Yes folks, remember that YOU can help the economy by spending your stimulus checks on patterns, costumes and costuming supplies at Reconstructing History! (its what I plan to do (That is if my AC repairs do not eat the whole thing . . . )

Edited at 2008-05-05 01:51 pm (UTC)

Well I wasn't gonna say it... (but glad you did!)

PS -- Bob is gonna LOVE your icon. He was a professional brewer for five years. =)

I made the Icon from a picture I saw on CNN. Its not my idea, this was a guy's T-shirt but its brilliant.
Sad thing is, the article I took this from was over a year ago when the gas prices were a dollar less than they are now:)

have him send me a nice honey or lemon honey mead recipe!

Shoot me an email to bob AT planetbob DOT org.

I can help you end this mead crisis!

-Bob

Sadly, I can't "do things the way I normally do."

My family's gasoline budget has doubled in the last 6 months. We're driving less. When you're budgeted to the penny, and can't change most of your costs (day care, mortgage, utilities, etc. are all fixed), and meanwhile gasoline and groceries keep going up, consumer spending MUST slow down.

So yes, there will most likely be a recession, because the vast majority of people I know are just like me.

No. It won't. "Consumer Spending" doesn't care where the money comes from. It looks as raw data. If you spend 75% of your income on things -- gas, food, clothes, trips, whatever -- as long as you continue to spend 75% of your income on things (even if you stop going on trips and spend the budget on food and gas), your consumer spending has not changed.

And if this is true for the majority of the people you know, then that just proves my point -- the ratio of income to outgo will not change even if the makeup of outgo has.

So as long as you are spending the same dollar amount on things, consumer spending will not go down.

The economy doesn't give a damn about what sectors are rising and falling. It only responds to the Big Picture. As long as the Big Picture doesn't change, everything else will be poised to recover.

So don't be a pessimist and instead look at this as a "correction".

Yeah, but I'll admit that the summer will see some substantial hoarding of that gas budget. As teachers, we don't drive as much during the summer... and I'll be on maternity leave through December. But hey, we'll be buying diapers, which we aren't currently... I guess it will all even out in the end.

I'm not sure that most people have much of a choice about changing their spending habits. If you drive a car to work and don't have lots of excess spending money you have no choice but to change your spending habits.

We also need to remember that countries like France would be estatic with an unemployment rate of 5%.

See above. If you spend the same amount of your income, it doesn't matter on what you spend it. If gas is up so you can't spend as much on clothing, it doesn't matter as long as you spend the same amount overall. Consumer spending is an aggregate number. It's not specific.

It is a stupid STUPID time to put money in the bank. So don't. I mean, no more than you usually do anyway. That's why the Fed drops in the interest rate after all -- to discourage saving and encouraging spending.

Full employment is 3%. And that is a number you never want to get to because it doesn't encourage growth. The Japanese did in the late 80s and look what happened to their economy!

And for the State of Texas high oil prices are actually good because not only does it create jobs but we end up with huge budget surpluses every year. Which a good portion of goes to the legislature to spend time argueing trying to figure out what to do with it.

Heh heh heh. I remember when gas was 85c a gallon and your state was in some serious economic trouble.

If we hadn't had the oil glut in the early 90s and oil prices had kept up with inflation, we would be at $4 a gallon now anyway. This is actually natural for the price of oil compared to other things in the economy.

It sucks that it happened all at once, but it's not as bad as everyone is making it out to be. In the grand scheme of things, gasoline is still an incredibly inexpensive commodity.

I actually was living in San Angelo out in west Texas when oil prices hit their all time low and litterally in the period of about a month or two my appartment complex went from being full to being half empty because of the number of oil jobs that shut down.

I agree one of the reasons we think the price is so high was because it was abnormally low. I also think this sort of slow rise over the last couple years will end up being good for us in the long run because we are actually thinking about the issue in real time now instead of as a some day in the future we will need to look at way to more effectively use energy. Instead of it just being an issue that people who are greens are into buisness people have started to look at it and invest money in it because in the seeable future it will produce profits. Funny economics 101.

Oh yes. I agree. The rising cost of gasoline has made many people realise that they can't just fill up their SUVs and be completely irresponsible to the environment. That is definitely a good thing.

