Don't Forget to Run Those Cost Saving Brainstorms through the Wringer

Philadelphia's new mayor recently announced that he wanted to hedge the city's looming deficit by charging for trash collection by the bag. The strategy was to involve specially designed and marked bags that would have to be purchased by residents and placed out next to their re-cycling containers which would remain free (at least by volume). As a resident of Philly, my green nature found this basically appealing, but my rebellious side went into overdrive. Imagine the amount of trash that would sneak into the recycling bins, not to mention that there would commence a huge economic externality, forcing businesses to somehow lock down their privately hauled dumpsters. After a few days of the news cycle, the city decided to, well, trash the whole idea.

This sort of half baked thinking is also reminiscent of Jason's recent post about how a major corporation thought it would be smart to have the CFO personally sign off on all services agreements above a specified threshold. Now that was just brilliant. Perhaps Spend Matters should run a competition for the most absurd cost saving idea in the downturn. The most ironic thing about these ubiquitous flights of anti-genius is that with all the solutions that exist to protect us, save real money and reduce supplier risk, none of them can protect us from some of our own panic-induced irrational strategies to cut costs.

- William Busch, Spend Matters Columnist

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