The overhaul of bad economic news has flooded my veins with pessimism. In light of this, let’s take a minute to reflect on the rainbows shining through the stormy clouds. Success is a terrible teacher; you learn much more from catastrophe. Here are a few positive trends resulting from the letdown of 2008.
1. Savings. Consumer spending fell for a record 6th straight month in December. Though we are only saving a measly 3.6% after taxes, things are moving in the right direction. We are being more realistic in terms of what we can/cannot afford. It is hurting retailers, but in the long-run will lead to a more balanced and sustainable economy. Hopefully the savings trend will help to shift more and more of our economic output away from spending and more towards private investment and exports.
2. Opportunity. There have only been a handful of 40% yearly drops in our stock market. Problems continue to persist, but for young investors, this is one of our first opportunities to invest in a severely depressed market, cheap by most common valuation methods. Money is made much easier by buying at the bottom, right? No one really knows where the bottom is, but surely we are closer today than we were a year ago.
3. Bargain Hunting. Has anyone else been able to negotiate a slue of items that usually aren’t negotiable? Dental bills, transmission flushes, even standard prices on retail goods—buyers certainly have the upper hand. If you’ve held on to your frugal ways throughout this crisis, you are probably in a good position to take advantage of the “hangin’ on by a thread” blowout sales common in most retail stores.
4. Perceptions/habits changed. Do you find yourself cutting more coupons? Recycling? Driving less? Thinking about ways to get more MPGs? Considering scrapping the gas-guzzler? The general populace has woken up from its spending slumber. Even as fuel prices plummeted, I found myself consolidating trips and scrubbing that dirt off my car to get a bit more mileage. The combustible calamity of last summer has permeated through the American epidermis--most people understand that an American energy solution is paramount, regardless of how cheap liquid gold gets.
5. Better Americans. For whatever reason, from media hype to a re-awakened interest in politics, Americans have become more involved in the democratic process. Increased scrutiny by the media has its negatives, but it helps to hold our president and his tax-dodging appointed officials accountable. Politifact.com is tracking progress on over 500 promises Obama made throughout his presidential campaign. Though interest may be waning a bit post-election, Americans seem more in tune to the decisions our government is making on our behalf.