For 60 years, there has been a downward trend in the personal savings rate. It has reached a crisis, and it's been widely reported that 40 percent of Americans say they would have trouble dealing with a $400 emergency. But this is not something that can be fixed by merely exhorting strapped families to save more.
Among the many underlying causes are the stagnation of working-class wages, current low interest rates on savings accounts and a decline in the number of people who have long-term secure jobs at big companies that offer full benefits plus incentives to be part of a 401(k) retirement plan.
Reversing the decline in savings rates will require both a change in public attitudes and a new burst of innovations that are aimed at the 21st century economy rather than the corporate and industrial one that arose after World War II.
That brings us to Benjamin Franklin, America's patron saint of both financial self-help and of policy innovations. Even today, we can all still learn a financial lesson or two from his timeless advice.
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Franklin's annual editions of "Poor Richard's Almanack," studded with maxims about "a penny saved" and being "early to rise," sold an astonishing 10,000 copies a year. His 1757 compilation of this wisdom, published as "The Way to Wealth," became the most popular book in colonial America. And his autobiography, a beloved memoir, was cast as a how-to manual about rising in the world from humble origins through hard work and thrift.
Franklin's books were intended, he said, to teach about "industry and frugality as the means of procuring wealth and thereby securing virtue." But he knew that, in addition to spreading the penny-saved gospel, America needed clever public and private innovations to promote wealth building and equal opportunity.
So he came up with dozens of financial security schemes that were promoted by the club of tradesmen and shopkeepers he formed in Philadelphia. He proposed a widows and orphans fund that families could contribute to with the knowledge that it would help them if they fell on hard times, and he then expanded that to include other social insurance and savings ideas. He also created a public-private partnership to build a general hospital, using privately raised funds that were matched by the colonial legislature.
"The good men may do separately is small compared with what they may do collectively," he wrote.
Franklin's spirit of innovation was repeated in other eras of our history, including a century ago when we moved from an agricultural to an industrial economy and again during the Depression and after World War II.
The change we need today should, in the spirit of Franklin, not look for one or two government fixes but instead try to unleash dozens of experiments and innovations that use the power of peer-to-peer networks and new technologies. Therefore, along with government policies that provide nudges and tax incentives, we need to find ways to create savings programs that are portable rather than employer-based, bank offerings that provide a kick start and other incentives for individuals to save, and services that cater to contract and gig-economy workers.
— By Walter Isaacson, CNBC contributor, advisory partner, Perella Weinberg; professor of history, Tulane University; distinguished fellow, the Aspen Institute
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.