Well-intentioned money advice

Suze Orman, "internationally acclaimed personal finance expert" (actually the title of her web page!),, said yesterday on myphl17 News At Ten something like: "you are not to spend your economic stimulus check. you must save it." (Don't ask me why I ever watch this newscast. It consists of recycled press releases, news that someone got shot and somebody's house burned down, and sports scores. The only score I care about is the Phillies and I usually know how that turned out anyway.)

Anyway, Orman's advice seemed to be based on the idea that because the economy as an aggregate is doing poorly, we all must be suffering. There are surely some people who have had a very good year and don't need the six hundred bucks. And there are surely some people who have had a very bad year and for whom six hundred bucks is just a drop in the bucket.

I'll call this the "distributional fallacy" (does it have another name) -- assuming that any individual must be representative of some sample from which they're drawn. Not a horrible assumption in the absence of other information -- but I know more about my financial situation than someone appearing on my television!

But "if times have been bad and you don't have money saved up, you should save the money -- and maybe you should save it even if things have been good for you, because they might turn bad" doesn't have the same ring to it.

I'm not arguing that people shouldn't save their money, because life has a way of causing people trouble. But to assume that everybody is going through hard times is kind of short-sighted. Then again, if you tell people "some people should save their money", that American instinct to consume will kick in and people will assume that "some people" doesn't include them.

(For the record, I will be saving my economic stimulus check. I think. It's hard to say, because money's fungible, and I stand to have negative cash flow this summer because I won't be teaching like I have the last two summers. So it'll go into savings, but then I'll spend "it" later. Money is money, it all mixes together. It's a scalar, not some sort of crazy vector in a non-Euclidean space as some people would probably like you to think.)