Worries.

As I mentioned yesterday, I'm worried about the mighty consumer. I read that the consumer is powering growth, up to 70% of it of the economy in the U.S. Businesses, I guess, are turning out some consumer goods and creating jobs but are they hoarding their tax savings (as opposed to giving the employee/consumers some of it) or buying back stock (making their stock more valuable, natch, and good for investors in that stock). This seems like one of those things that work for a while and then don't.

When I get a Lyft ride for a short distance to a Christmas party  (like we did last night and will tomorrow night), I worry about the driver. They show up in their late model car. Lyft charges me six or seven dollars. They have to drive around, burning gas, putting wear and tear on their (insured, registered, paid for?) vehicle. I give them a $5 tip, thinking this can never work as a business model. Do they have health insurance? They are probably counted as employed. But are they really?

A lot of what these consumers are consuming apparently is cheap clothing. Made by (let's admit it, if not slave at least not union) labor overseas. Shipped to us in big polluting cargo ships. Worn and discarded quickly, apparently, filling landfills. I understand that the manufacture of clothing causes lots of pollution. Some of this clothing is bleached, scrubbed, ripped, sliced, etc. as a designer 'touch.'

We order some of these cheap clothes (and a zillion other things) from Amazon. (In our house, we order coffee beans, oat bran, an occasional book, and a few other things. Rarely clothes.) Workers toil (and I don't use the word lightly) long days at not so great wages to get that stuff to us.

Are the rideshare drivers and Amazon pickers the consumers powering the economy? Or is it the folks who feel flush because their retirement accounts are full of the stocks of companies who bought back stock with their tax-saving windfall? Do the rideshare drivers and Amazon pickers have retirement accounts?

And saving? Is anyone saving? I read that some people are rolling underwater car loans into new loans resulting in things like a $47,000 loan on a car worth $27,000. Apparently, German people are still saving resulting in negative interest rates and, of course, not boosting their economy with those Euros? Saving is good for the individual but bad for the growth of the economy.

The cheap clothing thing is especially interesting (and worrying) to me. More on that tomorrow. Maybe.

Who's In Charge?

[FFP and I saw this dog in a parked car along W. Fourth on Saturday. His parents were probably at the Farmer's Market. When we first stopped to marvel at the 'dogs pretend to drive' aspect there was a dog in the shotgun seat. Neither dog barked at us when we stopped but that one got into the back seat as if it expected one of us to take shotgun. Driver didn't budge and kept his eyes mostly on the road. Some foreign girls stopped to laugh.]

I've been thinking lately about the economy, about what BHO (my friend Eugene has started calling him this although, really, it doesn't have much of a ring to it) can do, what I can do, what you can do.

I figure, really, that the causes (housing bubbles, Ponzi schemes, derviatives, speculation, bad loans, the rest of it) just have to take their course.

I was thinking about all this talk of the government restructuring loans. Now if we as taxpayers buy these loans or the banks holding them and want to do that, I guess it's OK. But it started me thinking about the mortgages that I own, made on my own real property. What if the government unilaterally decided to retroactively change those agreements? I'm not saying anyone is suggesting that. Still, it gives you pause. What if a bank was solvent and the government decided to change loans it had made retroactively. That would be bad. I'm just saying.

Anyway, with all the flap over the stimulus plan I wonder what difference it will really make. I'm thinking Barack will have more influence as president over deployment of troops and the holding of terrorist suspects than the economy. Really and truly, world economies are very influenced by billions of consumers. This is especially true in the U.S. I know, I know. Jobs=spending. Hope=spending. Tax relief=spending. But I wonder.

So, what am I doing in the current economic crisis?

• I'm trying to shop in independent shops I want to help stay afloat.
  
• But thinking hard about every spending decision.
• And buying an expensive Lego for my great Nephew on Amazon because it is oh so easy. (Click the wish list, pick the toy, click the address of my niece, click my credit card, done.)
• But at least I spent some money on something.
• I'm trying to eat out at restaurants that I love and that are locally run.
• And buy wine as gifts for friends at local wine purveyors. (Because really you are spending money and people are enjoying it, it's gone and then repeat.)
• And buying gift certificates to restaurants as gifts, the same local ones.
• Driving my eight-year-old car less and making trips count. (Sorry, no new car. Sorry, reduced demand for gas. Or is that good? I did do a pretty major repair on it. And really I always drove cars into the ground and paid cash for new ones even when I was making great money.)
• Planning to buy things from Royal Blue Grocery's new location in my building rather than from bigger retailiers because a grocery store in your building...how cool is that? They may open within the week.
• Looking to buy a little storage cabinet for the second bathroom and still considering new digital cameras, a GPS and a netbook. I'm just saying: I might buy some stuff. I keep resisting, though.
• I'm thinking of planning trips to New York and maybe France.
  
• I'm staying in the uncounted unemployed. I have been 'retired' for six years. Which just means I quit my job to live on my investments. I'm too young for Social Security and I have no defined benefit pension. I don't count in the 7.6% and growing ranks of unemployed. I am not taking a job that someone else needs. (Note that Barack's wife left her job, too, and is probably in the uncounted unemployed. She had a good job, too. I'm just saying.)
• I'm spending money on my credit cards but paying everything off every month.
• I'm still giving to causes but taking a harder look at my budget for that. (See above about trips. Selfish, huh?)
  

