September 2008
With the entire country in dire financial turmoil this week, I’ve been fighting my own great depression with the quintessential American pastime: shopping!
Well, sort of. I didn’t go on any kind of wild spree, nor was I shopping just for shopping’s sake; we’ve had a few months to grow our home-improvement fund since our last big remodeling outlay, and so I made a list of the next steps I want to take. It’s a longish list that includes some cleaning and organizing, some remodeling and landscaping, and some things to purchase or replace. Most of the shopping (like pricing attic insulation, or careful selection of litter box scoops) makes for less-than-fascinating blog fodder, but I’ll share a couple of exceptions.
Last Saturday I made a trip down to what might be Seattle’s best little shopping secret: the Pacific Coast Feather outlet store. You almost have to hear about it through word of mouth, as it’s not even mentioned on Pacific Coast’s own web site, much less advertised anywhere else. It’s a factory outlet in the original sense of the term: there’s just one, right next to the factory, and it holds mostly overstocks and discontinued items, occasionally seconds. (You may not know — I didn’t for a long time — but most ‘outlet stores’ in malls carry predominantly items specially made for those outlets, of cheaper materials and manufacture than regular merchandise from the same company.)
The PCF outlet is a bare-bones shopping experience, just a warehouse with some industrial tables, bins, and shelving piled with feathery bedding. Available stock varies: sheet and pillowcase options can be sparse; you’ll have the best luck with pillows and comforters. I expected to get a basic white down comforter but was happy to find a chambray stripe instead. I also picked up two of my favorite pillows, the ones with a feather core surrounded with down on all sides. Then I had to resist the urge to add a feather bed to my haul. Bargains can be a slippery slope! But I’m consciously keeping a tight rein on unplanned purchases.
Next up was replacing our dishes. We have some plastic Ikea kid dishes, some Ikea stoneware that Jak picked out before we were living together, and a twelve-place stoneware set that his mom gave us a few years ago. I’ve lived with them so far for reasons of frugality, but the frustrations include:
- the table settings don’t fit our lifestyle: we have way too many large plates and never enough bowls;
- the large plates of the better set are ginormous (12.5″ diameter) and don’t fit in standard cabinets or the dishwasher …
- … nor do they help with portion control!
- various pieces of both are scratched, chipped, or broken and missing altogether;
- the better set doesn’t include any serving pieces, and is impossible to match;
- and while I can imagine many less attractive options, these aren’t my preferred style.
I’ve never really shopped for good dishes before, so I was appalled to discover that ordinary stoneware typically runs $10 to $12 per bowl or plate! We’re not talking fine china here, yeesh. I wasn’t ready to drop $400 on new dishes, so I kept looking for a cheaper option.
Outlet store? I remembered there was a Mikasa at a nearby outlet mall (for loose values of ‘nearby’ — actually about 30 miles away). But when I looked it up, I discovered that Mikasa had closed all its retail stores and gone web-only. Thank goodness I didn’t just drive out there.
I’ll spare you the rest of the dead ends and just skip to the finale: I did eventually find two real bargains that fit our needs. For cheap daily dishes I ended up in Corelle’s online clearance section, where I bought 8 bowls ($1.19) and 8 ‘luncheon’ plates ($1.49). Corelle isn’t my idea of ’stylish’ but it’s nicer than plastic, lightweight, easy to clean, and virtually indestructible — a good choice for the kids and our informal lunches and snacks.
I had nearly despaired of getting a nice dinnerware set I both liked and could afford before I finally found the clearance section at Pfaltzgraff. They have a surprisingly large selection of discontinued patterns, both sets and open stock, for as little as $2 and $3 apiece.
I found a style from last year that Jak and I both liked, and selected ten each of the bowls, small plates, and dinner plates, plus six mugs, two serving bowls, one serving tray, and a coordinating decorative bowl and urn. (We can only seat eight, but I got extra plates and bowls in case of future breakage; with a discontinued pattern I assume replacements will be hard to come by.) Total price: $126. Then, icing on the cake: my usual online coupon search got me an extra $25 off; after tax and shipping (dishes are heavy!) the grand total was $134.
I confess that the decorative bowl and urn were impulse purchases not on the original shopping list, but I judged them to be well worth the extra $16 or so. We sorely need some decoration around our house; I’ve just been too focused on the functional basics to go looking for any.
