Getting Back to Basics

So far, this blog is probably giving the impression that my idea of getting back to basics is entirely about scolding people to change their way of thinking. Not so. I practice what I preach, but I admit that I had a great head start, growing up the oldest of four kids, with a father who was usually working one or two side jobs to supplement his teacher’s salary. We had our own home, thanks to the G. I. Bill, but there was rarely any money left over from meeting basic needs, so I learned to pinch pennies very early on.

For some reason, growing up comparatively poor rarely bothered me. Maybe it was because television advertising hadn’t yet created a culture of conspicuous consumption for the average person. Spending money on expensive non-essentials was still mainly for the wealthy. And it probably helped that I was an introverted loner who spent enough time observing my school mates to realize that I didn’t want to be like them.

Being able to make my own clothes was a matter of pride, and having a father who was crazy about gardening and horticulture meant that I learned a lot without even knowing that I was learning anything. Both of those areas of knowledge served me well over the years, along with the many skills that I picke up, sometimes from necessity, but mostly because learning to do for myself was always an interesting and worthwhile challenge.

All of that means that I’ve always felt kind of sorry for people who can pay other people to do things for them. They don’t have the pleasure of a job well done, or pride in knowing how to do something that takes skill and effort. But pity has given way to dismay with the realization that a country full of people who don’t know how to do anything for themselves except the job that they’re paid for is a country in trouble when the economy slips more than a notch or two. That’s what we have today: a country in trouble.

So scolding, and nudging people to think, has to be a good part of what this blog is about. But there’s no point getting you to think and then not offering any ideas about what the next steps might be. Lots of folks are feeling pretty wobbly these days, and need a helping hand till they’re steady on their feet. That’s what I want this blog to be — a helping hand.

The American middle class has been experiencing downward mobility for some time, but it’s been somewhat disguised. The slow creep upward of goods and services has almost, but not quite, been matched by pay increases. Overall, the value of income has been going down fairly steadily, but now, with a sharp rise in prices, mortgage foreclosures and job losses, the truth is hard to miss. The American dream: steady upward mobility, a home of your own, sending the kids to college, and the hope that they will do better than their parents, has exploded into dust.

There may be some comfort in looking around and seeing that most people are in the same boat, but there is also resentment and indignation. “Why did this happen to me? Why should I have to give up so much of what I’ve worked hard for?” Those feelings are natural, but they can get in the way of examining your values and needs, and making changes that can minimize the negative side of lower expectations. It’s a hard blow when your hopes and dreams prove the truth of the old adage: what goes up must come down. Your future depends on how you deal with it.

It doesn’t matter whether you believe climate change is man-made or natural. It doesn’t even matter if you think the whole climate change/global warming issue is a hoax. There is evidence from every part of the world that serious changes are taking place, much of it in places that we never hear about. From the Himalayas, where unprecedented melting of the snow pack has been reported for well over a decade by the native inhabitants, to the disappearance of plant species at Walden Pond, something is happening that has nothing to do with politics or conspiracies.

Plants are on the move to more favorable areas as their environment becomes too hot or dry. Flowers are blooming earlier in response to unusual warmth. Animals are changing their mating and migration patterns. Species of amphibians are in danger of extinction from diseases that are flourishing with the change of climate. These are not just single events, but trends that are being carefully tracked over years and decades.

In hundreds of ways, environmental disaster is creeping in on us in the background, and sooner or later the financial concerns and environmental concerns will merge. The problems that the average person is dealing with on a daily basis already have more to do with the environment than with the financial meltdown. The rising prices of food and other commodities are a function of the costs of energy (transportation), of drought, and of climate shifts that are decimating growing areas and species.

Small changes taking place over time add up. We have to think beyond whether global change is real or whether we can stop it by our actions. Garbage is garbage, whether it’s in landfills, floating in the ocean, or contaminating our food and air, or high in the atmosphere. We each contribute to it, and we can each reduce the accumulation and its impact on our lives and on the earth.

Polar bears have become a recognizable symbol of climate change, but polar bears don’t live in our backyards, and don’t really convey the message that we are also being affected by climate change. Polar bears are merely a symptom; for the causes, we need to look in our own backyards.

