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Friday, October 3, 2008

It's Funny How "New" Often Means "Old"

It's hard to escape financial news these days. It seems long ago that I had to read The Wall Street Journal and Forbes on a regular basis to track what was going on in the market and overall economy. Now, I still refer to those publications but more because I'm looking for rational reporting instead of the abject panic and sensationalism found in mainstream (left and right) press.

With a possible bailout bill from Congress, analysts seem to have moved their discussions from demands that Congress must do something to worries that this isn't the right thing and, even more interesting, to prognostications that the American culture is changed forever.

(I'll believe that when I see it.)

The new buzz-phrase I've heard for the last three days is the New Frugality. It's basic thesis is that the current economic hardships will frighten the American public into a frugal lifestyle. After the economy recovers, this frugality will continue because of lessons learned, tighter lending standards and reduced wage increases. 

(Yet again, I'll believe that when I see it.)

What I find intriguing is the way we reframe old ideas as new ideas. Somehow, if you haven't experience something yourself, that makes it new. I would argue that this isn't true at all: it merely makes that new to you - which is really just a nice way of saying that either you simply didn't know before or you're a slow learner. A really great piece ran in The New York Times on this very topic in June. 

I don't often rant, but I am just tired of the moaning, the blaming and the disillusion filling the airwaves and water cooler talk. 
  • I can't believe my credit line has been reduced! Really? You can't imagine why the bank feels nervous that you now have as much debt as your annual income?
  • I'm about to go into foreclosure. The bank ripped me off! Really? Who signed the loan papers? Who said that a $40,000/year wage-earner could afford a $250,000k home?
  • Gas prices are pushing me over the edge! Really? Are you sure it isn't eating out instead of cooking at home? Are you sure it isn't the stacks of clothes you continue to buy and may or may not ever wear?
I could go on, but it just makes me angry.

Our government is out of control, spending what it doesn't have on programs to please citizens that may or may not be in their, or the country's, best interest. Our banks are out of control, no longer looking for a modicum of decent ROI on loans or bothering to qualify potential lenders. We are out of control, buying what we want regardless of need or ability to pay. Somehow we've all bought into the lie that we can have it all and have it now.

Guess what - we can't. If the pundits are right, we'll all soon learn this and will never stray into the land of the debtor again.

I hope they're right, but I sincerely doubt that. I expect to read about future generations finding a "new" frugality they've found after years of financial overindulgence.


  1. One of the major credit card companies (don't remember which one -- that's how effective their ad is in selling me something) literally has a chorus of people singing "I want it all and I want it now."

  2. Such a sad state of affairs. We've managed to build a society of 2-year-olds.