P. Diddy's Plan for Economic Misery

I'm neither a baller nor a shot caller, but I'm starting to understand what rap mogul Sean "P. Diddy" Combs meant when he said, "It's all about the Benjamins."

Combs, you see, is irked by the soaring fuel bills for his private jet, and he's taken his frustration to the Internet in protest. In a YouTube video posted last week, the rapper bemoaned high oil prices as the culprit for what is surely a bellwether signal the economy is in shambles: being forced to accept the torture and humiliation of first-class commercial air travel.

"[R]ight now, can you believe it, I am actually flying commercial," he explained. "That's how high gas prices are, OK? So I feel you." Then came the solution, as Combs pleaded, "I want to give a shout out to all my Saudi Arabian brothers and sisters and all my brothers and sisters from all the countries that have oil, if you could all please send me some oil for my jet, I would truly appreciate it."

Thanks, Diddy. We'll let them know.

Maybe he didn't get the memo
Combs reminded us exactly why the economy isn't bubbling with prosperity: We're hell-bent on consuming beyond our means, and we'll do whatever it takes to keep that lifestyle up. Of course, private jets are outside the realm of comprehension for the average Jane and Joe, but swap out a rap tycoon who can't fly his jet for a salaried worker who can't afford to drive his SUV 100 miles to and from his sprawling house, and the issue is probably more prevalent than it looks.

No matter, armies of consumers, including P. Diddy, will hear of no alternative. The key to our economic strife is to continue whatever we've done over the last several years, the thought goes. Perhaps with a combination of hope and a dash of good fortune, importing gaggles of goods we can't afford will break the economic torment caused by, well, gaggles of goods we can't afford. Crazier theories have been taken seriously.

Come to think of it, yep, that is the problem
Take it as a term of endearment if you wish, but we're a nation of P. Diddys, unable to distinguish between the causes and consequences of our economic woes. He grumbles of not being able to afford something beyond his means and proposes a solution of begging for more foreign love without realizing it's been those actions that are partly to blame for our economic troubles of the last year.

Let's start with the first issue: the pursuit of things you can't afford. Housing provides a good example. Years of record-low interest rates made the question of whether you could actually afford a house a taboo subject. If you wanted to buy it, just push your frontal lobe out of the way and buy the darn thing. Someone would be able to finance your ambitions, even if its future prospects were downright silly. China provided the capital, Bank of America (NYSE: BAC  ) and Wells Fargo (NYSE: WFC  ) provided the mortgage, Beazer Homes (NYSE: BZH  ) and Pulte Homes (NYSE: PHM  ) built the McMansion, and Best Buy (NYSE: BBY  ) , Pier 1 Imports (NYSE: PIR  ) , and Home Depot (NYSE: HD  ) were there to garnish the pad. The American dream at its finest! Alas, soon your neighbor's house is bigger than yours, your cousin's TV is sharper than yours, and your sister's walk-in closet is more walkable than yours. Before you know it, a modern-day arms race on home superiority ensues until the last sucker realizes the joke's on him.

Now on to the second issue: Relying on the kindness of foreigners to foot the tab of our overindulgence. Nations -- like people -- accumulate wealth on the ability of two things: saving money and investing it wisely. Both parts seem to be elusive for America. Savings rates have hovered at or around zero for years. Savings' distant cousin -- borrowing -- has taken the reins, but the funds from that spigot seem to end up as either fumes out of our tailpipes, whoopee cushions, or distant memories on foreclosed homes. The end result: The more we rely on borrowed money for things we can't afford, the weaker the dollar gets. In 2000, the dollar was strong, and oil was cheap. Today, the dollar is weak, and oil is expensive. That isn't a coincidence, nor is it something that will right itself without significant changes.

All of this comes back to Diddy's plea for more imports: Importing more goods for things you admittedly can't afford won't solve your problems ... those are the causes of your problems.

For related Foolishness:

Fool contributor Morgan Housel doesn't own shares any of the companies mentioned in this article. Bank of America is a Motley Fool Income Investor pick. Home Depot and Best Buy are Motley Fool Inside Value selections. Best Buy is a Motley Fool Stock Advisor pick. The Fool owns shares of Best Buy and has a disclosure policy.


Read/Post Comments (7) | Recommend This Article (48)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 06, 2008, at 12:42 PM, SwampBull wrote:

    Thank you for indirectly pointing out the stark contrast between a recession today and the Great Depression of 80 years ago. There was a time when a recession meant that the consumer could not afford what they need. Now a recession is defined as a consumer being unable to squander money on toys they cannot afford.

