More and more, during my normal visits to potential clients, I am hearing stories of enormous financial distress created through job loss or catastrophic medical expenses. The last half-dozen jobs we have been contracted to perform involve either foreclosure or business failure due to the economic downturn.
Everyone seems to desperately need money, but there's none to be found. The recession ended when? It hasn't ended yet if you ask me. Not according to what I see every darn day. Even aside from business interactions, few people I speak with think that things are better. So what of these reports that we're on our way back to better days? (We are, but not yet.)
Here's my (potentially twisted) take on it. Reports of the recession being over are designed to lead us out of our homes and back into the stores. After all, we're all supposed to benefit from a robust and growing economy. That only happens when we consume goods and services. Demand for goods and services drives everything else so it is of paramount importance that those darned consumers get out there and....consume. Never mind if bank accounts are empty. If we hear only crappy news, we go and hide. Tell us not to worry, that things are getting better and we might just part with those few dollars we've managed to scratch together.
Well dressed economic experts tell us that we all benefit from an expanding economy. We hear reports about Wal Mart or Target's "same store sales" increasing by x percent year over year. Economic growth and subsequent stock price growth only occurs when that number is positive. That is, consumers must come out of their cocoons and spend more in those stores than they did last year. Now I'm not an economist, but I don't think it is too hard to figure out that for things to always be better, we must always spend more. This year more than last, and next year more than this. To do that we need more money. An ever increasing amount of money to go out and get more stuff....so everyone will be...better off? Can that go on forever?
When I last checked, I thought we only had just so much money and world resources. The extra "growth" was in the form of credit. I want more but only have so much money so you just let me pay you later for the extra stuff. We bought everything this way. Homes, cars, big screen TVs...it was all paid for with IOUs. We did it for years. When anyone will lend you money and you've got no skin in the game, it doesn't matter how much a home costs, does it? No down payment? No biggie. Just sign here and worry about it later. Have a nice day. Now go shop for furniture. I credit the Popeye character Wimpy for starting it all. "I will gladly pay you Tuesday for a hamburger today."
One day, we woke up and wondered how everyone could possibly repay the huge amounts of money on all those IOUs. Guess what? Here we are. Surprise. Don't worry though, things are getting better. The boo-boo is well on the way to healing. So get out there and start doing what you've always done. Go spend.
I challenge everyone out there..... Why does the economy always have to expand? Why must we always spend more? Why couldn't we be OK with what we have? Wouldn't we all be happier if there wasn't always this underlying pressure to spend more....to have more...for things to always be bigger.
Those homes I visit where the occupants are about to be tossed out by the bank.... They're always full of stuff...tons of it. I wonder how much it all cost new. I bet sometimes it cost more than the house they're about to lose. If I remember my hierarchy of needs from school correctly, there was something in there about shelter but nothing about boats, TVs or new bedroom sets purchased on credit.
Interesting.
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