Bush: "I encourage you all to go shopping"
I've spent my whole life spending frugally, the past few years especially so. I desperately wanted a new car. I couldn't afford it, so I kept the one I had. I wanted to buy the latest fashions, and to go out to dinner at the trendiest restaurant. I couldn't afford it, so I didn't. I wanted an SLR camera to satisfy my photography habit, but the cost was just too high. I got a hand-me-down second-rate camera instead. I haven't bought myself a pair of shoes other than a pair of sneakers to replace my old pair that had holes in them. I ordered them over the internet at a discount. While others spent $3.00 on their morning coffee, I ate a $0.25 granola bar.
I was so worried about spending because I saw others spending more than they possibly could. I had read the statistics. Americans saving a negative percent of their income. The average family carrying a large balance on a credit card. Mortgages and home equity loans increasing. "We" were borrowing and borrowing, and it was unsustainable. When we finally couldn't spend anymore, the businesses that had benefitted from those who had been making a habit of spending more money than they were making would see major drops in income. I saw the economy headed for disaster.
That's why I decided to start watching the stockmarket, waiting. I noticed articles from this site while I was watching the markets, so I wandered over here and decided to join. I joined over a year ago, and made many of my picks (such as WalMart) because I was waiting for the economy to crash. And it did. And the taxpayers bailed out big business to the tune of $3.5 trillion dollars. I might as well have made the same stupid choices as everyone else, because my money's going to pay for it.
But what makes me more furious than the stupidity that led to this crash is the stupidity that's following it. A WSJ article posted to Yahoo Finance made me sick reading it. The author talks about how "we" changed our definition of want and need. "We" upgraded from Timex to Rolex and bought $800 Jimmy Choos, and even those who aren't worried about their finances have decided to do the responsible thing and stop spending money. Wait, what? Many people made fun of Bush for encouraging us to go shopping to support the economy in the recession of 2001-2003. However, he was right.
The article highlights the situation of a woman named Mindy Gail. She, until recently, had clothes in her closet she had never worn, tags and all. Then some of her friends lost their jobs, and one of her friends who owns a restaurant said she might even have to close it. So Mindy Gail, and her parents, are understandably worried. Mindy Gail has cut back her shopping, saying that "When I see people around me who are struggling and frightened, it really doesn't feel like a good time to shop. It's not appropriate." And of course, Ms. Gail's parents, who had been living in retirement comfortably, have stopped dining out.
Reading about this kind of logic is what makes me furious. Mindy Gail's comfortably retired parents stop dining out. Ms. Gail's friend may have to close her restaurant, because not enough people are dining out. And because Ms. Gail's friend may have to close her restaurant, Ms. Gail cuts her spending out of fear, leading to more businesses closing and more fear. It's a vicious cycle, and I'll say it here and now: Bush was right. Go spend money. Don't feel guilty about spending money, as the article implies people are. Feel proud. If you have it to spend, go to a locally-owned independent business, like a family-owned restaurant, and support your local economy. The economy is the way it is because people have stopped spending money, not because spending is an irresponsible decision.