    If our society is to learn anything from today's economic struggles, I hope that it is this: spend within your means. If you cannot save or invest ten percent of your annual salary, your problems do not lie in the fluctuations of the economy. The only person that spends your money is you - and in the end that is the only person who can change wasteful habits.

  • Report this Comment On September 08, 2008, at 1:23 AM, sb101cu wrote:

    I agree with this. Go and watch the movie/documentary IOUSA. Also if you get a chance read the blog/comment of Robert Kowaski at yahoo finance and figure out the USA economy 30 years from now. The banking crisis is a grain in the sand (financially) for the things to come.

  • Report this Comment On September 09, 2008, at 8:38 AM, TheeJoshMan wrote:

    LOL, P Diddy has a couple hundred million in the bank so its bascially a moot point!

    Jiff

    www.anonweb.net.tc

  • Report this Comment On September 09, 2008, at 2:33 PM, nestegg4324 wrote:

    This was my comment on the article…sorry got a lot of time on my hands.

    I think were missing the point this article was written so that we understand that we are pretty much the cause of our own demise. Americans as individuals borrow to buy everything... Houses, TV’s, Boats, RV's, Cars, etc. Heck some of us even borrow to put gas in our cars. In my opinion 99% of Americans live above there means, they make 36,000 dollars a year and drive a BMW that takes up 1/2 there monthly salary and they pretend that they can afford 300 dollar pairs of sunglasses 180 dollar jeans 400 dollar bar tabs and lavish vacations to Vegas they cant afford. What ever happened to people saving for the things they want in life? Instead of waiting 3 months to save up for a flat screen TV that cost a thousand dollars, they buy the TV they saw in Best Buy or somewhere they saw last week and then pretty soon there credit is so shot they can even afford to pay it back and then it hits em... I should probably be saving for these expensive items instead of paying 24% interest for a department store credit card. its up surd. But yet these are the same people who were dumb enough to borrow even more money to buy a 500,000 dollar home with a sub prime or adjustable mortgage loan the same day they saw the house just because there loan was approved and made no plans to save money for a rainy day. Like the day they decide to foreclose on their home because they were to ignorant to understand that there mortgage payment will change from 1,200 a month to 4,600 dollars a month in 1-5 years. This is the disaster that we are now dealing with in America and lets not talk about the Banks who were greedy enough to lend to these people. Did they honestly think that they were helping the market? Did they forget to think about what will actually happen to these homes when their owners can no longer afford to pay for them? or did they know and just not care because they made enough money to last thru the storm?

    Oh and as for America as whole, we cannot get enough of borrowing from other countries and allowing them to price gouge the heck out of us. Not only that but have ever thought about why we don’t tap into our own oil resources? I'm not saying that we should completely use all of our natural resources. but this would be a good time to make gas affordable given our current economic situation. And it would also allow us to stand firm in the fact that we don’t have to have all of our gas from Saudi or where ever in the world we get it.

    Lastly why does America waste so much money? Where does it all go? Not to fix streets or build new schools, from what I could see. Oh, maybe to our war that cost billions of dollars a month. That’s a whole different conversation

  • Report this Comment On September 09, 2008, at 3:24 PM, hogjiles wrote:

    I'd be willing to bet that P.Diddy doesn't

    have SQUAT in the bank.

    Read The Millionaire Next Door

    SS

  • Report this Comment On September 10, 2008, at 12:28 AM, vladdfool wrote:

    Obviously, the ironic nature of his comment was lost on some readers. I would aspire to be as good a business man as he. His estimated net worth: $346 million. Richest man in hip-hop, and he started with less than most.

    http://www.eurweb.com/story/eur27931.cfm

  • Report this Comment On September 10, 2008, at 11:45 AM, fibreoptik wrote:

    Typical DB comment from a typical DB rap "artist".

    Even if he was saying that "tongue-in-cheek" he is still an a$$hole for saying it.

    And yes, people need to WAKE THE F... UP and realize that it is not appropriate environmentally OR economically to be driving an SUV for your daily commute or trip to the corner store...

    It's digusting that people should think they have a divine right to run a guzzling SUV or muscle car or powerboat... or attend craptacular/retarded "sporting" events such as Nascar/F1. What a stupid, senseless waste of resources!

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