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Time: How Americans Spend Now: Thrift Nation
Sometimes we change because we want to: lose weight, go vegan, find God, get sober. But sometimes we change because we have no choice, and since this violates our manifest destiny to do as we please, it may take a while before we notice that those are often the changes we need to make most. We ran a good long road test of the premise that more is better: we built houses that could hold all our stuff but were too big to heat; we bought cars that could ferry a soccer team but were too big to park; we thought we were embracing the simple life by squeezing in a yoga class between working and shopping and took an extra job to pay for it all.
Now we’re stripping down and starting over. A platoon of TIME reporters and pollsters fanned out to every corner of the country to measure — anecdotally and empirically — what’s changed in the way we set our priorities and spend our money since the Great Recession began. Most people think the pain will be lasting and the effects permanent: only 12% expect economic recovery to begin within six months, half believe it will be another year or two, and 14% believe we are at the start of a long-term decline
(15 April 2009)
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When you’re flush, but acting flat broke
Michael S. Rosenwald, Washington Post via MSNBC
Even those whose jobs are safe are spending less, which holds down growth
… The frugality of the Kimberlins and Scanlons and millions of other Americans who still have their good jobs feed back on the economy, holding down growth and encouraging other worried workers to trim their spending — causing the whole vicious cycle to run another lap.
“It really can become and does become a self-fulfilling prophecy,” Denise Kimberlin said.
Economists say many still-flush consumers are handcuffed by psychological traps that cause them to tighten their purse strings even though economic hardship is not their reality. Underscoring the crucial role that consumer psychology will play in turning around the economy, President Obama and Federal Reserve Chairman Ben S. Bernanke have both been on the hustings this week sounding notes of optimism.
“Traditional economics assumes that we are all rational, that we approach these things very rationally, take in all the information, and then weight it and make a decision,” said Thomas Gilovich, a Cornell psychologist and co-director of the university’s Center for Behavioral Economics and Decision Research. “To a behavioral economist that seems clearly untrue.”
Denise Kimberlin said she began cutting back after the holidays, when at family gatherings and work parties she heard stories of people losing their jobs and people saving money around the edges. The stories made her wonder, “What if?”
These perceptions are reinforced by the blare of the news media.
(16 April 2009)
It’s a comment on the insanity of the media – this attempt to pathologize thrift and foresight. The U.S. needs to save and cut down on consumption, and yet all media reproach people for not consuming more. -BA
Economic survivalists take root
Judy Keen, USA TODAY
When the economy started to squeeze the Wojtowicz family, they gave up vacation cruises, restaurant meals, new clothes and high-tech toys to become 21st-century homesteaders.
Now Patrick Wojtowicz, 36, his wife Melissa, 37, and daughter Gabrielle, 15, raise pigs and chickens for food on 40 acres near Alma, Mich. They’re planning a garden and installing a wood furnace. They disconnected the satellite TV and radio, ditched their dishwasher and a big truck and started buying clothes at resale shops.
“As long as we can keep decreasing our bills, we can keep making less money,” Patrick says. “We’re not saying this is right for everybody, but it’s right for us.”
Hard times are creating economic survivalists such as the Wojtowicz family who are paring expenses by becoming more self-sufficient.
Reviving “almost lost” skills and preparing for tough days make people feel more in control, says Charlotte Richert, consumer sciences educator for Oklahoma State University’s Extension Service in Tulsa County.
(15 April 2009)
No cash? Barter for services with “dibits”
Marc Ramirez, Seattle Times
In a struggling economy, bartering is making a comeback, and Dibspace.com, a Seattle-based online marketplace, is riding the trend. Participating business owners create profiles and earn “dibits” by offering their services, then use those imaginary monetary units to purchase services from others.
(13 April 2009)