Friday, April 10, 2009

False economies

Paper plates are an office supply at my office, provided by the employer. (I know that's the sort of thing a lot of employers no longer provide, but we still do.) Until recently, we got the plate-sized and the saucer-sized paper plates, but it seems that they've stopped buying the smaller ones, in an attempt to economize. I imagine that at some discussion someone decided we could save some money by dropping one or the other, but when they tried to figure out which to drop, they naturally dropped the smaller ones since a large one can sit in for a small one, but not vice versa. The net result, of course, is that any time I would have used a smaller one (quite often) I now have to use the more expensive larger one, so the larger ones get used up twice as fast as they used to, so we're actually wasting more money and more paper. But whoever made this decision can still point to it as a cost-cutting measure because on paper, it looks like an elimination, politically.

This whole incident is kind of a microcosm of the much larger kinds of false economies that pervade our bureaucratic fiscal system, statewide, nationwide, even worldwide. The real issues are of course a lot more complex and less obvious, with a lot more layers, which is why I used so simple and obvious case as my example. But so many times there are decisions which are made because they make an impressive-seeming sound bite to present to the press, the legislature, the commissioner, the CEO, the stockholders, etc. but which actually end up costing money and creating waste. The fact is, any simple "executive summary of the executive summary" version of the situation is dangerously inaccurate, and decisions made to optimize those ultra-brief summaries are pervasive and hugely damaging.

If I were just a little bit more of a pretentious, armchair-quarterbacking windbag than I am, I might go so far as to suggest that this is one of the cornerstones of what's wrong with the world economy that's caused the current "downturn", with so much of it built on what amounts to fast-talking investors. It's very tempting: I can make an oh-so-clever bit of wordplay comparing the "false economy" of spending more money on paper plates out of a misguided attempt to spend less money on paper plates, with the "false economy" that has recently collapsed worldwide stock markets and caused massive layoffs. But I really don't know enough economics to usefully gauge how important this particular aspect is in the larger scheme of what's wrong with international finances. And to try to do so would be dangerously close to the very oversimplification, and its dangerously deceptive consequences, I'm criticizing. So I won't. Anyway, I still get full credit for the wordplay just having mentioned it in explaining why I'm not using it! So there.

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