And while yes, I know that shopping is not a cure for depression — either mine or the economy’s — sometimes new things do make me happy, especially when they directly improve my daily environment. I love snuggling up in bed with the new comforter and fluffy pillows. I expect the Pfaltzgraff, when it arrives, to make cooking and serving dinner more enjoyable and cleaning up afterward less of a frustration. Heck, I’m even a little bit pleased to have a better litter scoop!
I’m glad (and a little amazed) that we have enough money right now that we can selectively upgrade for attractiveness and better functionality. It’s a nice feeling.
(Photo by pillowhead designs.)
Okay, so we’re all worried about the economy right now, for obvious reasons. And because it’s a Presidential election year, we’re hearing the usual promises from both candidates about how their administrations will improve it. There’s a lot of discussion about whether Obama or McCain will be better — for the national economy as a whole, or for a particular economic segment of the population.
Not many people, however, seem to be questioning the basic concept that the occupant of the Oval Office can even have a significant impact on the national economy. I’ve long harbored a suspicion that Presidents are taking too much credit for the good times and too much blame for the bad. So I’ve been looking around to see how much leverage professional economists believe the President actually has.
In an essay on exactly this topic from the last Presidential election season, professor Russell Roberts points out “two strange assumptions” implicit in these discussions:
The first is that the President “runs” the economy. The President hardly even runs the government. He certainly cannot direct the fortunes and failures of millions of workers, managers, investors and entrepreneurs.
The second implicit assumption is that the success or failure of the President depends on his ability to “stimulate” the economy, as if the economy were an engine that simply needed a different setting for its carburetor.
Roberts illustrates the silliness of trying to control the national economy with tax cuts and stimulus payments with a parable of a boy dipping water from the deep end of the pool and pouring it into the shallow end. I liked this, because it exactly illustrates my problem with the $600 check I received in the mail this summer.
(On the other hand, spending untold billions of dollars on the Iraq war has always seemed to me a lot like dipping water out of the pool and dumping it out in the middle of the desert. Perhaps I just lack a global perspective?)
On a similar note back in February, economics professor Tyler Cowen wrote in the New York Times that, “The public this year will probably not vote itself into a much better or even much different economic policy… It is already too late to stop an economic downturn.” The reasons are varied, but seem to boil down to two points:
- The globalized economy limits the changes any one country, even a very powerful one, can make on its own.
- Most of our economic policies and strategies are entrenched beyond the ability of our current legislative and political systems to reform them. “Democracy is a blunt instrument,” reminds Cowen. (Ouch.)
Newsweek weighs in with a quote from Thomas E. Mann, senior fellow at the Brookings Institution. “[The President's] influence on the short-term macro economy is generally overestimated by voters.”
- In the short term, it may be a lot easier to do harm than good. Newsweek lists “notable [Presidential] policies that inflicted short-term damage” in the administrations of Jefferson, Grant, and Hoover.
- But most factors that influence the business cycle –”the end of the Cold War, the deflationary influence of an emerging China, the Internet … commodity inflation, a housing bubble and a weak dollar engineered by the Federal Reserve’s promiscuous policies, the demand-driven surge in oil” — would have occurred regardless of which person or party is in power.
On to Time Magazine, which noted that “The bigger issue for voters to wrestle with is … what the next President can do to the economy. Usually it’s not so much. But every once in a while, like when Franklin Delano Roosevelt was elected in 1932 and Reagan in 1980, the effect can be dramatic.” Cowen agrees: “The New Deal brought about a revolution in economic policy — but those were special circumstances.”
Are we in ’special circumstances’ once again? Not yet. Compared with 1932, 2008 is still looking pretty rosy. Could we wind up there eventually — next year, or the year after that? Answer hazy, try again later.
After all this reading, I’ve come away with four points of general agreement:
- There are no short-term solutions. The economy is an ocean liner, not a speedboat; course corrections take time.
- Rearranging resources is never the answer. Government ’stimulus’ doesn’t work because the resources used to do the stimulating are just water from the other end of the pool.
- A President may subtly set the tone of his administration but in most cases his direct power is limited at best. Congress and the Federal Reserve both have a greater effect on economic policy.
