Last year, my morning paper would put out the occasional feature piece about how I'm a horrible person because I've yet to crank out my allotment of 2.4 babies. The media analysis is usually that I'm laser-focused on my career, I don't believe in biological clocks, and that I'm quite possibly a selfish whore.
"Divorced, no money, and living in a studio apartment," is the actual reason, but, hey, "selfish whore" works, too. Whatever.
With The Greatest Economic Disaster Ever, Ever, EVER going on, the media has taken a new tack. They are no longer chastising me for my dusty unfeminine womb. Instead, I'm being clucked at for a new form of unfeminine hagitude: I don't shop enough.
I caught this blaring Express headline on my way to the Metro yesterday:
"U.S. Thrift Hurts the Economy"
Well, golly. I'm no economic expert. My knowledge is limited to a daily digestion of the Business section, and that D- I got in Econ 10 my junior year of college. But I do know that we got into this mess, at least partially, because America's savings rate has been near zero for heaven knows how long, we all bought on credit like we were on a neverending shore leave, and we're stupid moronic idiots. So when the job losses rolled in, and mortgages ballooned, we had no cash reserves and immediately began to squawk for help.
We lost 55,000 jobs in one day last week. Health costs are leaping all over the place, 401(k)s are worth about as much as Zimbabwean paper money, and we have real concerns about the sustainability of the economy. But nearly every day, the Post writes a pity piece and chastises us to go help the poor sad helpless retailers. (Who, incidentally, are major Post advertisers...coincidence?)
Gack. Spare me. Thrift is a virtue. Savings are good. We're supposed to sock away money for a rainy day/retirement/a down payment. We cannot live forever as a society of people who go out and buy stuff they don't need, and can't afford, with no plan for the future. Yes, hoarding is bad, and money needs to circulate, but do we really want to encourage people to go buy a bunch of useless crap when a sacking might be around the corner? Doesn't that cost us more in the long run?
Oh, wait, what long run? Who needs to think ahead, anyhow? There's a bailout at the end of the every tunnel!
In the meantime, I will be saving my pennies. In fact, I will pour them into a kiddie pool and swim around, like a low-rent Scrooge McDuck.
PS - if you have differing opinions, and/or actually understand economics, please do weigh in. I love a good dialogue. Just don't be a dink - I've freely admitted that maybe I don't know everything, and appreciate when others do the same.
21 comments:
Does being responsible for a neighborhood bar being able to open on Mondays count as helping the economy?
Jamie - Depends. Did you buy me a round?
It's certainly possible... I've done many things at bars I later forgot.
My first instinct is, well, yes, savings are good.
The problem is american consumers have decided to turn into tightfisted japenese-esque savers at the absolute worst moment: when banks won't loan money to anybody.
Which brings us to deflation, which is the absolute boogey man of economics. People hear the economy is bad, People spend less (either out of fear or because they were laid off), causing stores to discount, which people then clue into and wait to purchase betting on lower prices, which further lowers sales, dropping prices more, etc. That ripples through the whole supply chain, causing businesses to suffer and layoff people or close, further lowering personal income, leading people to spend less. Wash, Rinse, Repeat.
In the long run, it's probably a good thing, as American's have been spending far outside their means for years, but retrenching our spending/saving habits is going to be a brutally painful process for everyone.
I'm all sunshine today.
I think bh got everything right. Savings are a good thing, deflationary cycles are horrid. The only way to get out of a deflationary cycle is to spend, spend, spend, which no one will do because they're terrified of losing their jobs. The government has limited tools at their disposal to fix this (actually, short of sending everyone in America a $300 Wal-mart gift card every week, I'm not sure what they do have at their disposal).
Globally, we're screwed. This could be a lost decade, essentially meaning that there will be 0% growth worldwide over the next 9 years. This is Bad News.
Ironically, now is also a great time to make money. Counter-cyclical trends like people buying more fast food or booze means that some businesses will do very well (McDonald's, for instance, just broke their profit record). Also, you know how you're supposed to buy low and sell high in the stock market? What better time to buy than now? There will be people getting rich off this mess every day, which is why you should invest today if you do have money sitting around doing nothing.
As far as how we get out of this mess, I'm not sure what the right thing to do is, actually. I mean, I think Obama's government is on the right track of trying to rectify the last 10 years of bad fiscal policy by getting us back to a counter-cyclical fiscal policy (save when the going's good, spend when it's bad - Al Gore's lockbox is sounding pretty good right now, isn't it?) but that's only part of the solution. I think that it's a great idea for Americans to become more fiscally responsible, but at the same time, I don't think credit is a bad thing. I'd like to be confident enough in my earning potential that I can bet that I'll have the money to pay things off over time. The mortgage boom caused by irresponsible lending and borrowing got us into this mess, but not using credit cards isn't going to get us out. I think we're all going to have to muddle through as best as possible and hope that we work for stable companies that were responsible savers.
