Nov 6, 2008

Hard Times Reaffirm Some Apparently Enduring Values

For many of us older folks, the reappearance of hard economic times is both fear-inspiring (if our retirement funds are in the stock market) and a confirmation of some of our old-style values many thought were artifacts of a bygone time.

Many of us had trouble adjusting to the good times we have enjoyed for more than 20 years, and we never really did trust that they’d last. It’s a great time for, “I told you so,” except we didn’t really tell anybody. If we knew it, we failed to say it louder than a whisper.

I am not so ancient as to remember the Great Depression of the 1930s, but my parents lived through it as young adults. It affected them for their entire lives, and it affected their children because of attitudes they passed on to us.

Many of us remain price-driven, something we have unsuccessfully attempted to pass on to the next generation. We shop because we have to, not usually for pleasure. We look for bargains, compare prices, buy generic products, use coupons sometimes, don’t throw stuff away until it is thoroughly and undoubtedly trash and sometimes buy stuff off the “reduced for quick sale” produce rack. Some of us eat black bananas. We cook food at home.

So, the reappearance of hard times reaffirms our values, two decades after they began falling into obsolescence, and makes us wish we’d believed more heartily in them.

I expect to see some good things come out of the current economic shock.

First, I hope my kids and their friends will stop going through my refrigerator and throwing out date-expired food. I never quit using the simple smell taste, quickly followed by the taste test if the first one passes. I do not believe that sour cream can ever expire, since it’s sour to begin with, and I also know that whatever grows on a dairy product won’t hurt you no matter how black and ugly it looks. (That’s not true of chicken.) Limburger cheese is by definition rotten when you buy it, and blue cheese is mold-ripened – read the package.

Secondly, Michigan is one of those dozen states that have their initials on the labels of cans and bottles stating that a deposit has been paid and you can get that back by returning the container. The 10-cent deposit had been wearing out. More and more deposit cans and bottles littered the roadsides and parking lots. Maybe it’s not really litter, because there are still enough people who will bend over to pick one up now for a dime later. Tossing your used can was getting to be a charitable donation. Now, I think, these poorer folks will have more competition from people returning their own containers.

Third, it would be nice to think that perhaps, this time, Michigan’s automobile industry will respond to the energy crisis that has sparked a big part of the assault on everybody’s disposable income. Along with my other bad habits, I bought a Volkswagen Beetle in 1964 because I liked, even then, to get good gas mileage. I drove it 196,000 miles and got 29 miles to the gallon from my 36-horsepower engine.

But the American carmakers never saw a vehicle they couldn’t improve by ruining it – making it bigger, giving it more horsepower, adding weight so soccer moms feel safe and giving every young man a pickup truck. Our state senators sponsored legislation to lend $25 billion to American carmakers so they can retool to meet the times, but one must wonder how now is different than 1973 or any other time they failed to rise to the occasion.

Most cars are used for commuting and carry one passenger. Why don’t we build cars for that purpose? Because American carmakers watch and read the advertisements they create, and then believe them.

Fourth, perhaps now Americans will turn their attention to figuring out how to prosper in what one writer calls “The Post-American World.” (Journalist Fareed Zakaria has a hot-selling book with that title.) It has been evident for some time that the United States is on the wrong track in its posturing in the world and needs to adjust – diplomatically, economically, militarily – to what Zakaria calls “the rise of the rest.” The pie is being shared differently, and our hope for prosperity in the future lies in baking a bigger pie. We have the innovativeness to remake how energy is harnessed, for example, and we need not just beat the Chinese and Indians to the oil wells and club the Iranians. The future economic benefits of green energy are huge.

Fifth, it won’t hurt my feelings if we once again emphasize price and deemphasize convenience in our consumption. I never did understand why sliced apples in a plastic bag were convenient, since my fingers don’t open plastic bags nearly as well as my teeth bite apples.

On a more serious note, there are some really important lessons we are now learning. There has been a titanic struggle under way between the forces of excess, oddly called conservatives, and the forces of moderation, oddly called liberals.

George Soros, the billionaire investor, said recently that while free markets are good, they are not perfect. Oversight is needed, and that is what we have government for. It is not correct to believe that pursuit of our individual interests will achieve the overall common interest. Operating in a social manner is not socialism.

Boards of directors failed to make their corporations operate on behalf of shareholders or customers, as the excessive compensation of executives testifies. Now, it appears, the government will have seats on many corporate boards, especially in the world of finance, to restrain the greed.

One thing I hope comes out of this serious recession we are entering is the demise of the word “consumer” and rebirth of the word “customer.”

People think that the “Reagan years” and thereafter were years of conservative values when, in fact, commonly understood principles of economic self-restraint were thrown to the winds by both “sides” – the consumers who wanted everything and the marketers who wanted to stuff them with endless stuff.

The base of the looming recession stands on debt, both household debt and U.S. government debt held by countries that have provided us with goods and energy and then lent the dollars back to us. That debt has to be brought under control, which means not only that the spending spree must end, but past spending sprees purchased on credit must be paid for.

Next year won’t be an easy one, but it could lay a better base for a bright future.