Friday, January 15, 2010

Braving the new economy

Despite claims that the recession is over, the economy just doesn't look good from here... does it from where you are?

A lot of people are cutting back, trying to pay off debt and build up savings, "just in case." They're trying to get themselves into a situation where they should have been long ago. In a way, that's good. And in a way, it's bad because it takes even more money out of circulation.

There seem to be more layoffs and company closings, just as many home foreclosures with almost a feeling of quiet panic in the air. We all see the economy through our own eyes. If you've lost a job or a home, it's worse; if you're still working and have your home, it doesn't seem quite so bad.

Either way, it's different. It may never go back to where it was, which in a way is good. And in a way, it's bad.

The worst part, for many, may be adjusting to it. The economy is not what it was and it probably - even hopefully - will never be the same. Ever spiraling inflation, new, pointless products "invented" every day, malls and credit cards and high fashion followers make for a shallow populace.

I think America is better than that. Given a chance, we will survive and be the better for it.


  1. It seems to me that the "old economy" was built like a house of cards, and it only took one little breeze to send it all falling down.

    When we recover from this recession, I hope the economy is built on a better foundation. I hope people remember the fears they had about job loss, foreclosure, etc. and decide not to overextend their budgets anymore.

  2. I agree... absolutely. I believe that, given a chance, it will be.

  3. Gosh, I hadn't heard that the recession was over. Last radio news report I heard said with was "slow going."

    One of the good things though,is that folks are getting back to basics and hopefully seeing that a frugal lifestyle is a good thing.

  4. I am also of the mode of saving these days in any way I can. The consumers (until recently) have had the power but lately it seems that we are getting it right in the wallet! Banks raising fees even though they have been bailed out, disasters such as the freeze in the south will raise prices and recently on Yahoo News there was an article about consumer prices going up! As you mentioned Pat there is a quiet panic in the air. I believe what just happened in Haiti is also of a deep concern because disasters can happen at anytime without warning. I am doing as the government says to do and stocking up on emergency supplies (just in case.) Already our New Year is filled with new worry about how to survive! Well if it isn't one's another! I just do the best I can and hope that everything turns out well.

  5. I'm managing.. but as a single mom .. I'm always thinking outside the box to be frugal but not live in deprivation.

    A lot of things are unnecessary.. I just always clean with vinegar or cheap shampoo or whatever. I save so much in little ways.. and will take all different kind of freelance work... as long as mortgage is paid.

    Last year I rented my garage since I don't drive.. always felt shy to do that.. but so many wanted a garage here in nyc.. and that is 200 a month.. pays for my organic food for my son and me.. so it is helpful.

    Still managing..

  6. That's all any of us can do... do the best we can and hope things work out soon.

  7. Ms. Hen, yours is the classic frugal approach. It will stand you in good stead. Just keep on keeping on!

  8. In my opinion we are not anywhere near the bottom of this recession. To those of us who are saving everywhere we can - I think we need to try to push the envelope and set even a little more aside. We will need it.

    I'm stocking up, too, and putting back more than I think I'll need, to save on necessities now before prices go higher and to better secure myself for later on.

  9. I keep hearing that the economy is bouncing back, but in my state, we still have businesses closing. I've had to take a pay cut. Hubby has had hours cut, and workers have been laid off at his place. It's scary out there.

    We have always been frugal, but we have been tightening our belts even more.

  10. It's scary for a lot of people, "Busy with Kids." I don't think this recession is anywhere near over, sad to say.

  11. Am I right in assuming that you saw the Great Depression, Pat? How does this compare, or does it compare at all? What would you advise us to do besides our cutting costs, saving, and stocking up? Really looking for some guidance here...from someone who has been there and knows what they're talking about.

  12. con't

    thanks Pat.

    My older son got free body wash... at his drugs store job.. you know something are free with instant coupon and employe discount.

    I used the bottle so far to do laundry (things that were not really dirty; clean the floors and toilet bowl etc); and put some in a soap dispenser.

    I try to stick to a monthly budget. i do buy all natural cleaning products from time to time; more costly.. but on some months i spent more.. than I use whatever I have to clean and wash clothes.

    I don't feel deprived at all. I think HOT water kills germs.

    I think that sometimes all those fancy germ killer cleaners are making bacterias/ germs/ stronger and more resistant.. the stronger ones survive and reproduced from what I read. to me that makes sense.

  13. I'm frugal here in the UK. I'm acutely aware, as I'm watching my parents suffer as their pension and savings are too small, so I'm changing my ways. I too am paying off debts and doing without until I've done be honest I should have done without in the first place then I wouldn't owe money! Nothing so far has killed me and I'll just keep on keeping on until I have money in the bank.

  14. No, sorry, I didn't see the first depression first hand. My Mom did, though, and I listened to her and I've read quite a bit about it.

    Stocking up on goods and food is much better than saving money (or buying gold!). Get out of debt. Try to live in a place where you can garden. Learn the old skills - canning, dehydrating, sewing, butchering and so on. Develop a good network of people who can support each other.

  15. Ms Hen, I think that using too much antibacterial stuff is bad, too. Also, it's not good for us to be too clean, our bodies lose the ability to look out for themselves.