When i started driving gas was 26c *heehee* I had a big mercury station wagon 4 barrel carb all metal. We called it the battle star! I think it got 10 gallons to the mile.

I have a photo somewhere of the gas station near my house having 73cent gas, in the mid 90s. Thank you, Houston.

Here's the problem -- many Americans were spending more than their annual income, building up debt on their credit cards then paying those cards off by taking money out of their houses because, hey presto, the value of their homes had gone up. And then they got into debt again, thinking they could take more money out of their homes later on. I'm reading / hearing reports about how credit card companies are beginning to look at these folks and are cutting down on their access to credit. That means less money floating around overall.

Granted, those of us who have not done that, and who still have good jobs, are in decent shape and are still spending our paychecks, so the recession may be shallow and short. But I think there will still be one, while the economy adjusts to the reduced access to easy credit.

France's unemployment may be 8.2%, but their percentage of the population that is below the poverty line is only 5.1%.

By contrast, while the US's unemployment rate is 5.3%, our percentage of the population under the poverty line is 12%. Croatia, a country still riddled with landmines from a recent regional war, has fewer people under the poverty line than we do.

There really is no way I can continue things as I have, my spending on non-required things is going down and will continue to do so.

However, it is not the economy or price of gas causing me to change my spending habits. It's the 8 gallons of gas I will be using each day to commute to work (new job) and the second mortgage payment I will be paying on my second house.

This slump is actually allowing me to buy a new home while keeping my old one as a rental in a town natorious for its high prices on everything.

I do see how the price of everything is going to cause people to buy less in quantity, but I doubt they will decrease the actual amount of money being spent. American's don't save.

J

This is precisely the type of economy that we don't want Americans to start saving during. Saving will only hurt right now.

The fact that you can buy a new home is one of the good things that has come out of this situation. You see, there's always some sector that benefits. If you have the credit rating, housing is on sale everywhere! Banks want to make loans. They're just afraid of the risk. If you aren't a high risk, you're on easy street.

And as the economy recovers, you'll still have that new house with a mortgage with a record low interest rate. And you'll be in hog heaven then!

Feking bank...turned down our offer. House is in poor shape and they still want full price on a short sale.

Will be seeing them at the auction if we have not found another.

You know, all those anchors on whatever news station can't explain it as well as you can. Probably because you actually know the story behind it.

I like you posting about these kinds of things. It makes them more tangible, eaier to understand. You make it more personal.

Thanks! It's why I keep doing it. People told me it helps them, so I post. =)

The news anchors dont' make money by telling people to stay calm and that everything will be alright. They make money when people panic and have to watch the news all day.

It's weird, I once thought that I could become a journalist. Then some 3 years after 9-11 I realised that I would rather be one of the firemen running inside than the guy trying to get the desperate jumping people on tape while they fall to their deaths.
And now I work in IT.

I get the strange idea that journalist A interviews expert 1 on the state of the economy. Then perhaps, if it's a good journalist, he tries to find expert 2 who says something different. Journalist A writes it all down and hands it to journalist B, who is an anchor on TV and then tells both sides of the story to The Public.
Silly me. That's not how it works in real life!

Well, A, you would be a very good journalist and the reason I watch BBC News is that they attempt to do this. But most news programs (at least here in the US) make money on ratings. And ratings come from people jumping up and down and making a panic, not reporting the real story. The real story is often so much less exciting.

The economy goes up. The economy goes down. Merrill Lynch is cutting 4000 jobs. Funny how you never hear reports when Merrill Lynch adds 4000 jobs...

I'm still spending, but not as much on certain items like fabric and food. Patterns are still in my budget though. Maybe I can loose more weight cutting back on the junk food.

The Countess

Heh. I'm about to spend on some linen tape, I do think. ;)

Yeah, I support the beer industry and my local dojo, the rest is for bills and the occassional night out at the drive-in with th efamily or SCA event!!! Not much bbut change for the change bowl after that!!

Good! Support the businesses that are important for you. It will help them get through this tough time.

It's important in these kind of mass stress times to do fun things for you and your fammily.