Shoppers are flocking to thrift stores, families with teens are learning how to say “no,” to requests for the latest and shiniest toys, and drivers are discovering the (sometimes dubious) joys of public transportation. But will all this economizing last? Is frugality just another temporary necessity that people will gladly give up when (and if) things return to normal?

The environmental movement isn’t much of a presence these days, even though green living is a buzzword that’s often in the news. When financial survival is a priority, there’s going to be more concern for financial than environmental solutions. This means that green living and frugality aren’t translating into the environmental consciousness of the 70s and 80s. Saving the earth seems far less important than saving ourselves. For the average person, just getting through this economic crisis is about all they can deal with.

On a larger stage, though, this can be a short-sighted mistake that will have eventually have serious consequences. A news report in Wired indicates that investment in green projects is slowing down because money is so tight. “’The general economic slowdown is taking everybody’s eyes off what was an increasing momentum around concerns of climate change and the cost of energy,’ said Paul Maeder, a general partner with venture capital firm Highland Capital Partners.”

The current drop in the cost of oil (which is probably temporary) is also contributing to decreasing interest in long-term energy projects. The danger is that, companies that are developing these projects may well go out of business, just when they are badly needed. It’s happened before, and is one of the reasons why technological advances in energy production have been few and far between over the last few decades.

Taking care of today’s problems may be the top priority, but we also need to keep an eye on the consequences of ignoring long-term problems and solutions. It’s difficult to absorb the idea that, in the long run, saving the earth is a requirement for saving ourselves, but it’s just as important for individuals as it is for corporations, governments, and investors.

Behind the headlines about banks and bailouts are the doings of the ordinary people who are most affected by tight money. Cutting back is a rock that ripples throughout the pond, and the ripples are beginning to make the news.

Thrift stores doing well and worrying

A New York Times article about boom times for thrift stores reveals that while more people are shopping at thrifts, the new frugality is also a problem. “…the same economic woes that are sending buyers their way are causing donors to hand over fewer items, so that many stores are running low on inventory.” Long-time thrift store patrons probably never imagined a day when their favorite shopping spots might run out of stock. But thrift stores depend on donations, and when too many people have second thoughts about giving away perfectly good clothing, the shelves and racks are going to empty out.

Where do the clothes go if they’re not going to the Salvation Army, Goodwill, and other thrifts? They’re either staying in the closet a bit longer, or replenishing thin wallets when they’re sold on eBay and Craigslist. Don’t wait too long to do your thrift store Christmas shopping.

What’s the matter with kids today?

Instead of putting beans in their ears, they’re more likely to have their fingers in their ears, refusing to listen to parents say “no” to their requests for the latest toys or most popular brands of clothes. According to another New York Times article , the more affluent the family, the bigger the shock when teens find that they’re included in the family retrenching.

Most teens have little concept of where their family’s money comes from, or where it goes. They just know that they can usually have whatever they ask for. Worst of all, most of them have never worked and don’t know how to manage the money they’re given or the credit and debit cards they’ve been using so freely.

The family dramas are tough on both parents and children, and the battles are going on all over the country. Welcome to the real world, kids.

On the road

Finally, we learn that the sky-high cost of gas last summer had benefits and costs. According to MarketWatch , Americans drove 15 billion fewer miles in August than they did in August of 2007. And now that prices have dropped, they’re still hopping onto public transportation in record numbers. That’s a huge savings in gasoline consumption, and it probably reduced air pollution in urban areas, but there’s also a downside. Highway and bridge projects depend on gasoline taxes, and when people are driving less, there’s less income for those projects. Secretary of Transportation Mary Peters says that’s a problem, but she’s also aware that gas taxes aren’t necessarily to best way to fund anything. ” ‘We pay for transit the same way we pay for road and bridge projects — with federal gas taxes,’ she said. ‘Relying on the gas tax is like relying on cardboard to keep the rain out — the longer you use it the less it works.’ “

Every so often I take a look at Seth Godin’s marketing blog. Marketing isn’t a subject I’m wildly interested in, but Godin always places his posts squarely in a context that makes them meaningful even for those of us who have nothing to sell. If you’re not familiar with him, he’s a respected marketing guru and the founder of Squidoo, a content site which was roundly booed by many analysts at its inception. In spite of all the predictions of its certain failure, it’s been incredibly successful.

