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How Plasma Televisions Will Lead To The End Of The World

About fifteen years ago while doing some advertising work for Philips Electronics, I went to the Consumer Electronics Show to meet with company officials and see some of their newest developments.  I was ushered into a secret room and shown the “entertainment system of the future”.  At it’s heart was a 42 inch plasma screen television.  Though they are commonplace now, at the time this was one of the most futuristic things I had ever seen.  A huge, thin television that blended into the wall.  The Philips people assured me that in the near future every home would have one, which at the time seemed decades away, since the initial price was $15,000.  I had no idea that this technology would play a key role in the current economic crisis.

Well, as we all know now the flat screen is now the standard for new televisions, and many homes do have them.  While the price has fallen drastically from $15,000, they are still pricey (hovering a little over a thousand to several thousand).  They are still gorgeous to look at, and it is no wonder that consumers are captivated by them and need to own one or two.   I own several. Fifteen years ago the average “home theatre” consisted of a 19 inch TV that could be purchased for $199.  Now many homes have huge plasma screens and sound systems that cost thousands or tens of thousands of dollars.

And how did America pay for these home wonderful techologies?  Many families tapped into their home equity and essentially took out long term loans they could not afford to purchase luxury items that would last a few years.

The causes of our current economic meltdown are and will be widely discussed.  Certainly there is a lot of blame to go around.  Deregulation, greed, idiot politicians, excessive Wall Street compensation, silly and complicated financial instruments…… they all play a big part in the problem. But despite all the factors that created this perfect storm in the financial market, the real essence of the issue is that people bought a lot of stuff they could not afford.  The average American went on a buying binge.  They bought houses that cost two or three times what their salary could support.  They filled them with expensive “stuff” – including plasma televisions.  They lost control of their spending, and assumed that rising valuations would somehow bail them out at the end of the day.

And now it has all come crashing down.

My parents, both depression-era self-made people, were very conservative financially.  They resisted all debt.  That meant no credit card debt, no installment loans….. the only debt they had was their house loan, and it was a fixed-rate fifteen year loan that they paid off early.  The idea of buying a house you could not afford, “stuff” to fill your house, and then using your home to leverage that debt would seem incredible to them.  Their mantra was “only buy it if you can afford it”. They were disciplined. They bought used cars until they could pay cash for a new car.  They understood – as the country in learning now –  that debt is your enemy and a form of slavery.  If they needed extra money for something, they found a way to make some extra money.  They didn’t go out and borrow.

And when my Dad finally did buy a plasma television a few months before he passed away, he paid cash – and still complained about how much it cost until the day he died.

So America is suffering now because of our lack of fiscal control.  Like teenagers with a credit card, we went crazy, spent more than we could afford, and we have to figure a way out of the mess.  And this will result in a profound change in the way most people live. 

And here’s the ironic sidenote to the plasma television.  It was reported last week that the process of manufacturing them creates excessive amounts of methane gas that is leading to more global warming.

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