Friday, March 12, 2010

Good News & a First Step on the Road to Recovery

Not snowstorms, not the credit squeeze, not sky-rocketing unemployment numbers, could deter stalwart consumers from opening their wallets and spending last month, and that equates to good news, however cautiously.
Morning news reports sang joyously of the Commerce Department's statement that retail sales rose 0.3 % in February, the largest gain since last November.
Sales were expected to decline 0.2 %. The overall gain was restrained by a 2 % decline in auto sales, but auto sales aside, sales still grew by 0.8%.
Sales increases were widespread and largely across the board; signalling that consumers may be coming out of hiding and fearlessly loosening their money belts. The hope is that the trend will continue, triggering a chain reaction of businesses rehiring some of the 8.4 million positions eliminated since December 2007.
Rehiring will trigger the revival of household incomes sufficient to support spending growth. Considering that consumer spending accounts for 70 % of our total economic activity, those are high hopes we should all be putting our positive thinking/energy behind, if not our hard-earned cash.
Of course, any one with psych.101 under his or her belt might surmise that the millions of snowbound consumers, refusing to surrender to the winter doldrums, plowed and shoveled and skidded their way out and spent last month simply to preserve sanity and overcome being reduced to shut-ins. Did consumers resolve to make do with less in their pockets this month, with the promise of warmer temperatures on the horizon, to maintain collective sanity in the face of February's seemingly endless blizzards?
One person's hope can be another's "Catch 22," as economic naysayers forecast the grim news that as long as jobs growth and wages remain weak, and creditors continue to pile on the interest for some and lower the ceiling or altogether snatch away the credit lines of others, the acceleration in consumer growth will come to a dead stop.
Whether one is hopeful, or among the naysayers, or simply too focused on where the next gallon of milk is coming from to expend energy speculating, there's a lesson to be learned from this harrowing economic mess that humanity has made for itself. And if the lesson isn't learned I fear, if it's not already too late, life as we knew it, in terms of prosperity, will not be reclaimed.
My grandparents were born in the late 1890s & the very early 1900s. Two of them were adult-immigrants, one was the daughter of immigrants.
Although they were hard-working, innovative, remarkably prosperous people who provided for their (many) children while owning warm, cozy homes and successful businesses, I'm sure they never owned a credit card.
Although I'm sure that any merchant would have extended any of my grandparents credit, I can't remember being in a grocery store or any other sort of a shop with any one of them and hearing talk of credit. Cash was the means by which they participated in the economy.
I suppose that if they couldn't afford something in terms of cash, they did without it. They had lovely homes and belongings and social lives, but didn't over indulge.
My parents were born in 1930 & 1931. Like their parents, they worked hard, achieved college educations, provided for their children and had a warm, cozy home.
Their first home was modest but cheerful and clean. To save to buy the first home, they sucked it up and lived in an apartment on the third floor of my grandmother's house in the Bronx. They did without a social life, for the most part, and didn't indulge in extras.
Their second home was definitely a step-up, in size, location and overall style, but they worked and sacrificed for it. They had a Sears credit card early on for emergencies. Later on, I recall a Macy's credit card and maybe a JC Penney's card. But they put their children's material needs first, and didn't over indulge or careen into debt to keep up with society's delusional dictates or with the neighbors.
My former husband and father of my 4 kids was born in 1950. I was born in 1962. Although we partied hardy, once married, we got our acts together. We owned 2 cozy, warm, nicely furnished homes; the first a small one that we flipped and doubled our money, the second we had built; and provided for our kids.
Like my parents, we sucked it up and lived with my mother for maybe a year while saving money to buy a home. The only things we spent money on were essentials, food, rent, phone bill, life and car insurance, medical expenses, etc .
We owned a business and eventually had some very nice extras, such as a lovely and large built-in pool.
We began our life together with a Sears credit card, and added a couple of others, but we never over indulged financially. We never lived beyond our means or beyond our ability to pay later. My ex actually paid off my college loans just before we married.
For approximately the past 20 years, I've noticed a disturbing trend. Although young people still go to work and want nice homes and well-provided for children, many also seem to have no financial self-control. The extras have become essentials that many people, if not a majority, will dive head-long into debt to possess. There's no such thing as saving money for a home, it's just a given that some institution somewhere will spit out a mortgage, regardless of ability to make payments or to maintain the home and property so it retains its value, or increases in value.
Professionally manicured nails, big screen TVs, artificial tans, Prada bags, I could go on and on, have become essentials, rights, paid for by pretend money.
And partying has taken on a whole new meaning. An alarmingly large number of young people continue to indulge in alcohol and substance abuse when expecting a child and after the child is born. It's a really frightening trend.
And now that the bottom has fallen out of the economy, they're all standing around scratching their heads, wondering what the heck to do without their big screen TVs and their Gucci leather goods.
I could go on, but again, I won't.
I will simply say that the economic mess we're sinking in has the same roots-causes as the environmental mess we've watched pile up for more than 40 years. We made it. We allowed it. We acted (or stood by and tolerated the trend) as if credit was a God-given right, from home ownership to fake nails and phony tans. We allowed our politicians to lull us, hypnotize us, into the brain-washed state where everyone is entitled to everything and anything he or she desires - on demand and on credit.
We freely and/or apathetically fell in line, condoning and embracing (or not speaking out against) the "anything goes and at any price" mentality that plagues society.
There are no privileges, only rights. We have compromised our language, our culture, and apparently, few of us have learned a damn thing from history or from our mistakes.
We have become the Roman Empire, and we are falling.
What is the solution? I don't know. But I do know that every journey, no matter how arduous and long, begins with a one step. (Where have I heard that before?)
We have to stop glorifying things, possessions, we don't need. We have to get back to basics. We have to embrace minimalism. Since my divorce and the death of my ex and the fall of our business in the last decade, I've honestly and profoundly learned that people are indeed, more important than possessions.
I have learned that one can be happy while living without non-essentials.
I've learned that I spend a lot more time with my 11-year-old than I did with my 3 adult children because we live more simply. For instance, my son and I decided to forgo cable television more than a year ago. We can afford it, but we decided the money would be better spent on camping trips or on other "together activities," or simply saved.
We take walks and play board games together and read (and discuss) books together and watch (and discuss) movies together. It's really cool.
We discuss issues that we read about in papers and on the Web. We are much more aware of each other and much more thinking and aware than most families. But it all takes discipline and determination. There are times when I miss TV and other "stuff" that I now live without. But I don't need all the "stuff," and neither do any of us!
So perhaps as the first step, along with collective positive thinking for a continued, if gradual, economic recovery, we should all try to give up a non-essential, if we haven't already exhausted our supply of non-essentials, in an effort to live more responsibly for the greater economic and environmental good.
What do you think? Be well & happy!

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