Godin’s latest post, The Sad Truth About Marketing Shortcuts , is about building solid foundations vs going for the short-term money. Squidoo allows its lens masters to designate part or all of their profits for charities of their choice. Some people set up Squidoo lenses specifically to support charities, apparently quite successfully. The site eventually distributed $80,000.00, and Godin tells us how some of the charities responded.

“Do you know what they wanted to know? “When was the next time we can rally a lot of people to get more votes and donations?” Do you know what not one of them asked? “How can we get our supporters to actually lay some groundwork so we can make this sort of money every week?

“It made me sad that so many non-profits have precisely the same mantra. Rush to the easy money, then look for more and rush after that.” It’s the same mentality that helped bring down the American economy.

Godin goes on to talk about the thousands of Squidoo lenses that are started, most of them soon abandoned by their creators. “But,” he says, “a few stick it out and many earn $2,000 or more a month in their spare time (for themselves or for charity). The difference is clear but sad. The shortcut didn’t work right away, so they’re off to the next thing.”

When your life is in disarray and in danger of falling apart, the worst thing you can do is go rushing off in all directions, without any clear idea of what any one action is supposed to accomplish. There are always things that have to be taken care of immediately — the short-term goals — but to get your life under control, you need to distinguish between short-short solutions to problems, and long-term plans that will prevent those problems from recurring, or that will at least allow you to have some control over their impact if they do recur. You have to build a foundation that will support you and minimize the effects of economic fluctuations, including job loss. And the only way to do that is to know what your goals are and which ones are most important for the long run.

Getting back to basics in almost any area of life should be a fairly straightforward process. But it usually isn’t. Take something as relatively uncomplicated as switching from pre-cooked foods to homemade foods. Making the change means that you have to know how to cook. But when you have a couple of generations of people who’ve grown up heating food in the microwave, or adding a few ingredients to boxed mixes, cooking skills are in short supply. So cookbooks come into the picture. And food items that you have to learn how to use — spices and herbs, baking powder, oils, etc. Tools to cook with — pots, pans, measuring spoons. Where do you start? What are the basic essentials?

If getting back to something as simple as real cooking is so difficult, how do we retreat from a serious mess like the current wave of mortgage defaults? It’s easy to lay the blame at the feet of lenders, but we need to ask why they managed to get away with the tactics that led people into desperate financial binds. Should we transfer the blame to all those gullible people who believed that the interest on their variable-rate mortgages would either stay level or go down? Who believed that their income would always expand to meet expenses. Who didn’t understand their credit card statements well enough to see the warning signs that said “you’re overextended.”

We need to go much further back if we’re going to lay blame or, preferably, determine the causes for a population which can’t cook and which doesn’t know when they’re being financially bamboozled. We need to go back to the schools, which were charged with educating students for the real world. And then back to the system that educated the teachers.

Blame may make us feel good, but it doesn’t do anything to change the situation. We need to understand how we got where we are. Once we know that, we can start thinking about how to bring about the necessary changes.

When the economy is expanding, people have more discretionary income to spend, with two results: 1. They become accustomed to having items that were once considered luxuries, and those items slowly become necessities. 2. Product lines become more diversified, with pricier and more exotic choices being offered.

The diversification and expansion of product lines is both a response to and a cause of consumers’ desire for variety. But it also supports consumption as a social game, which makes me wonder why the once-popular term “conspicuous consumption” hasn’t been revived. The purchase (and display) of expensive items has always been one of the perks of wealth; now it’s accessible to anyone with the price of a chocolate bar or a fancy brand of tea or coffee.

The interesting question is: what will happen to people’s psyches and to the market as tightening budgets translate to tightening wallets? When you realize that the daily latte from Starbucks is costing you close to $100.00 a month, the decision to cut back and the pain of withdrawal can have both psychological and social effects. Walking into the office with a thermos of coffee brewed at home, rather than a tall cup of almond-mocha-licorice-mint latte from Starbucks can be either a statement of independence from gustatory fashion or a shamefull confession of financial difficulties.

The amount of shelf space devoted to unusual and expensive teas and coffees, and the aisles of organic foods, complete with a dozen varieties of tofu, will undoubtedly start shrinking. Purveyors of one-of-a-kind non-essentials will have to scramble to cope with a changing marketplace. And the very rich, whose difficulties consist of having to cut back on the size of their next boat purchase, will have the social prestige of mindless spending all to themselves again.