAUL SOLMAN: But do you feel a touch unpatriotic? I mean, the advice you're giving people could undermine the U.S. economy.

DALLAS SALISBURY: I don't think it will undermine it. I personally think that, if we will spend another 5, 10, 15 years deleveraging, we might actually get back to where individual real incomes start to go up again and to where people are able to save and spend money on real things, as opposed to spending so much money sending it to some financial institution in the form of interest payments.

PAUL SOLMAN: I'm guessing here, but I think a lot of people in our audience listening will say, "15 years we have to wait? This guy's got to be crazy."

DALLAS SALISBURY: Individuals want to feel like all this is going to turn around quickly, but you've done programs on Social Security, on Medicare, about what the next 20 and 30 years look like in spending on entitlement programs.

To me, the good news about the current economic situation is it may well be just exactly the shock therapy that we need to get us to focus on some of the changes that are really needed and on, if you will, becoming responsible as individuals and responsible as a nation.

SAVINGS MAN: Savings Man here with a story for you about two young spenders...

Prosperity hard to recapture

PAUL SOLMAN: Whereas, up to now, no matter how Savings Man tried to get his message across, it fell on deaf ears.

SAVINGS MAN: As they grew older, they spent all their pay on fancy cars, houses, two lattes a day. They lived in the moment, never saving a dime. When they tried to retire, they'd run out of time.

PAUL SOLMAN: How many years do you expect before we get back to the level of prosperity we were enjoying?

DALLAS SALISBURY: Personally, as somebody that's about to move into my 60s, I don't personally expect to see it in my lifetime. And since my father lived until 94 and I expect to live beyond 100, that says, "In quite a while."

NARRATOR: In a world where saving for the future is not as popular as spending for the present, only one man can help.

PAUL SOLMAN: Meanwhile, choosetosave.org will keep its cartoon champion on the air.