You're only one person. If you were a REAL patriot, you would start popping out the kids so THEY could shop.
*tsk* I weep for America.
I'm the economy's wet dream, I try to save (and I sometimes I do) but then I go to target to buy socks and green tea and leave having spent $120 on crap.
I swear this is not a sad attempt to justify my bourgeois spending habits, but I really do believe that buying stuff, within the limits of your checking account of course, is totally healthy and good for the economy. But not on credit. Heavens, no. I gave that bad habit up eons ago.
I'm not changing my spending habits one bit. That's because I'm a hording tight ass no matter what the economy. It comes from having both parents raised on farms that survived the Great Depression.
Plus, when I bought my house I made sure to get a fixed interest rate. I heard all my parents' friends talk about the hit they took when their interest rate climbed 25 years or so ago and made sure not to do that. Now I see everyone who got the variable interest rate and were living much closer to the edge than I ever did going down in flames. The neighbor who bragged about paying only 2% down compared to my 20% down can't give her house away.
Plus, I found a house that I can afford. My failure to believe that I deserve more helped.
Deregulation didn't do this to us. It's the people who were being regulated that did this to us.
Jamie - Really? What about that time you wore one of my dresses, and stretched out the shoulders?
bh - Well, the Economic Apocalypse is pretty darn cheerful!
Jason - I don't mind credit as a general concept. That is, if you're investing in something that will appreciate over time (a college education, a house that isn't a horribly overpriced McMansion in an exurb). I think people got too much credit for things that either have no value (clothes, electronics), or depreciate rapidly (brand-new cars).
Lacochran - Depends...are you going to babysit? Or at least buy me lots of baby gifts?
Jo - Target is EVIL. I only go once a month, because every time I see all sorts of neat things I MUST have, and they're all so cheap I figure it's OK. Then I get to the register, and I've somehow spent $75.
HP - I love to shop, but I try to make sure I'm within my means. Once my income stabilizes, I'll be raiding every sale I can find.
Ibid - What? You're ENTITLED to a big huge house, right away, without saving a penny. What are you, a Communist?
From a larger perspective, the economic problems we have are a result of a global spending/saving imbalance. In the "western" world, American's spent too much and everyone else saved too much. (obviously, this is a bit of gross generalization) That has to correct itself, and it will, but it will be painful and it may involve us no longer being a superpower, or at least the world's dominant economy eventually.
I tend to agree that intelligent purchasing within your means is healthy for the economy and also in your own self interest. If you have money, investing it in good companies/mutual funds will pain amazing gains down the road. But that road could be very, very long.
On that bit of depressing words, I'm off to engage in some quality weak economy activity: Drinking cheap beer.
I need a bailout.
This is so true! I see why our economy would be in trouble if people don't spend their money...but up to this point, experts were telling us that Americans didn't save ENOUGH. Crazy. Good thing I've always been a saver and I'll just continue to be! :)
BH - I love cheap beer, in any economy.
Snay - I think it works sort of like a bank loan: in order to get a bailout, first you need to prove that you don't need one.
Zandria - Sounds right. I'm not for hoarding, but I just plain can't agree with the idea that you're supposed to spend-spend-spend when you don't know if your company is the next to go down.
Last night I realized I can't remember the last time I bought anything "unnecessary", short of food and booze. Then I realized there are a lot of "necessary" things I've been skimping out on too, like a winter coat and boots that keep me from slipping on used condoms on the way home from work. Sorry America! One of those articles was clearly for me.
Ok, totally unintentional, but we just blogged about the same damn topic. Sorry, you are just going to have to excuse my stalking.
Jack
http://adventuresinvoluntarysimplicity.blogspot.com/
The last time there was pressure to go shopping more was after 9/11 and that got us here, so I think saving money might be a wise choice indeed. Besides don't the parts of the world that still hate us, hate us because of our gratuitous wealth and spending habits? I saw screw the newspaper headlines and do what feels right!
LiLu - Booze is never, ever unnecessary.
Jack - I CONTROL YOUR BRAIN.
Emma - I think that, "be patriotic, go shopping" is part of what got us into this mess. Who ever heard of consuming more, not less, when your country is at war?
Shannon you need to buy THIS:
http://www.theonion.com/content/video/sony_releases_new_stupid_piece_of
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