Maybe it’s the way the media insists that all news information conform to a cycle of one kind or another, but doesn’t it seem that downturns in the economy are always “sudden”? The announcement always plays out like that scene in countless movies where Girlfriend One asks Girlfriend Two: “So, things with you and Bob are going well?” Girlfriend Two smiles and nods, then tears start pouring from her eyes.
This time, as far as I can tell, Girlfriend Two was the mortgage lending industry. “So, home loans and new housing starts are going well?” Cue hopeful smile, followed by tsunami.
The administration is going to kick-start the economy by handing out money, a move that, along with the budget for the war, causes me to think Bush and Cheney are making U.S. currency with a mimeograph machine in the White House basement. Next time you get some bills out of an ATM, see if they smell like the math test you took in second grade.
Some of what’s happening feels to me as though buying and spending have just kind of hit a wall. I don’t pretend to understand economics, and I confess that I dropped “econ” 101 in college when I failed to understand why we all don’t just use gold coins. Instead the gold sits somewhere, and we print paper money that, thanks to recent changes to prevent counterfeiting, looks totally bogus.
But about that wall. I guess I could summarize my observation by saying, “How many computers am I supposed to buy?” A better example might be found in a news item from last week announcing that the wireless carrier Sprint Nextel lost 683,000 customers and thus suffered a 25 percent stock plunge. Instead of a constantly expanding market for new cell phones and critically needed services like text messages about cute boys at school, the company may be discovering that once everybody has a phone and all the add-ons they can afford the only next move is to find a carrier they like better.
But for the most part, the current economy is my fault. By continuing to drive a 1988 station wagon I bought used five years ago, I hurt the economy overall and Detroit in particular. When we did get new computers at our house, we found people who were delighted to have our old ones instead of buying new ones. Far from contributing to electronic waste dumps, those old units are now bringing some folks their emails.
This Christmas, when everybody was hoping for record retail sales, I instead made a few gifts by hand, which did stimulate sales of Band Aids. The gifts we purchased operated without electricity or batteries, lowering demand for those. I even made Christmas cards. I’m not sure how much that hurt the economy, but I know the world of watercolor painting will never recover. Back in Wisconsin, my sister decorated the front porch for the holidays with a charming red rocking chair she bought “recycled” at a thrift store. Again, precious dollars lost by the rocking chair industry.
To the chagrin of consumer electronics and retail, our household has completely ignored all the new developments in High Definition television screens and delivery systems. We have a Sony TV that was a big deal when we bought it years ago because the front of the screen was flat. Just the tube; it’s not even a “flat screen” TV. Currently it makes a kind of burping noise when you turn it on, and the typefaces have been rubbed clean from the front of the remote. In this one regard of hanging on to a television set until the knobs fall off or it bursts into flames, I have become my father.
The president’s hope is that by handing Americans as much as $800 in tax breaks they’ll go buy something. Yes, they will. Millions of taxpayers struggling right now will fritter that money away on food, rent, and college tuition. Bush was hoping it would be something more like a new bass fishing boat.
Maybe bass will be safer in 2008, but if you’re not buying a new boat and I’m not buying a new boat… I’m not sure the incentives are going to help beat back a recession. As I say, sometimes consumer spending just hits a wall. There might be some relief if there were a plan to bring home, say, 160,000 soldiers who upon coming home to stay home would buy party supplies and new clothes and maybe a car… hell, maybe a bass fishing boat. In the meantime, I sure hope somebody was rolling tape when a White House advisor patted the president on the back and said, “Well, at least things are going well domestically, right?” so that video captured the weak smile followed by burning tears.