It's all about a bunch of people doing their things, isn't it? One at a time. Until it becomes a trend. One guy getting a stupid upside down mortgage and onerous amounts of credit card debt is nothing. A bunch of you? That's something. (It's not me. It was never me!) When one company lays off people, too bad for those people. When every other article is about layoffs or furloughs? So goes the economy.

Let's hope the 'economic stimulus' can take a swipe at stalling or reversing these trends. Let's hope it isn't like that tax rebate last year. As my dad says, "I still have mine in the bank." Of course, soon he has to give much more than that to the tax man.

Consumer Price Index

I read a post on Holidailies, guided there because it was a Best of Holidailies selection. A detailed tale of managing a severe cash shortage. I need these things to remind me that we are lucky to usually have the cash to pay the bills and to send to relatives at this time so their holiday can be less stressed than this person. In fact, my niece who was designated to be Santa for stockings and kids' gifts with my money said in an e-mail: "We have presents for ALL! HO HO HO. Ok we have little presents for the big people and big presents for the little people. Ain't that just the way of the world?" They don't have a lot of money but they do have food, shelter and some gifts for the holidays. I worry that one of my nieces' husbands will lose their job. Or that my other niece, who has been waiting tables on the weekend while her husband looks after the kids to make ends meet, won't be able to make enough because of the downturn.

In this house we are thankful that we are in a position to not worry how to pay for gas in the car. We can go out and eat, have drinks, give money to our charities. Heck, in this condo we haven't even had to turn on the heat so far this winter let alone worry about how to pay our electric bill to pay for heating.

But. Sometimes the price of things just stops me in my tracks.

We went to a UT Women's Basketball game yesterday. (The women won, beating Tennesee who was ranked just below them in the polls.) Years ago (really a long, long time ago) we gave a small endowed scholarship to UT for a woman athlete studying journalism or communication. Really, we gave this so long ago that I think it was our first major donation to anything. Anyway, they send us tickets to Women's Basketball and we attend and, if we ask, they give us admission to the booster 'club' before the games. Yesterday we went in there. I thought I'd have a beer (which you cannot buy in the stands). After the bartender pulled a Shiner Bock, I was readying a dollar for a tip when she said the price. Seven dollars. Seven dollars? This beer is made in Central Texas. No one, anywhere, not even at the Four Seasons had ever charged me seven dollars. I don't think anyway. (I'll have to check the Four Seasons although I usually drink wine there. Haven't been there in a while.) Anyway, plastic cup, belly up to the bar service. Seven dollars. I had the money. It just shocked me. I didn't have an extra dollar, though, and the quarters in my pocket were to ride the 'Dillo bus back to downtown. So if that bartender was counting on me tipping, well I was too flabbergasted to do it.

I am glad I have money for a beer here and there, out in some public place where they can gouge you. I paid $4.50, plus left the half dollar for the bartender, for a Fat Tire, poured from a bottle into a plastic cup, at the Armadillo Christmas Bazaar Saturday. Expensive but not gouging so much. There was admission to the place, but there was live music.

Anyway, I'm just saying. Just because I have the money doesn't mean I won't balk at a certain price level. I'll never buy a drink at a game again. And, by the way, that 'Dillo bus used to be free. (Unless you consider that the Capitol Metro gets a cut of our sales taxes.) The transportation guys were trying to promote less driving of cars in downtown. Now it costs fifty cents. But, sadly, yesterday the two buses we rode were empty except for us. We missed one bus, which we saw pass us, empty, as we walked to the stop. So the transit folks are paying for empty buses going around and around downtown and UT. With my tax money. It's sad. I wonder how many people would ride if it were free. It does matter what you charge. Especially now when people literally don't have it in their pockets (or in a failing bank).

I noticed it said in the newspaper that miles driven in the U.S. dropped before the run up in gas prices and kept dropping when the price came down. Yeah, people. Some people don't have jobs to drive to, money to spend at the mall and they certainly aren't hankering for an out-of-town excursion with maybe a hotel stay if things are tight. So price makes a difference but some people won't be able to buy, no matter the price.

When I went to the convention center Saturday to the Christmas Bazaar, I noticed there was a sale of National Geographic products in another area of the center. Giant piles of discounted books, maps, toys, some backpacks and the like. Maybe National Geo had a mail-order biz or mall stores and were closing out the stuff. It was interesting because people had their carts piled with stuff. Maybe they were getting a toy or book for everyone on their list for ten dollars or less, thinking what a bargain it was. There were guide books to New York City and the like. Maybe it's good reading even if you can't afford the trip. The lines to check out purchases were longer than the ones at Costco the other day. And there, as I mentioned the other day, the carts were full of food.

Times are hard out there for our neighbors. Businesses will fail, people will suffer. And I don't think it will be over soon. And more and more people will be looking at prices and wondering 'is it worth it?' I just wish the politicians would do the same. What price for each job saved and for how long? It all seems like fodder for my Journal of Unintended Consequences which I just can't seem to write for these days. Perhaps because there is just too much to say.

[Reflection is in the Spaghetti Warehouse glass, a venerable family place on West Fourth in an old train shed. We never go there and I imagine it is seeing less business these days. But who knows?]