Article on the return of thrift in the U.S.

[sofiabugmom]

http://news.yahoo.com/s/afp/20081006...estyleconsumer

Pretty good article, but according to Martha Starr, a professor at the American University, we're not supposed to "tighten our belts too much" (her words), because people will lose their jobs ... and she specifically mentions restaurants and shops at the mall.

Quote from Starr: "If we all go back to penny-pinching, we destroy each others' jobs."

What the heck kind of message is that?!

I'm not saying that I think folks should lose their jobs at these particular establishments, but let's get real here. Maybe I'm being unreasonable but my responsiblity is to my family's needs (which nowadays should include spending as little as possible and saving as much as we can in case of job loss) and is NOT to keeping someone else employed at a restaurant or mall store.

Plus, if I end up going into debt because of shopping at the mall, I'm pretty sure that the sales clerk and waitress aren't going to feel sorry for my economic downturn and come pay my bills. :

[Sonnenwende]

It is really not just limited to what you can buy at the mall. As people (and businesses) wean themselves off of credit excesses for what they need instead of what they want, jobs will be lost in basically all sectors.

The housing boom is a bust. The construction industry is hard hit.

The credit crunch is affecting automobile sales drastically. Sales are down between 15%-50% for most major manufacturers.

Without easy credit, the entire financial industry that employed people around it has collapsed.

Local and state government revenues are down because property values have dropped like a rock because no one can really afford to buy without that credit. California needs a 7 billion dollar bailout, for example. Cuts in government jobs and services are coming.

These are just a few example about how tightening up causes more hardship than at the mall. But there really is no other solution. Time to sober up and realize your job or your SO's job probably isn't half as secure as you think it might be.

The mall is really the least of your worries with the return of thrift and hard to get credit. Overspending created lots of jobs and low unemployment. It will be a painful adjustment back to what the economy needs instead of what it wants.

[sofiabugmom]

Originally Posted by Sonnenwende

It is really not just limited to what you can buy at the mall. As people (and businesses) wean themselves off of credit excesses for what they need instead of what they want, jobs will be lost in basically all sectors.

The housing boom is a bust. The construction industry is hard hit.

The credit crunch is affecting automobile sales drastically. Sales are down between 15%-50% for most major manufacturers.

Without easy credit, the entire financial industry that employed people around it has collapsed.

Local and state government revenues are down because property values have dropped like a rock because no one can really afford to buy without that credit. California needs a 7 billion dollar bailout, for example. Cuts in government jobs and services are coming.

These are just a few example about how tightening up causes more hardship than at the mall. But there really is no other solution. Time to sober up and realize your job or your SO's job probably isn't half as secure as you think it might be.

The mall is really the least of your worries with the return of thrift and hard to get credit. Overspending created lots of jobs and low unemployment. It will be a painful adjustment back to what the economy needs instead of what it wants.

(sofiabugmom's emphasis).

Yes! And regarding what I bolded: EVERYONE did the overspending, including individuals, families, corporations and governments. I know I sure as heck did some of my own.

I guess the thing that really irked me was the professor's assertion that pinching my pennies so I won't worry about more metaphorical rainy days might cost someone a job. Well, since nearly all jobs are in jeopardy right now, I think it's better if I prioritize the spending and save money in case our household income drops to zero.

I keep seeing the story of "The Grasshopper and the Ant" in my head, envisioning a whole bunch of grasshoppers jumping around in frantic search of an anthill at the end of autumn ...

[woodchick]

I'm glad to see that more people are starting to be more concious of their spending, but I thought the article had a bit of a snarky tone. The first example (single mom) had some good points about not driving, bulk cooking etc. But the rest were extreme, and kind of silly- "my socks are ratty" or "sorry grandkids, no Christmas cookies this year!"

The article goes on to say that Walmart has lowered their prices on toys and cut out shipping. Buying toys at Walmart might help your budget a tiny bit, but is not exactly what I would call "Thrift"

Though the article gives lip service to the notion of thrift, I don't think the author gave enough thought to how careful planning, buying used and reuse can help folks live "normal" lifestyles while cutting out the use of credit.

she says, "Two to three years ago if you mentioned the word 'thrift', people would laugh at you and say: 'That's so 19th century'," But I feel as if she is just continuing the laughing, but using the credit situation to bring it to the forefront.

[llamalluv]

Originally Posted by sofiabugmom

http://news.yahoo.com/s/afp/20081006...estyleconsumer

Pretty good article, but according to Martha Starr, a professor at the American University, we're not supposed to "tighten our belts too much" (her words), because people will lose their jobs ... and she specifically mentions restaurants and shops at the mall.

Quote from Starr: "If we all go back to penny-pinching, we destroy each others' jobs."

