Opinion

Our Opinion: Financial follies troublesome, but could be worse

Unless you’ve been living under a rock for the past few months, you can tell that the economy, both domestic and abroad, has been shaky at best. The prices of fuel and food have risen. Houses across the country are being foreclosed on after those silly sub-prime loans. Now, investment banks whose names were good as gold just years ago are mere memories. Lehman Brothers and Merrill Lynch, bankrupt and bought out in just one week, respectively.

Sounds pretty bleak, right? Well, it depends on your perspective. If you’re an investment banker, or someone heavily involved in the stock market, then absolutely, you’re crawled up in a fetal position right now. But for most college students, the only investment they’re making is for the keg this weekend.

Sure, food and fuel prices are up, but those prices fluctuate through the years. Ask your parents about gas lines in the 1970s, and think about who actually had it worse.

So what is the problem? The problem is the mix of the three is really souring how people feel. There are even people who are contemplating withdrawing their money from banks until the crisis dies down. The irony is, that’s the worst thing to do. Burying your money in the backyard takes it out of the economy, and gives you negative interest (also known as inflation).

So what should you do? In short, don’t panic. The era of the never-ending expansion has gone away, and in its place must be a renewed commitment to careful judgement. Cut back on spending a little bit to adjust to current price levels. Write your congressman to encourage better monitoring of the markets in the future. As the old saying goes, “an ounce of prevention is worth a pound of cure.”

September 22, 2008

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The Miami Hurricane is the student newspaper of the University of Miami in Coral Gables, Florida. The newspaper is edited and produced by undergraduate students at UM and is published in print every Tuesday.