With two teenaged boys any trip to the grocery store is an adventure these days! I noticed your both in some historical groups. Do you have trouble getting your teens to "dress" or are thes involved in other things? Thanx!

Oh hell no!. My kids LOVE IT! I started them when my oldest was 12-13. When he was about 15 i had a chance to pull him from school for an event and he did a demo on weapons. So he was teaching kids his age, younger, and older. He fell in love!

Both my boys where apprehensive about kilt wearing at 1st. But then they found out how much "girlz" love it. My daughter of course was around 9 so she could play "dress up".

My kids love the educational part and they do have roles and do speak to the public about what they should be doing as children of the time. They do not interpret in chary. Which is fine. If you can't pull it off, dont try.

We do both british isle 1600's right up to Minnesota Pioneer so the location and costuming changes but not the roles/station.

They become young rectuit soldiers, we did rat catchers one year and yes took the rat camping. They had fun with that telling the cook he had RATS in his kitchen. All but the youngest (he is 5 now) have been pump monkeys for the blacksmiths. For Fur trade the boys are Voyagers.

My daughter likes to be a bond servant. Or when she can hook up the wigwam crew and crashes with them.

I'm doing spinning dye demos and a womans role stuff.

The groups we do usually involve military so my boys can play with weapons. THAT is a big turn on for them. Pikes swords muskets cannons!

My 5 years old knows a musket and pike drill. He has wooden minis The groups that we started with love families and kids. The kids are treated with a great deal of respect until they blow it. So they get to be seen and heard, spoken to as humans and not runny nosed kids.

they enjoy the camp chores and the evening down time around campfires. Stories songs jokes. Plus no curfew. Just no leaving the historical at all ever. No going down to water without adults and never after dark! Storms rolling in, must check in ASAP and stay put if i say so!

In our camps it is so wonderful, the 17-18 year olds do run around like a pack of pups with the 11-12, 8-9, 5-6 year olds and PLAY together. Age does not matter where we go. It's all about attitude.

My kids see these as affordable vacations to new places with old friends and new friends to find.

It could not have worked out any better.

I have NEVER had issue with my kids hauling water, wood or cooking. My poor ex is frustrated in trying to keep up with their fun time with me. He just can't seem to do something they are as interested in. His camping days with them have bored them to tears unless it's hunting/camping. But resort camping they can not stand. Due to his disability he has to use a trailer or cabin. Not his fault. I guess the kids dont see it as much of an adventure. My oldest, now 24, seeks females who can do this as well.

They are addicted and now even get fussy about their garb material and WANT to go to the fabric store.

Some pics of them having fun can be found at myspace auntiekackie

Selling papers, mags and getting people to watch YOUR news station means selling drama.

You are so right. Being 3rd gen realestate family and having been in realestate for 24 years I have seen this before.

Much like the 80's, remember that one. Realeastate investors commiting suicide because there was nothing else they could do. I recall developer offered financing on new construction being at 11% on a 30 year loan.

It was a mess. The media has convinced the population to hold their money close because of a turbulant election. gas prices are coming up to the cost of living. people are thinking min wage jobs are enough to support family when they are ment to sustain single people college kids or highschool kids.

To make this economy move, people must continue on allowing money to trade while being wise.

Stop blaming the President. He didnt do this. In fact income taxes are nearly less than 1/2 during Clinton years.

The media is EVIL.

The sky is not falling. Just hang in there, make wise spending choices.

If things are tight for you and you are afraid, maybe since it's spring, budget your house a bit differently to get through this by adding a sandwich night to the menue. Plant a garden to save some money this summer on your groceries. Simple changes like this can free up some funds for you to still go to a movie, afford gas for a vacation.

The sky is not falling. Just hang in there, make wise spending choices.

Precisely!

Hard not to change the way you live when the price of food and gas are skyrocketing and your income isn't...

Read, Laurensa. You're not comprehending what I'm saying.

I am, though.

We already don't buy anything extra. With the prices of food and gas going up, we are struggling to survive--not just not going out to the movies. I'm talking shifting money each month to make sure the rent, the car payment, and the utilities get paid and the kids get fed. Get my teeth fixed? Get the kids new clothes for summer? Ain't happening.

