Bollinger Insurance CEO Jack Windolf had sold 51 percent of Bollinger to a private equity firm last year, which gave him a $500,000 bonus. Instead of take it to his bank, he distributed to his staff. In these days of unscrupulous CEOs, Windolf would probably stand out as a rare gem.
But what really got my attention was what he said while giving the money:
“We encourage them to spend it. We hope they can help jumpstart the economy,” Windolf said. “I like it when they spend on themselves rather than pay bills.”
This is what every politician and President also keeps insisting on in the US. And I keep thinking as to what are we trying to say here?
He effectively said that “Don’t Save . Spend!”. So, what are we trying to do here? Are we building the economy on Consumption sans Production? Isn’t that what this economy has been built on for so many years? Where has an economy built on Consumption-sans-Production brought us to?
And if we believe that the world economy’s only hope is Consumption without savings and Production, then we are simply fooling ourselves. Because economy has always gone for the equilibrium. One side of the equation can only pull out of sync so far.. durable equilibrium is an unmistakable verity!
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