Marketing Genius II - Transparency and Clarity?

Marketing Genius II – Transparency and Clarity?
By: R.J. Fee
February 27, 2009

Here are two examples of President Obama’s marketing genius and how to cut through the sales pitch to reach the substance for those unwilling to delve further.

The President says his American Recovery and Reinvestment Act will “save or create 3.5 million jobs”.

This is pure marketing genius. It is impossible to prove (or disprove) a negative. Allow me to demonstrate. If each person in the United States would only send me $100, I will go out into the street and perform an ancient Aztec ceremony that will avert an intergalactic calamity that an ancient scroll forecasts to occur this year. If I was to receive a trillion dollars and no intergalactic event occurred, I could proclaim that I saved mankind. Now since the event did not occur, no one could either prove nor disprove that my actions averted the end of mankind. In this way, President Obama has positioned himself to declare his plan a success without “creating” a single job. In a later blog we will get into the fact that government can not actually “create” jobs unless they are taking money and jobs from the private sector where the jobs already exist.

The President says his plan to save people from foreclosure will focus on “those who have played by the rules”.

This is intended to make you feel good about paying for someone else’s mortgage. My question is: Whose rules are they playing by? The common sense rules for personal finance say:
1) Save until you have at least 3 – 6 months worth of expenses in a cash account for UNEXPECTED EVENTS.
2) Don’t carry debt with the exception of your home mortgage, student loan or a SMALL PORTION of a vehicle purchase
3) If you don’t have substantial equity in a purchase of a home or car, YOU CAN’T AFFORD THAT PURCHASE.
4) Don’t carry credit card debt. Know the difference between needs and wants. If you want more, then work more.

By the way, if you have played by the rules, then you are out of luck under the President’s plan. Those whose have not played by the above rules will be eligible for subsidized refinancing at rates that your tax dollars will allow to be artificially lower than rates in the free market. Although you are paying for it, you will not be eligible to lower your rate.

Some will say that it is necessary to bail these people out, because if we do not then the entire economy will suffer. I say rewarding those who have made poor decisions with additional resources will only lead to even worse decisions in the future that will cause even greater problems. This is true whether we are talking about individuals, companies or our own government. Chrysler is a perfect example of this. They were the first car company to need a bailout. After government loans floated them for approximately 25 years, they are back with the same problem. Only this time they brought their cousins, GM and Ford. The bailout didn’t change Chrysler’s behavior the first time. Why should we believe it will work this time? It won’t. It will only delay the crisis for another generation.