What the heck kind of message is that?!

I'm not saying that I think folks should lose their jobs at these particular establishments, but let's get real here. Maybe I'm being unreasonable but my responsibility is to my family's needs (which nowadays should include spending as little as possible and saving as much as we can in case of job loss) and is NOT to keeping someone else employed at a restaurant or mall store.

Plus, if I end up going into debt because of shopping at the mall, I'm pretty sure that the sales clerk and waitress aren't going to feel sorry for my economic downturn and come pay my bills. :

I almost never shop at a mall store. When DH & I were looking for a new freezer last month, we visited our local Sears 3 times. That was more than all of last year. We also got pretzels every time. (Hmm...I should add that $16.50 to the cost of our freezer....)

As to destroying jobs - who decides what is a "worthy" job and what is a "fluff" job? The market. And if the market is saying, "No we don't need to have 4 different pretzel chains in each mall" then some pretzel makers are going to lose their jobs.

[llamalluv]

Originally Posted by Sonnenwende

Without easy credit, the entire financial industry that employed people around it has collapsed.

Local and state government revenues are down because property values have dropped like a rock because no one can really afford to buy without that credit. California needs a 7 billion dollar bailout, for example. Cuts in government jobs and services are coming.

The drop in property values has less to do with lack of credit and more to do with lack of capital. People who bought property on easy credit, couldn't afford the payments, and now we are facing a mortgage meltdown and a serious problem in the bond market because of all the junk that was sold as AAA rating (safe).

Had states not expanded in reaction to a false increase in property values, they would not be in a bind. They would have tucked away a surplus and had it for when property values declined again.

[Sonnenwende]

Originally Posted by llamalluv

People who bought property on easy credit, couldn't afford the payments, and now we are facing a mortgage meltdown...

That was what I was saying? People cannot buy homes because they used the easy credit in the first place to buy things that were overinflated in value. Now the access to that same credit has tightened, values are coming back to Planet Earth, and lots of people cannot buy or sell or refinance.

[karne]

I made one of my extremely infrequent trips to the local mall this weekend and it was extremely disturbing. I was looking for girls clothing and it was overpriced junk. I read somewhere on MDC a quote about making every dollar you have do it's job for you, or something along those lines. I haven't been able to get it out of my head. As I looked around I thought, I can do a lot better than this-my money can work harder than this. I don't know if that attitude will eventually cost a job somewhere, but honestly I'd be crazy not to go after the best value I can. For me, that might mean buying one, more expensive item of greater quality and more usefulness. Or not dining out, but using my money for the raw materials for a beautiful dinner at home. I don't know if this is frugal, or just plain common sense, but I am thinking long and hard these days about who gets my money and for what reason.

ETA: The other piece about the mall was that I didn't see anyone with packages in their hands. Lots of people walking around, but not much buying happening.

[sofiabugmom]

Originally Posted by karne

I don't know if this is frugal, or just plain common sense, but I am thinking long and hard these days about who gets my money and for what reason.

ETA: The other piece about the mall was that I didn't see anyone with packages in their hands. Lots of people walking around, but not much buying happening.

I think it's both frugality and common sense, plus throw in some personal accountability and responsibility. Big time kudos to you.

And interesting that most folks were still in the mall, even if they weren't carrying around packages (or maybe they'd just returned something ). It's as if the mall is our society's social center ... kinda makes you think about how much consumer consumption has affected our culture.

[velochic]

Originally Posted by karne

I was looking for girls clothing and it was overpriced junk. I read somewhere on MDC a quote about making every dollar you have do it's job for you, or something along those lines. I haven't been able to get it out of my head. As I looked around I thought, I can do a lot better than this-my money can work harder than this.

I said, "Make every penny have a purpose." That is, don't spend a penny unless it was earmarked to that specific purpose... not thoughtless spending (even if that penny was earmarked for "splurge").

And that's what so many people have been doing. People expanded their spending so that every penny was spent, but was it spent wisely? People operated with the attitude that if they brought in $4000/month, they should spend $4000/month. People stopped thinking that first 20% goes into savings, then what ever is left over is what they could afford. They stopped saving, and then when it was time to pay the piper they're there saying, "I can't afford my house. I can't afford my car." Well, if they had bought less and saved, their savings would carry them through the rough spots. No, if you are spending every dollar you bring in and not able to money into savings, *you can't afford it*!!

So now people are starting to wake up and realize that a Goodwill winter coat for their kid, who will outgrow it by next year, that was only worn one year by some other kid just might be a little smarter to buy rather than that $60 GAP coat. But that mentality has to be the norm, not the exception.

