The Tacano Money Manager: Ralph Kramden and the American Savings Crisis

07/09/2012 02:25 pm ET | Updated Sep 08, 2012

In the 1955-56 television series The Honeymooners, Ralph Kramden is an everyman. He is a low-paid bus driver. He lives with his long-suffering wife in a drab two-room apartment in a Brooklyn working-class neighborhood.

Kramden tries desperately to get ahead through what was once considered an American tradition: He saves. Throughout the series he often refers to his $75 bank account.

In the tax return episode, a terrified Kramden is told that his tax return is under review. He fears that he has run afoul of the IRS, those pesky publicans who have ruined many lives (see: Abbott and Costello, Joe Louis, etc.).

Kramden spends a harried night looking for what he missed. Finally, with the help of neighbor Ed Norton, he realizes the problem. He forgot to report some $2 in savings interest.

"You have to report interest on your savings account?" Kramden asks in amazement.

"Certainly," responds Norton, who understands the ways of our avaricious American leviathan. "It's income, isn't it?"

So our government -- desperate for money yesterday, today and tomorrow, given the wars and entitlement promises made by governments both right and left -- wants that $2 as well as all the other small change of millions of Ralph Kramdens. It is often run by pols who don't think much of our ancestors' values.

They were people like my grandparents who came here as economic and political exiles. They wanted to save and build a better life. But that world is now virtually gone. The let's spend now attitude has become a dominant philosophy of our culture as well as that of the Tweeds who rule over us and distribute new dollars as though they were playing Monopoly.

And this principle of discouraging thrift actually has become worse than the Honeymooners days.

Amazed that Americans heavily taxed savings and investments, calling them, a la Karl Marx, "unearned income," a Japanese official told U.S. Commerce Secretary Pete Peterson in the 1970s that he didn't understand.

"Mr. Secretary, please explain putting the highest taxes on what you call unearned income. We have always assumed that income from savings was the most earned of all. It is hard work to save, don't you think?" Peterson quotes the Japanese official in his book Facing Up.

Yet the Ralph Kramdens of this world are told by the Potomac Poloniuses:

"We want every cent you got. And what counts in our economy isn't production, savings and the spirit of self-improvement. What counts is consumption. So go to the mall in your car, the one bought with 100 percent borrowed money, and run up a big credit card bill."

This let's-live-for-today approach has become a macro and micro economic problem. It's macro because it hurts our economy. Our hired help must borrow more and more to fund runway spending. That's fueled in part by the "give me everything right now" demands of some voters.

It's micro because tens of millions of Americans face retirement without adequate savings. Demos, a think tank here in the Rancid Apple, says the average 401(k) balance of those ages 55 and 64 is only $98,000. That means many head for ghastly golden years. That is unless something so old that it now seems new is rediscovered -- the value of saving.

Indeed, how does anyone ever create a better life but through savings? That is denying oneself some of the better things today in expectation of rewards later on. That also means sensible macro policies that don't spend the assets of unborn generations and that don't punish thrift.

A society progresses by creating a bigger capital stock -- savings. That lowers capital costs. The latter means interest rates. The Fed has been artificially keeping rates low in the so far failed hope of reviving the economy, a policy reminiscent of the disasters of the Fed under Arthur Burns in the 1970s.

To avert a crisis in our lives and in our economy, many need a new view of money management and savings.

This column will advocate for sane approaches to money. It will discuss tacano money management.

Tacano in Spanish means "stingy." If you aren't sometimes stingy, if you don't take certain steps to ensure that through your working life you accumulate sufficient dinero, you're likely headed for more horrific hours on crowded e-trains or stuck on highways headed to the salt mines.

The goal of tacano money management is a citizen who doesn't perpetually wait for some savior government program. That is about as realistic a prospect as finding the weapons of mass destruction or expecting a booming economy today, which was promised by pols in 2008.

Tacano is someone who doesn't buy lottery tickets as a form of retirement planning, hoping to beat impossible odds. Let's improve the odds. More on tacano money management anon.