Lame: Impending Economic Doom, Having To Be Financially Sensible
I bought gas this evening–a pretty rare event for me. I rely heavily on public transportation, so I only need to fill up my car every five or six weeks. The Sunoco station has little TVs playing the news above each pump, presumably to distract you from the astronomical amount of money you’re dropping on that gas, and I noticed an economic pundit say something about, “including the possibility of the r-word.”
Not, “including the possibility of the r-word, recession.” She didn’t need to explain it: everyone knows what the r-word is. What’s that joke–the media has correctly predicted two out of the last 97 recessions? Obviously, they’re talking about it enough.
On the one hand, I find the truly apocalyptic economic forecasting pretty convincing: fuel and food prices affect more people more deeply than most other economic markers, and they’re getting out of control. I believe that the people directly affected by the subprime meltdown are in real trouble, and that letting the market correct itself around them is socially unconscionable.
However, a lot of the punditry is pretty foolish, and meant, I think, to terrify where it isn’t necessary. In particular, I felt like this article from MSNBC was insulting my intelligence on purpose–they take the thesis “inflation means your dollar buys less” and panic.
But the people in the article still sound like they’re living at the highest standard in the universe. Somehow, having to plan your grocery tips, think about what you’re buying, and avoid unnecessary luxuries doesn’t sound like an economic apocalypse to me. There is an aside in the article about increased food bank usage–that, I think, would be an interesting story. Unfortunately, they focus on the less concrete pains of the comparatively well-off.
Being priced out of tiny wasteful things might be the only way to get Americans to reduce their environmental impact–and as for the rest of the article, consequences like, she’s lost weight! Her kids regard going out for dinner as a treat! sound pretty great.
I think the personal finance bloggers make more sense than the pundits–the lesson I keep reading about from the laymen is that sound principles are sound principles, come feast or famine.
Am I missing something, dear readers? How have you felt the pinch of inflation–and how have you dealt with it?
I think the most frightening aspect of inflation recently has been the stealth quality of it. Milk is a lot more expensive than it was a year ago. I seem to be paying more for peppers and lettuce and especially tomatoes, although my local Pathmark assures me it’s due to unusual weather patterns (which I find comforting – it’s not inflation, dear customer, it’s climate change)!
The economic apocalypse is unlikely, but what most people don’t want to admit is happening – and has been for some time now – is a long, slow, 1% per year degradation in the quality of life. Nothing too severe, just little by little vegetables get more expensive while high fructose corn syrup products get cheaper; gas gets more expensive and Metrocards buy fewer rides; etc.
I am a pessimist. TV news does love to scare people, but just because most of the networks are filled with blathering idiots doesn’t mean there aren’t a lot of indicators to be nervous about!
Melissa: Great thoughts. I also like the way Brip Blap describes the “stealth quality” of it.
I completely agree that personal finance bloggers make more sense with their principles vs. the panic writings of journalists. Fear breeds fear and sensationalism is what sells newspapers and magazines which is why the media spends so much time covering it from that angle. Personal finance bloggers write from their own perspective and offer a more realist view of how people are coping with inflation and the economy.
What’s that joke–the media has correctly predicted two out of the last 97 recessions?
The joke is that the media has predicted 97 out of the last 2 recessions. The combination of inflation and recession aka “stagflation” was last seen in the late 1970s. As a direct consequence we elected Ronald Reagan president. I remember that period vividly – I hope we’re not entering it again. Currently for me the inflation issue, especially for food prices, is of greater impact than the recession.
It would be interesting to see the impact of the elimination of the ethanol subsidy and the tariffs on sugar imports on American eating habits. However, as far as your general thesis goes I’d rather not see people suffering in order to force them to eat better.