And I don't believe it's any one person's responsibility to make sure that a stranger, who may or may not have contributed to the problem, keeps his/her job. It starts at home. If everyone... *everyone*... changes their attitudes, then as the economy contracts, everyone will have already been shoring up for the needs of their own families and friends.

We're lucky because dh is a tenured professor and that's about as stable as a job can get. I've said this before, if the university shuts its doors, we're screwed anyway because the economy has completely collapsed. But we've still been frugal and prepared for the future. Many people thought the party was never going to end. Now that it has, I wonder if people who haven't live this way will even know HOW to be thrifty.

[sofiabugmom]

Originally Posted by velochic

I said, "Make every penny have a purpose." That is, don't spend a penny unless it was earmarked to that specific purpose... not thoughtless spending (even if that penny was earmarked for "splurge").

And that's what so many people have been doing. People expanded their spending so that every penny was spent, but was it spent wisely? People operated with the attitude that if they brought in $4000/month, they should spend $4000/month. People stopped thinking that first 20% goes into savings, then what ever is left over is what they could afford. They stopped saving, and then when it was time to pay the piper they're there saying, "I can't afford my house. I can't afford my car." Well, if they had bought less and saved, their savings would carry them through the rough spots. No, if you are spending every dollar you bring in and not able to money into savings, *you can't afford it*!!

So now people are starting to wake up and realize that a Goodwill winter coat for their kid, who will outgrow it by next year, that was only worn one year by some other kid just might be a little smarter to buy rather than that $60 GAP coat. But that mentality has to be the norm, not the exception.

And I don't believe it's any one person's responsibility to make sure that a stranger, who may or may not have contributed to the problem, keeps his/her job. It starts at home. If everyone... *everyone*... changes their attitudes, then as the economy contracts, everyone will have already been shoring up for the needs of their own families and friends.

We're lucky because dh is a tenured professor and that's about as stable as a job can get. I've said this before, if the university shuts its doors, we're screwed anyway because the economy has completely collapsed. But we've still been frugal and prepared for the future. Many people thought the party was never going to end. Now that it has, I wonder if people who haven't live this way will even know HOW to be thrifty.

:

Regarding the slightly snarky tone of the article (and I do agree with the PP on this one after re-reading it): this is one of the symptoms of the big problem. We've been taught that we're supposed to spend for reasons other than fulfilling our personal requirements, that is, our true needs and desires as opposed to the ones pushed onto us via quasi-image consultants or planned and/or perceived obsolescence.

Good times? Spend to celebrate. And hey, here's some credit in case you don't have the cash handy. Don't worry, you can pay it all back later, plus 15 percent.

Bad times? Spent to make yourself feel better. No cash? See above.

Financial world going to hell in a handbasket? Spend to keep the economy strong. And hey, here's a tax windfall to do just that. Yes, it's less than we said it would be, but hey it's more than you had before so go buy yourself something pretty.

I agree, it's going to be a long rough trip off the spending merry-go-round for a lot of folks.

[karne]

Originally Posted by velochic

I said, "Make every penny have a purpose." That is, don't spend a penny unless it was earmarked to that specific purpose... not thoughtless spending (even if that penny was earmarked for "splurge").


So now people are starting to wake up and realize that a Goodwill winter coat for their kid, who will outgrow it by next year, that was only worn one year by some other kid just might be a little smarter to buy rather than that $60 GAP coat. But that mentality has to be the norm, not the exception.

I guess I morphed your thought into "every dollar doing a job"-where did I get that, lol? The point is, your statement struck a cord with me, and I'm glad it did. I'm frugal now-for me it was a learned behavior. And I am sure glad that I am not one climbing down off of the designer bandwagon because it would be a tough fall in this economy. I don't equate frugal with poor, or cheap. Rather it makes me think of my grandparents, who lived through the depression. They were wonderful-highly educated (judge), gracious, lived quite well, but they were as frugal as the day is long. They would be horrified by the over consumption of this generation.

And I am the person who just bought the almost new winter coat off of Craig's List!

[Belleweather]

I don't know that she meant it to be snarky, but it is realistic. I just think she stuck her foot in her mouth on the way to making her point, which I take to be this: Consumer spending makes up a whopping 70% of the US Economy, which means that to the extent that we all cut spending we are also cutting out what drives the economy and what drives our jobs. Which in turn lowers household income, which lowers spending, which creates a nasty vicious circle.

Now, some of the ways in which we are frugal ARE helpful to our neighbors and may help retrench the flow of money in ways that are helpful to people rather than corporations and change the broader economy, which would be a good thing. And that's the point that I think she misses -- that actually, when I buy food or a used coat or a service directly from someone in my neighborhood they're benefiting way more from that money that they would if I bought it from a middleman with mark up AND I'm being frugal with my own money.

