Join Jim Cramer, Doug Kass, Helene Meisler and other RealMoney pros at TheStreet.com Investment Conference on "Best Ideas to Make Real Money." Save the date: Saturday, May 2! More details here.This blog post originally appeared on RealMoney Silver on March 5 at 8:17 a.m. EST. An important role in public policy is to manage a downturn. But what about the private sector? Does it have, or should it have, a more important role or obligation? In his magnum opus, The General Theory of Employment, Interest and Money, John Maynard Keynes wrote about the " Paradox of Thrift," also called the "Paradox of Savings." Keynes' "Paradox of Thrift" suggests that while saving may be a private virtue, it is a public vice. According to Keynes, when an individual saves, it is a healthy phenomenon, but a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less, resulting in a catastrophic negative feedback loop and a downward spiral in economic activity.
- Isn't it time for the private sector to adopt a shared responsibility and to think more creatively about the present and future?
- Isn't it time for some large publicly held corporations, with strong balance sheets and good reputations as corporate citizens, to draw a line in the sand?
- Isn't it time for one of these corporations to start a precedent by telling its employees that, despite the weak economic backdrop and continuing economic uncertainty, there will be no more firings and that these corporations are prepared to take a hit for the benefit of the broader society?
Know What You Own: Berkshire Hathaway holds large stakes in stocks such as Wesco Financial (WSC), Burlington Northern Santa Fe (BNI), Moody's (MCO), Washington Post (WPO) and USG Corporation (USG). For more on the value of knowing what you own, visit TheStreet.com's Investing A-to-Z section.
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