There's not much good economic news these days. But there is the occasional upside to the down economy.
Americans who previously just whipped out a credit card or got quick approval for a loan to buy what they wanted are now developing the discipline of pinching pennies and saving for what they need. Some are even enjoying the challenge. This may not be good news to retailers, but paying as you go is a skill that served earlier generations well during difficult times.
The downturn also is exposing criminals who have taken advantage of people susceptible to promises of high returns on their investments. Last week, a New York Times story reported on the "Mini-Madoffs" whose Ponzi schemes are surfacing as the economy worsens and investors, finally skeptical about the high yields shown on their investment statements, are trying to cash in, only to find their money gone.
An official with the Commodity Futures Trading Commission said the number of leads about possible Ponzi schemes reported to his agency has doubled in the last year. These perpetrators aren't in the same league as Wall Street's Bernard Madoff, who is reported to have lost as much as $50 billion of his clients' money. But their multi-million dollar schemes have destroyed lives nonetheless. In some cases, the schemes had operated for years, the frauds camouflaged by the roaring economy and inadequate federal regulation.
The lesson learned: It pays to be careful about your money, both how it is spent and how it is invested, in good times and in bad.