Sunday, December 7, 2008

Financial Meltdown vs Artic Ice Meltdown: Two Perspectives on Our Ecology and Economy

Global consumption is down and correspondingly, so are Green House Gas emissions. From the economists' viewpoint, this is a crisis. For the global warming problem solvers, this is great news. The NYTimes today reports that people are saving a bit more, and charging less. From the frugal lifestyle promoter viewpoint, this is what we've been preaching. From the business perspective, this is terrible. We live in two alternative universes....
As a person with a foot in each world, it's hard to make sense of this. Suddenly our 35-year adult lifestyle MO, living beneath our means, has become newsworthy. Like it's a new concept. Layaway! This is a version of the much-recommended strategy of many consumer-restraint blogs: if you are inclined to buy something you want but probably don't need, postpone the purchase for an hour, a day, a week.... Most people report they don't in the end buy the stuff. It makes me wonder what the vast majority of people were thinking all those years?
Necessity is upending American consumer habits. Some call it down-sizing. Others, advocates of living beneath our financial means and more in line with our planetary fair share, are applauding, calling it RightSizing. Of course many of those caught in the meltdown are sober, responsible elders who already did all their retirement saving, and now must live with 401K's, now dubbed "210K's". It's important to realize that the greed is evenly distributed: there are greedy bank and mortgage executives just as there are greedy consumers. But most people are innocent players, crushed by events. The winners may be, in some cases, middle class families with jobs and incomes who will find it harder to charge with abandon. They will be forced to adapt by living within their means. For a generation which has matured with credit card debt as a way of life, financially responsible habits will be good skills to acquire.

So what to do? In our case, we're not changing our bahavior, since we were already frugal. But we are making a point of going out to dinner fairly often, supporting locally owned restaurants. It was unnerving to eat in a fine neighborhood venue last night and see the whole place empty out by 10 PM on a Saturday night. As the owner mentioned, when he PERSONALLY thanked us for patronizing his establishment, "A lot of great restaurants are just two weekend snowstorms away from closing." We are in for a long, unpredictable couple of years. Fasten your seatbelts.

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