An Indulgent Recession

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Jul 16, 2005
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Does anyone think that Blackberrys, iPhones, iPods, iChargedItOnACreditCard, flat screen HDTVs, Blu-Ray, and all these other "gotta have its" are at least partially responsible for most people's financial issues? Let's face it, this is what's called an "indulgent recession". Is it just me or is there a new iPod or Crackberry that hits the shelves each month? Most people who buy these things don't realize they're actually just renting them since it'll be in the trash when the next generation comes out. Some will point fingers at a lack of unskilled labor, the government, subprime mortgages, and what not for their problems but the truth is, for most, it's THEIR spending habits that dug their own financial grave! I recently graduated college and in these past four years I've noticed a trend: the students complaining about the rising cost of tuition (and thus, 6-figure debt) are also those with the latest Crackberry, iPod, a Starbucks Iced Espresso in their hand, and of course a spring break trip to Cancun.
 
Joined
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Afghanistan
basically, the bankers have stolen our money. it's that simple. big-time theft of wealth has been taking place for the past 30 years or so. remember the golden rule: he who has the gold, makes the rules. and it's been going on, in spades.
 
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Joined
Aug 18, 2004
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 Originally Posted By: Captain_Klink
basically, the bankers have stolen our money. it's that simple. big-time theft of wealth has been taking place for the past 30 years or so. remember the golden rule: he who has the gold, makes the rules. and it's been going on, in spades.
So they held a gun to people as they maxed out their credit cards and bought houses they could not really afford???
 

Patman

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Guelph, Ontario
Just think about how much worse the recession would've been if people weren't buying all the latest gadgets though! I know that a lot of people have been buying things they can't afford and putting them on credit, but if everyone held off and didn't buy things until they had cash, then a lot less products would get sold and the economy would be even more worse off than it is now. So we can partially thank all the people who spend beyond their means, as they are the ones contributing to keep the economy somewhat afloat in these tough times. The bottom line is, for the economy to fully recover, people need to spend money on things! If everyone put their money in the bank and only bought the absolute essentials, we'd be in big trouble.
 
Joined
Jun 2, 2002
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I don't know whether I should feel ashamed of what I'm going to post or whether I should be proud of it. Through my life of living in a incredibly high consumption society (the good 'ol USA) I have chosen to walk a different path. I have actually been criticized for my lifestyle and told that it's people like myself that have caused the current recession. I have no cell phone, blackberry, i-pod, or whatever the latest gadget is. I don't subscribe to any cable TV, satellite, U-verse, whatever the lastest entertainment medium is going at the moment. I don't drive a vehicle that does more than I will ever ask of it. I don't use credit cards to supplement my income for ANYTHING. I've been called cheap, ignorant, lazy,, and even had my manhood questioned because I never chose to have children. What precisely have I done differently than my peers? I actually think about things that I do. I weigh the benefits and drawbacks to nearly everything I encounter in life. I have accumulated enough wealth to stop working today if I choose. That, however, would be a poor decision. As Chuck1986 posted, the folks today are going through this economic downturn with cell phones ringing, mocha java latte's in hand, and flight tickets to Cancun waiting for spring break. When it's all said and done, I am really no better off than those folks. I don't really feel more secure about my finances and they don't seem to really worry about theirs. They have more than I have, they drive nicer cars, live in nicer houses, eat out more often, etc. So who's really to say what is right or wrong? It all seems to be a matter of personality or upbringing. I blame my own generation for raising their children poorly. I have heard my own siblings state that they would never discipline their children the way they were disciplined. What's wrong with disciplining your children? When mom said to go out in the yard and get a switch,, you knew that you had made someone angry and you learned. I just hope that Aztec/Mayan/Inca calendar isn't too accurate come 2012.
 

JHZR2

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the reality is that a lot of people still make a lot of money and buy things. All the super-inflated homes on stupid credit vehicles caused much of it, but lots of people still make enough money to own the inflated-price homes and pay for them. Upside-down or not, the vast bulk of people are not getting foreclosed upon. Couple it up with a very regional issue... Where I live, for example, I have not seen home prices drop at all. They have stayed stagnant. That is far different than in FL, AZ, NV, etc., where prices were stupid high and had to be slammed. It is the combination of a lot of things that has created the situation. Lots of things that have come to bite us after a number of years. Stupid decisions and actions will always abound, and people as a whole will always partake in self-destructive behaviors...
 
Joined
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Ontario, Canada
 Originally Posted By: Chuck1986
I recently graduated college and in these past four years I've noticed a trend: the students complaining about the rising cost of tuition (and thus, 6-figure debt) are also those with the latest Crackberry, iPod, a Starbucks Iced Espresso in their hand, and of course a spring break trip to Cancun.
OPM - Our Parent's Money Those kids have been raised in a situation where the producers of wealth are disconnected from the consumers.
 