[Scribe]

Originally Posted by Belleweather

I don't know that she meant it to be snarky, but it is realistic. I just think she stuck her foot in her mouth on the way to making her point, which I take to be this: Consumer spending makes up a whopping 70% of the US Economy, which means that to the extent that we all cut spending we are also cutting out what drives the economy and what drives our jobs. Which in turn lowers household income, which lowers spending, which creates a nasty vicious circle.

Now, some of the ways in which we are frugal ARE helpful to our neighbors and may help retrench the flow of money in ways that are helpful to people rather than corporations and change the broader economy, which would be a good thing. And that's the point that I think she misses -- that actually, when I buy food or a used coat or a service directly from someone in my neighborhood they're benefiting way more from that money that they would if I bought it from a middleman with mark up AND I'm being frugal with my own money.

This is, I think, exactly correct.

Personally, I am not seeing a whole lot of this belt-tightening happening around me. I went to Anthropologie for the first time this weekend, and there was a huge line for people buying $250 jeans and $500 bed sets. Never see that at the Goodwill.

[Contrariety]

Originally Posted by sofiabugmom

http://news.yahoo.com/s/afp/20081006...estyleconsumer

Quote from Starr: "If we all go back to penny-pinching, we destroy each others' jobs."

What the heck kind of message is that?!

AT first I was thinking that it is kinda true... but also I think that if we go back to penny-pinching, we won't have near the need for those types of job, anyway... as in... if people got really serious enough about being thrifty for it to make a dramatic economic shift, there's more opportunity for folks to stay home instead of part-timing it at the mall or restaurants. (Someone's gotta tend the garden and soak the beans, KWIM?)

Just a thought.

[hollyvangogh]

Originally Posted by sofiabugmom

I'm not saying that I think folks should lose their jobs at these particular establishments, but let's get real here. Maybe I'm being unreasonable but my responsiblity is to my family's needs (which nowadays should include spending as little as possible and saving as much as we can in case of job loss) and is NOT to keeping someone else employed at a restaurant or mall store.

Plus, if I end up going into debt because of shopping at the mall, I'm pretty sure that the sales clerk and waitress aren't going to feel sorry for my economic downturn and come pay my bills. :

: ITA!

Well, (and this doesn't apply to problems in construction or whatever...but just to mall-type jobs): whenever I go to the mall it seems like over half the employees are kids. I'm sorry but I really don't care that much if they can't keep their jobs. My family having money for FOOD, RENT, etc. comes before teens having money for iPods, fashion, etc. (I know, I know...SOME are saving for college, don't flame me)!

[Belleweather]

Originally Posted by Contrariety

AT first I was thinking that it is kinda true... but also I think that if we go back to penny-pinching, we won't have near the need for those types of job, anyway... as in... if people got really serious enough about being thrifty for it to make a dramatic economic shift, there's more opportunity for folks to stay home instead of part-timing it at the mall or restaurants. (Someone's gotta tend the garden and soak the beans, KWIM?)

Just a thought.

It's not just those types of jobs at malls and resturants, though. It's ALL jobs. It's the factories that make the goods that are sold in those stores, because less sales means less orders. It's the shipping people and drivers who move them because less customer demand means less demand for their services. It's the administrators for those companies who handle HR and accounting and those functions because as the company needs to retrench or goes under those people aren't going to have jobs anymore. And it's anyone who sells anything in this economy who depends on people who work in any of those industries for their customer base because none of those people are going to have any money to spend on their goods.

[shayinme]

Originally Posted by Belleweather

It's not just those types of jobs at malls and resturants, though. It's ALL jobs. It's the factories that make the goods that are sold in those stores, because less sales means less orders. It's the shipping people and drivers who move them because less customer demand means less demand for their services. It's the administrators for those companies who handle HR and accounting and those functions because as the company needs to retrench or goes under those people aren't going to have jobs anymore. And it's anyone who sells anything in this economy who depends on people who work in any of those industries for their customer base because none of those people are going to have any money to spend on their goods.

I agree with you 100%. Sadly we are all connected, I work with non-profits and the fact is this economic crunch is hitting everyone, not just malls.

[gwen's mom]

Here is a similar article posted on CNN.com today.

http://www.cnn.com/2008/LIVING/wayof...ref=newssearch

[Turquesa]

Originally Posted by gwen's mom

Here is a similar article posted on CNN.com today.

http://www.cnn.com/2008/LIVING/wayof...ref=newssearch

I see this as a truly wonderful development. Thrift stores are a one of the last refuges for shopping and giving back to your community, not pumping money into the pockets of a big box store CEO who lives five states away.