    Good for you for using the body wash in so many ways. Soap is soap!

  16. Frugal Life UK, I think you have the right attitude. Do what you have to do. It will be time to retire before you know it and you'll be glad you planned ahead.

  17. well because I live in a warm climate we garden at this time of year (it's backwards from the rest of the country!) I put in my garden yesterday by transplanting fresh veggies. Not two hours later I went outside to look at what I created and not one stitch of vegetable plants were left in the garden! It seems the birds enjoyed my garden instead of me! Next time I'll use a net to cover the plants! Live and learn!

  18. Oh, no! The birds must have been hungry for green stuff! I planted peanuts one time and the pheasants came that night and picked every one of them out of the ground.

  19. Thanks, Pat, for the good advice. It was your extensive knowledge and wisdom that made me think you had known the depression. I should have been referring to the hard years that followed the depression and WWII. I know times were still very tough when I was a girl in the 40's.

    When you say to buy "goods" what exactly are you referring to? I've bought extra gardening tools but that's about all so far. Can you please elaborate?

  20. "Goods" would be anything that you use on a regular basis - clothing, shoes, household needs. Gardening tools are always a good investment as long as they're used. Take inventory of what you have and see what you may need in the near future.

  21. "Quiet Panic" in the air is what I also feel is out there. Within the past couple of weeks, where I live, a bank closure was announced. The bank was not bought up by any other financial institution. The national average ratio of 14 dollars loaned to every dollar on deposit was more like 300 dollars for every dollar on deposit.

    However, I fear that the belief that accumulating money, frugality, etc, by themselves, are greatly insufficient.

    A Canadian economist, Clarence L. Barber (now deceased), at the University of Manitoba back in 1978 wrote a paper on the causes of the first Great Depression. He gave strong evidence that the root cause of that economic depression was a decrease in population growth, due to a lack of households being established, due to the number of young men killed in WWI. I would think that the worldwide flu pandemic of 1918 likely contributed greatly.

    From 1926 on, the number of homes sold dropped. In early 1929, that number plummeted. Of course, the stock market crash hit in October of that same year.

    Barber pointed out that before availability of funds to loan dried up, demand for loans had dropped a few years previously.

    Lack of commitment (how many people live with a 'boy friend' or 'girl friend' but never marry. Also, the delay of and lack of forming families (having children), ultimately has its effect.

    I found out last year, accidentally, that the year the highest number of babies were born in the US was, surprise, 1960 (2007 was announced mid-2009 as the new high #). However, far more people lived in the US in 2007 than 1960. My wife was born in 1960. Birth rates decline in 1961 from the previous year due to the huge impact of one thing— "the pill". By 1965, the "baby boom" that began in 1946 was over.

    A large part for the economic boom of the 1980s until just a couple of years ago was due to the "baby boom" following WWII. However, that 'boom' is as much defined by the birth dearths preceding & following it, as it is by a rise in the number of births rising between 1946 and 1964 (looking at birth rates historically).

    The pill, the patch, implants, and abortion, as well as 'careerism' (getting an education, delaying or avoiding marriage, child bearing & rearing), the 'death' of the traditional family, divorce, fornication, adultery, homosexuality- all of these factors have contributed to our current economic problems. Billions of decisions accumulate, and their effects, in some cases, have a lag impact of almost half a century (some economists have found a lag of about 48 years between births or birth rates and the rise and fall of an economy).

    The average 'white woman' in the US gives birth to somewhere between 1.2 and 1.7 children per lifetime - this is called their 'Total Fertility Rate' (TFR). If not for Mexicans (mostly 'illegal'), Mormons, a few Catholics and Protestants who choose to have large/r families, the US would currently be much further below exact (population) replacement than it now is.

    Economics is all about 'supply and demand'. Insufficient demand, caused by an insufficient supply of babies (all human adults start that way), leads to lack of demand for everything from housing to services.

    Current high and rising healthcare costs are probably perhaps due as much to an aging population as anything. We are more likely to get cancer, heart problems, etc, as we get older.

    Micro-eonomic efforts are certainly needed (being frugal, etc). But, without other 'micro-economic' decisions being done right (getting married, having more children, etc), the cumulative macro-economic choices will likely foil other micro-economic choices.

  22. "Anonymous," I agree that living frugally will not solve the economic problem we now face. I advocate it as a personal hedge against it, though, so that people individually are better able to weather it.

    The idea of a lower natural population being a root cause is interesting, but I don't fully agree. The Great Depression was caused by a combination of things, including heady consumption and a severe drought that brought on the Dust Bowl.

    I think that our present situation was brought on in a similar, complex way. Greed fueled a marketing thrust that has never been seen before. Consumers felt obligated to have the latest and the best of whatever, regardless of their ability to pay for it. The powers that be have manipulated prices and the market and money in general for so long and so intensely that it simply cannot continue. A depression, or recession if you prefer, is a way that a market, left to itself, will balance itself. A free, capitalist market is the most natural money exchange system there is. Unfortunately we do not have that system and haven't had it for some time.

    There is much to think about. Thanks for your post, I enjoyed reading it!