Economy better, but return of conspicuous consumption is not good news
I know it doesn't make sense -- I myself have been so underemployed these last two years it makes me nostalgic for the soul-sucking sales job I hated so much I wanted to chew off my arm to get out. (It turns out all those relatives who lived through the Depression were right -- that was a good, steady job.) So you'd think I'd be sending love notes to Timothy Geithner at the news of unemployment holding steady at 9.7% while retail sales increase.
But those unemployment stats don't take into account the estimated 2 million jobless who've just given up and who could raise the rate once they start looking again. Meanwhile, in five California counties, the unemployment rate is higher than 20%.
I'm not trying to harsh anyone's mellow, but I am worried. Because now that the U.S. is once again minting more millionaires, it appears conspicuous consumption is back in style. Already the fine art market is coming back, as witnessed by an anonymous buyer paying a record $104.3 million for a very skinny statue by Alberto Giacometti.
Sales of private jets are up, up and away. And in Missouri, Kansas City is closing 29 schools while the state government continues to subsidize sales of yachts, which is ironic when you consider the state motto translates to "Let the welfare of the people be the supreme law." Or not.
So what's wrong with more millionaires? Particularly if they're throwing their money around, which will stimulate jobs, assuming you sell jet, yachts or skinny statues. What's wrong is that the recession obviously hasn't been long or difficult enough for most Americans to learn our lesson. The Great Depression shaped the Greatest Generation's values, leading to what may have been the zenith of America's power and prestige. Today, as America spirals into a fathomless debt, Americans themselves are following the country right down the drain.
Consider this: a recent study showed that 43% of Americans have less than $10,000 saved for retirement, while 54% have less than $25,000. With the aging of Boomers, the largest demographic in the history of humankind, that's 97% of our retirees living on Top Ramen and Alpo. The generation that was supposed to change the world definitely will as they bankrupt Social Security, Medicare and pretty much life as we know it.
As a Gen Xer, however, I hold out hope for the Boomer's children, the Boomerangs. Second only to their parents in their sense of entitlement, the offspring of the Me Generation may still seem consumed with being the Look at Me Generation, but continual unemployment and no social safety net will eventually get them to start saving their money -- and with it, our country's future.
And that, my friends, is The Upside.