Thomas Friedman is freaking out:
I go into restaurants these days, look around at the tables often still crowded with young people, and I have this urge to go from table to table and say: "You don't know me, but I have to tell you that you shouldn't be here. You should be saving your money. You should be home eating tuna fish. This financial crisis is so far from over. We are just at the end of the beginning. Please, wrap up that steak in a doggy bag and go home."
I am endlessly charmed by chatter about when this slowdown/recession will end. Will it be late 2009? Maybe early 2010? Just a few days ago, a man stopped me at a party and asked: "Are we in the fifth inning? The fourth inning?"I am charmed by these comments and questions because they assume a fact not in evidence: that the slowdown/correction/recession will end within a short time -- or even within a measurable time.
This time it's different. Or, because that is a dangerous phrase, let me say that maybe this time it's different.
The problem now, as in 1929 to 1940, is that the economy is not functioning normally. It is shot through and through with fear, even terror. Worse yet, and unlike the situation in the Depression, government miscues have been only a part of the problem.
(Yeah, like Citigroup's suicidal assuming of crazy risks in an effort to make even more piles of money, a story well told in a lengthy NYT piece today. You will note that Citigroup's Robert Rubin played a key role in the self-destruction of Citigroup by his encouragement of insanely risky strategies -- a role he played as Clinton's Treasury Secretary. Truly, this calamity was brought upon us by both bipartisan government policies, and reckless behavior by private industry. Rubin is the embodiment of the failure of this country's financial and governmental leadership class. By the way, don't miss the WaPo's front-pager about how the Bush administration's head of the Office of Thrift Supervision not only didn't care about doing his regulatory job, but actually didn't believe in regulation.)
Anyway, I'd suggested to Julie yesterday that we might take the kids today to a certain restaurant we like. We haven't been to a restaurant as a family in a while, and this restaurant could use our business. But having read Friedman this morning, we'll stay at home today, and this cafe will lose business. This is how it happens. Tom Friedman, in a small way, contributed to the contraction of economic activity in Dallas today, and hastened the demise, possibly, of a small business. I don't blame Tom Friedman. He's right, of course. But you see how the cycle happens.
It will be interesting to see how Black Friday plays out this year. I have always hated that hideous post-Thanksgiving shopping Saturnalia, with its deranged mobs of consumers queuing up outside mall entrances at midnight, eager to practice a Kama Sutra of consumption. This year's Black Friday will look very different, I'm sure.
Yesterday an L.L. Bean Christmas commercial caught my attention, because the company uses a Fountains of Wayne song to sell its wares (watch the superb commercial below the jump -- doesn't it make you want to buy sweaters and boots and fleeces?) It was a lovely commercial, and made me realize that despite my grouchy anticonsumerism, there is something deeply pleasurable on an aesthetic level about Christmas shopping. It was unusual, though, to watch the L.L. Bean commercial and to have it register with me that there was no chance at all that I would buy anything from them this year. I really like L.L. Bean's stuff, and have bought from the company before. It's a good company that makes good stuff. But we just can't afford to take the risk this year. We have the money, if by "having the money" you mean having funds in our accounts. But we've got Frugal Friedman Fever, in a way we've never, ever had. It will be strange to go through this entire holiday marketing season knowing that no matter what we see and hear, we are intentionally and radically closed to these appeals. I hadn't realized until watching that Bean commercial how even though I've tried to follow a Christmas shopping ethic of restraint, part of the fun of the holiday season was in allowing for the possibility of seduction by advertisers.
I mean, it hadn't been clear to me how, despite my sense of propriety about consumerism, I had enjoyed the wicked pleasure of temptation, because I'd always known, deep down, that if I really wanted the thing, I could find the money for it. That's why God made credit cards. Even if I didn't buy the thing -- and I rarely did -- I confess that the possibility that I might was a delicious feeling.
Well, not this year. And I know I'm not alone. Watch the L.L. Bean commercial (the Fountains of Wayne tune is "Valley Winter Song") below, and see if it strikes you the same way.
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I don't trust anything these TV financial "experts" say - I'm refering mainly to the "popularizers" like Jim Cramer, Suze Orman, and to a lesser extent, Ben Stein and Tom Friedman. These people are (for the most part) entertainers, not experts. Tom Friedman is a journalist, and sometimes has insightful things to say, and sometimes not.____Given that I tend to buck trends, I've been going out and spending money, using gift cards I got last Christmas and supplementing them with my credit card. (I didn't do that earlier in the year because my credit card balance was too high, now it's low enough that I can pay most of what I've spent off in one payment.) ____Admittedly, I'm not giving to charity this year, except a small amount to my church. Charity begins at home, and I've been quite stingy with myself for way too long - I'm trying to remedy by being a little more stingy on gifts and contributions, and a little more generous to myself. (I realized recently that I spend a lot on contributions and gifts while not spending on myself and not saving - I'm trying to change that.)____My understanding of part of what is causing this crisis to continue is that it is so hard for consumers to get bank loans to buy cars, etc., at the present. ____It seems to me that the focus should be helping people stay in their homes by rewriting the terms of mortgages to make them longer at lower interest rates, and possibly doing the same thing with credit card debt. The credit crisis problem seems to have more to do with predatory lending practices, and "resets" to outrageously high interest rates. The greed of lending institutions, in other words. Just my two cents.________
Your Name at 2:06 p.m. was me.
There is nothing wrong with saving and frugality; our problem as a whole is that we moved away from these two principles as the *default* way to live.
OTOH, a frugal life doesn't mean you have to avoid going out entirely. Just do it less often, and make it more special.
The advantage to doing things for yourself (gardening, sewing, home repair etc.) instead of just plunking down money is this: when you plunk down money, you get the job done, but you don't *learn* anything. You aren't any more skilled or smarter than when you started. You have a fixed toilet, yes, but you don't know how to fix your own toilet (within reason - I'm not saying everyone can be an expert at everything.)
OTOH, when you do something yourself, you are constantly building intellectual, cultural, and even social "capital." (Social capital comes in when you learn from someone else - you sometimes make a friend as well, and can trade some other kind of learning, perhaps, with that person.) The whole social network is ultimately strengthened when people have more knowledge, more confidence, more skills, more social contacts.
But really, how many restaurants can provide you with better tastier food than you can make at home?
Well, I'm a bachelor who doesn't cook, so trust me, just about any restaurant I can throw a stick at can provide me with better, tastier food than I can make at home.
At this point I still shop for what I need but am trying to put my money to small business where ever I can. That means the neighborhood independent coffee shop vs the big chain and my local farmers market vs Whole Foods. As for corporate outfits, I think they are part of the problem.
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