- The most important economic role of the President may be the ability to impact the mood of the citizenry in general. Franklin Roosevelt famously restored public confidence with the first of his “Fireside Chats”, halting the run on deposits that had flattened the entire banking system.
Newsweek again:
The most troublesome economic data points aren’t necessarily the rising unemployment rate and plunging home prices. Rather, they’re the miserable consumer-confidence numbers, which have hit a 16-year-low, and the high percentage of Americans who believe the nation is on the wrong track.
I could use a little clear, plainspoken communication right about now — what about you?
Sources:
Presidential Economics: What Leaders Can and Cannot Do about the State of the Economy, The Library of Economics and Liberty
It’s an Election, Not a Revolution, New York Times
Why the President Can’t Fix the Economy, Newsweek
The New President’s Economy Problem, Time Magazine
A job-matching site which has my resumé on file just emailed me an alert about a new position for which I was supposedly a near-perfect match. I dutifully clicked through and started reading. Job description sounded good, and then I got to the ‘About the Company’ section:
Seattle — home to gourmet coffee, grunge, and thrift banking. Washington Mutual (WaMu), the largest thrift in the US, offers traditional consumer and commercial banking services, including deposit accounts, mortgages and other loans, securities brokerage, and the WM family of mutual funds, through about 2,200 bank branches in the West as well as New York and Connecticut, and nearly another 500 loan offices nationwide. It is one of the largest originators and servicers of residential mortgages in the US, in part through subsidiary Long Beach Mortgage, which offers subprime loans. However, the bank is exiting the subprime business.
Gotta love that disclaimer at the end. Really, if I were to change jobs now it would be out of the financial industry altogether, not from a relatively stable bank to … yeah.
WaMu, you can have my savings for as long as I don’t need it, but I draw the line at my paycheck. Sorry.
Sorry for the recent silence; I’ve been having a rough couple of weeks on the Life front. No financial crises, though, at least not yet! Thanks for all the recent comments — it cheers me up to see so many people reading.
This week got off to an interesting start for us with the early-buzzard circling of Washington Mutual. WaMu has been my primary bank for over a decade, and currently holds all of our liquid assets — currently around $30,000 in checking and savings.
Now, all of that money is covered by FDIC insurance, so I’m not worried about a possible bank failure costing me money in the long run. But what about the short run?
Marc Hedlund posted to the Wesabe blog Wheaties for Your Wallet yesterday with an explanation for “What happens to your money if your bank closes?”. Most of it is based on the experiences of one NetBank customer who reported a delay of two to three weeks before he had access to his money after the FDIC shut NetBank down.
This was … alarming, in our circumstance. But it didn’t match what I remembered hearing from my friend Stacy, also a NetBank checking customer when it folded. To be certain, I phoned her up and grilled her on her post-closure financial access. Here’s what she said:
- She never lost access to her money. Debit cards continued to work uninterrupted for purchases and at ATMs.
- She lost online account access for two days, over the weekend. By Monday morning everything was available online again. In the interim, phone support and balance queries remained functional.
I have no idea why her experience was so different from Wesabe’s informant, but that’s an almost unnoticable blip in service. I’ve been more inconvenienced by Comcast going on the fritz.
So I’m not going to rush off and open up a new non-WaMu checking account for bet-hedging purposes. But I think I will be making one other change …
Yesterday I heard an interview on NPR’s All Things Considered with Hurricane Ike refugees in Houston. I was struck particularly by two things: one, that stores in Houston were running out of food. Wha? I mean, it’s not Manhattan Island here, we’re talking about one of the great highway hubs of the nation, and they can’t truck in nonperishables to restock? And two, that all purchases were cash-only. I couldn’t tell from the report whether this was because of logistical reasons (like power outages) or emotional ones, but it did give me pause. Jak and I typically have no more than $40 cash between us, and often none at all. Seattle is a lot safer than the Gulf Coast, but there’s always the chance of, say, a really big earthquake.
So on the list for this week is pulling about $200 out of our WaMu accounts into a Cash Stash. Our biggest problem then becomes keeping it out of the hands of the teenager, who keeps losing her debit card and thinks that we should be her personal ATM.
(Photo by zephyrbunny.)
