Buyers: Don’t be a Skinflint!
The Lesson from Flint Michigan is: Be Cautious of Short Term Savings
The Presidential declaration of emergency in Flint Michigan offers lessons to buyers and sellers about the danger of short term savings that cost dear in long term.
An Old Term Gets New Meaning
Today however it could as easily refer to Flint, the Michigan city which has just had a state of emergency imposed due to the miserly actions of its management(1). As a cost saving measure the city’s water source was switched to the Flint River with poisonous consequences. It was a decision made by the emergency management appointed to run the city as it teetered on the verge of bankruptcy in 2014. This decision has ended up costing the city and its residents dear. It could even cost the State Governor his job(3).
False Savings and Terrible Consequences
The cost of fixing the city’s water infrastructure is estimated at more than a billion dollars. Less easy to calculate is the cost in terms of long-term health effects to Flint residents who have been drinking the lead-tainted water (2). Clearly there are times when saving money can be very expensive indeed.
What is the morale of the story?
Not to take away from the seriousness of the situation, you could say that the lesson is don’t be a skinflint. More specifically:
- Don’t let your buying decision is not swayed by short term savings that will end up being costly in the long run.
- Promised savings are often illusory and risk puts savings in the shade.
These are important for both buyers and sellers to remember. Moreover, it is a reminder to municipal managers, as well as politicians, of the tremendous responsibility that they bear as the struggle to balance economic considerations with the welfare of their citizens.
Links & Sources:
(1) ‘Obama Declares State Of Emergency Over Flint’s Contaminated Water’, by CAMILA DOMONOSKE January 16. Link: http://www.npr.org/sections/thetwo-way/2016/01/16/463319454/obama-declares-state-of-emergency-over-flints-contaminated-water
(2) High Lead Levels In Michigan Kids After City Switches Water Source by SARAH HULETT, Oct 5th 2015. Link: http://www.npr.org/2015/09/29/444497051/high-lead-levels-in-michigan-kids-after-city-switches-water-source
(3) Michigan Gov. Rick Snyder Faces Calls For Resignation Amid Flint Water Crisis, NPR.org, January 1 2016. Link: http://www.npr.org/2016/01/13/462950340/michigan-gov-rick-snyder-faces-calls-for-resignation-amid-flint-water-crisis
Image contains water-tower by Sean Fermoyle from the Noun Project.