16th
Humble.
This is not a recession like the early 80’s or the tech bubble burst like 2000. This time it cuts a little deeper. This time it feels more personal. People, business and governments around the world are changing.
Restaurants are shedding their expensive rib eye for more affordable cuts like hanger steak. Buying brands as status labels (Gucci sunglasses from Macy’s anyone?) now come attached with a sense of guilt. It was even noted that the recession has even affected the usual bling world of Hip Hop during this year’s Grammys.
Von Lucy Kellaway of Germany’s Financial Times writes this,
“This is our first experience of recession in the internet age, and so far I don‘t like it one little bit. …The web has mentally joined us at the hip, so we can no longer put our heads in the sand. If that sounds painfully contorted, it is because it is…Through blogs, websites and e-mails the world’s economic ills are fed to us on a drip all day long. It is not just that we hear about bad things faster, we hear about more of them and in a more immediate way.”
On Tuesday the President of the United States will sign the 787 billion stimulus bill into action. One of the much talked about provisions is the executive pay cap of $500,000 which The New York Times points out
“To many people in many places, it ($500,000) is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.”
While many of us may not necessarily feel any sort of pity for those who helped us get into this mess in the first place, we do need to stop to think about the ripple effect this cap may have on us. Executives, forced to sell their lavish vacation homes will further drive down real estate values in popular destinations. Kids are taken out of private schools and put into public schools where classrooms are already crowded because the school system was forced to cut teachers this year. Some of our favorite retail establishments will close their doors. High-end vodka in luxury VIP rooms? This is the end of the age of excess.
“In market-research terms, purchases fall into two categories: staple and discretionary. In the past decade or so, New York consumers have had these things, the need and the want, mixed up. Now, that distinction is being reestablished, and forcefully.” (source: New York Magazine)
For all the bad news, there are bright spots. Families are spending more time together. The national divorce rate is dropping. Movie ticket sales for the past three months have been on the rise. Companies (and employees) are being forced to innovate to survive.
Tyler Cowan an professor of economics at George Mason University writes
“In addition to trying to get out of the recession — our first priority — many of us will be making do with less and relying more on ourselves and our families. The social changes may well be the next big story of this recession.”