I'm not panicking. We will get through, somehow, some way. It's hard to remember that sometimes when you're literally counting pennies to buy milk.

The only thing I've changed is my driving habits- no more 2 hr drives to go to a costume event or fabric shopping. Everything has to be within an hour. &*@#%$! gas companies!!

Sure, blame the energy companies. Easy to go there, even though it's totally the wrong place to put the blame.

Blame your government - at every level.

Why? One reason: fuel is taxed from the Feds all the way down to the municipality in which the pump is located. They all get their slice of the pie. If you were to remove those taxes, you'd think you warped back to 1980.

Also, as was noted above, the price of fuel was artificially low for decades. While the rest of the world was paying $4 per liter for petrol, we were paying $1 per gallon. In part that was due to political and economic pressure applied to the oil states; in larger part, it was due to an extremely strong dollar. The dollar is the instrument in which oil trading takes place. Now, combine a falling dollar, serious recognition of the finite nature of supply, and mild inflation in the US economy - stir, bake at 400degF, and you get $4 per gallon gasoline in the USA.

What I'm getting at is that pointing the finger at oil company executives and yelling, "You bastards!" is too convenient. It's not as though there was a conference call to the other Illuminati, where Dubyah said, "Hey, I gotta idear; let's jack up the price of light sweet crude," they all laughed, lit cigars and congratulated themselves on making bajillions.

They're not making bajillions because you're paying $4 per gallon. They're making bajillions because they're selling a product that everyone needs that's seen a sharp spike in perceived value. It's seen a sharp spike in perceived value because the free market - yeah, that's right, the free market, not executives in Big Oil - decided collectively through trading that a 44-US-gallon barrel of light, sweet crude oil was worth $100+. Besides, most of the bajillions come from other parts of their widely-diversified conglomerate empires that are more highly profitable.

(Side note: Gasoline is not profitable. Here are the basics; use your own calculator if you don't believe me. Oil is 44 US gallons per barrel. As of today, the price of a barrel of light, sweet crude is $US124.73. Total taxes on a gallon of gasoline are, on average in Pennsylvania, 68 cents. That makes a </b>wholesale</b> price for my fuel of $3.51 per gallon! I paid within a dime of that yesterday for 9 gallons. Ninety cents does add up, but not when you consider R&D, facility development, salaries, yadda yadda yadda. In short, we should be paying MORE.)

Of course, it's easy for me; I walk to work. But I really do get sick of the mobs screaming for the blood of people who don't deserve the torch-and-pitchfork treatment.

Mu husband and I just moved closer to work in order to save $$ on gas and wear and tear on the cars. However, we're trying to keep up our normal SCA schedule by carpooling. We save a few bucks and get to hang out with friends.

It seems counterintuitive, but spending money is what has gotten us out of all our previous economic downturns.

Question: what happens if people continue to be scared and consumer confidence continues to worsen. Are we looking at a recession or possibly a depression? How do you protect yourself against that? Gold?

Edited at 2008-05-05 09:12 pm (UTC)

Well, the reason the Great Depression happened is precisely because people stopped spending. Of course the reason they stopped spending is because no one had a job. You see, there was no unemployment insurance, no welfare, no "safety net" to help people through tough times. So all people could do is stop spending. And that's the worst thing that they could do. That is why the Depression lasted for 10 years -- there was nothing that could stimulate the economy.

It's not coincidence that the old term for a Depression was a "Panic". It's people panicking that creates it.

Today, we have government programs and safeties to make sure nothing like that ever happens again. The worst that can happen now is a recession. And if your job is secure, you really have nothing at all to worry about.

(Buy gold when we're in an expanding economy.)

This will make you happy... I took my economic stimulus payment and spent every last cent of it and even more on a new riding lawnmower. Huzzah!

People don't realize that one of the worst things you can do is freak out and drastically change your behavior. Sure, you probably shouldn't go out and buy a $50k car tomorrow, but as far as spending normally? With slight adjustment, you should be fine. It was these sudden, drastic market changes that really helped the depression to be as bad as it was.

By the way, I found your journal via needledriver, and you seem pretty neat. Any interest in being LJ friends? If you want to get a feel for me, my profile is a good place to start.