Joined
Jan 10, 2008
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Milwaukee, WI
I would be first to agree that poor spending habits have put a lot of people in bad positions, and that is a big part of the problems we have with our economy. But I agree with FowVay, "So who's really to say what is right or wrong?". It's America and I'm not going to tell other people how to use credit cards, or get up on my high horse because I have no credit card debt. It's nice to live beneath your means and save lots of money, but just keep in mind that you are indeed "living beneath your means"... quite literally having a lower standard of living for financial security that you probably won't really get anyway. Bankers have their role in it too, but as an enabler not a cause.
 

Kestas

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Jun 4, 2002
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The Motor City
I too don't have a cell phone. I get a lot of noise from other people when I tell them it's not a necessity, but another monthly expense that adds up. For most families it's another $100 per month, just to stay in touch and to know when everyone is coming home for dinner.
 
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I agree with what has been posted and would like to add: 1) companies that only care about executive pay and stock prices - not realizing that as we continue to outsource and offshore - there will be no one left to purchase their products and services 2) stockholders who are not happy with 5-7% returns. for decades people got along just fine with dow jones average returns but as of the dot com boom we always have to have inflated returns 3) unbalanced trade. trade with another country is fine - as long as it is balanced. over time, the "unbalanced" side of the scale will suffer a drop in the value of their currency. have you ever played monopoly? 4) I have certainly noted that (for the most part) those with the least amount of disposable income always have a cell phone, cable (with all the extras), video game ssystems, smokes and drinks. 5) I'll be running for president soon.
 
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Accurate observations. For point 1, in a micro level, a company is not concerned as it is out of their control if the populus has disposable income or not. They just want a larger chunk of what is there. Point 4 is probably related to the Maslow's hierarchy. There is always desirability to move up on the social ladder. having cell phones and stuff is their way of fitting in with the mainstream America. Nothing strange in that. And good luck with point 5.
 
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Immediate gratification begets greed begets bending the rules begets ingoring the rules = today. I'm surprised it didn't happen sooner.
 
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MI
Regarding Fowvay's situation, my father is like that, but to the extreme that it is OCD. If he gets outside his "comfort zone" it makes him very uneasy. What's his comfort zone? If he has to make an "extra, unnecessary" 100 mile trip in the month, he gets uncomfortable about the money spent on gas, vehicle wear, etc.. He values a financial security as described by Fowvay at the cost of seldom seeing his children and grandchildren, going on trips to enjoy things, etc.. But, that's his choice and not for me to judge. Moderation is the key. I.E., I have an excellent pay as you go cell phone plan. The phone cost $19 and my ANNUAL fees are about $80. It gets the job done.
 
Joined
Dec 1, 2005
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Surrey, BC
I'm more concerned that the folks who spent too much on their house/car/etc got bailed out, while folks who spent conservatively got... to spend their tax dollars bailing out the others. If there is no penalty for overextending yourself, you can bet people will. I don't much mind helping out the folks who got hit with an unexpected layoff due to the recession. Just not those who see credit cards as an unlimited money tree, without thinking there may be rainy days in the future.
 
Joined
Aug 5, 2002
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Silicon Valley
Maybe my neck of wood is a bit different. I don't think iPod, iPhone, flat screen TV, or even a new BMW/MB etc are the cause of the majority of our financial problem. True, those cost quite a few hundred a month for many people and are not necessity, but they are nothing.... compare to the rise in home prices and rent. People either got greedy when they see home price going up to 600k-800k each and get into the flipping game, or out bid each other for the fear that if they do not get a house right now, they will never get it. Then when the big collapse come, they are no longer able to afford the mortgage because they gamble and loss. Most of the Latte sipping, iPhone texting, flat screen TV watching, and BMW driving folks I know make their money the traditional way: salary + stocks, and have a house that they bough back in the low home price era (i.e. 10 years ago). They got lucky and catch the wave and ride through the peak of dot com boom, and cash out in time to enjoy life afterward. Some of them loss a lot of money when the stock collapse and have a huge amount of AMT to pay, but they "saw the light" because a couple hundred dollars a month is not going to make or break their budget when their mortgage is 3000-4000 a month, and they can afford it. Their property tax is 1/4 of what I pay, when their house is 2x my value, because they bought it early when the price is low. Their stock option is also 100x what mine was worth because they catch the wave in time and join a company when their stock price is low, hence their options is valuable. The way to get rich, according to them, is to find a company that has potential and join it when it is still small, and have good stock option. Hard work no longer pays off, and it is all about timing and gambling. If I were to blame, I blame Alan Greenspan for not seeing the inflation risk when it is all over the wall, and the last administration for the lax interest rate to hype up the economy to overheat, and the foreign government to boost our dollar value so we have more money to buy their outsourced stuff. People will spend money when they are around, and if they don't, the price of good/service will drop low enough that they will spend. The rise in home/stock price is because people aren't spending money on anything else and have extra money to invest, hoping that it will yield a good return, without realizing that the value of investment goes according to how much people in general have left over after their living expenses.
 
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