Along with everyone else I keep reading "positive" news on the economy reported by the mass media. Pretty consistently now "a slowing of a decline" is cheered as a sign, well, of... growth! But all this means is that we are still falling into the abyss, only the rate of our falling has slowed down a bit - maybe we bounced off the wall with a little upward movement before continuing our free fall, or met some rising stream of air.
Housing news are seriously cheered by the newsmakers. The sales of new homes rose 3% in July compared to that of June! Never mind that it is still well below what it used to be a year ago when, as real estate professionals, we were looking at each other and saying: "The market is dead." Never mind that it is 3 TIMES less than what is used to be at its peak in 2006.
Well, yes, some number of houses will always be sold no matter what the economy, and at some point job losses will come almost to a standstill because there may be no more jobs to lose.
A friend of mine runs a small company, and an employee of hers recently opined that "thank goodness, we have already hit the bottom." She asked him why he thought this was the case. He said that it was because it became so bad that it CAN'T possibly get any worse: people barely have money to pay for their mortgages, gas and food. My friend is originally from Russia, and she could only stare at him in disbelief after such a statement. A person who has a 4 bedroom, 2 bathroom home, 2 cars and eats out periodically thinks it cannot get any worse? Why? Just because we are Americans, and nothing bad can happen to us? Seriously?
I realize that it is the "American way" to not lose optimism. But feeding people false hopes of a soon forthcoming recovery is irresponsible, in my mind. We are in this recession for the long run, we need to be prepared to run an exhausting marathon, not use up all our resources to survive a short sprint. We need to adjust our habits, expectations, likes and dislikes. We need to learn to curb our wasteful lifestyles. The orgies of consumption we witnessed in 1990s are not coming back, and - good riddance! But to adjust to the new world, to learn to not only survive in it, but to enjoy and appreciate it, we need to switch our mentality from: "OK, just one more push, and this nightmare is going to be over, and life will be back to normal." Life is not going to be back to "normal", because it was not normal before. I think our world has changed for good. And for the good, too. Our preoccupation with material success, with money as the only measure of a person's worth, our unbridled consumerism, our self-centeredness will hopefully be seriously compromised as a result of this cleansing crisis. And the media is doing all of us a disservice in setting the expectations that the return to our old ways is just around the corner.
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Optimism is part of what boosts and economy. If people only think things are getting better, they will buy more, thus putting more money into the economy. It may not solve all problems but work ethic is believing things will get better. Pessimism leads to less sales, less risk, and less building. Why discourage?
ReplyDeleteOK, good point. Here is the premise I am proceeding from. We are stuck in a desert with only a gallon of water. Help may be days and days away. Would you ration water or encourage me to drink as much as I want to now because "it just can't be too long" till they come and rescue us? Do you think the optimism of that kind will actually somehow speed up the rescue? Or will it only endanger us when we will be without any water by the end of the first day?
ReplyDeleteOur demand for material goods was far exceeding our income. We live buried under debt, and our government wants us to continue buying. This is not a sustainable cycle, and it looks like it is coming to an end. Very easy: you can't continue borrowing from the whole world indefinitely. One day you will be asked to live within your means and to pay the debt back. Will this mean that your standard of life will go down? No doubt. Will you like it? No. But it simply CANNOT continue going like it has been for the past almost 30 years. Whether you want to admit it or not, it does not matter. This is the reality, and I only oppose the media and the government trying to cajole us into thinking that somehow life will be soon back "to normal". It was not normal to begin with. It was never like that before 1980. It is nowhere like it in the world. And it will no longer be like it here.
I just suggest we use the gallon of water we have left wisely, while maybe digging for an artesian well or walking in the direction of where help may be coming from to meet the rescuers half way. Trust me, buying more houses now is not an answer.
Interesting analogy. I was just in the Rocky Mountains with 3 other people and when the water we brought to share was 3/4 gone about 1/3 into our trip, we started conserving while at the same time trying to remain optimistic. The two things can go hand in hand.
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