Are You The Dangerous Economic Termite I Am?

During my college activist days, I was intentionally, and unabashedly, pursuing radical political change.  That result was not forthcoming but I consoled myself that we won the cultural war and one day that might have a political payoff.  (Although I’m not sure long-haired rednecks smoking pot was the “victory” I intended.)

Now I learn that for the 40 years I’ve lived in the U.S. I have unknowingly, and  enthusiastically, been acting in a manner which poses mortal danger to the economy.  Political change is a sideshow compared to undermining the economy…the latter often results in the former.

You see, I am a bargain hunter. I revel in the deal. Paying full price for anything more than about $10 is anathema to me. And my behavior threatens to wreck the economy, according to economic theorists.

But I am not alone…you too are probably also a dire threat to the nation’s economic health. I am not a single economic termite, eating away at the economy’s structure; I am part of a ravenous colony which may very well bring down the whole economic house.

Says so right here in a Newsweek article titled: “Rock-Bottom Prices!  How Our New Lowball Culture Is Hurting the Recovery.”  (Did your pulse increase, as mine did, when seeing the words…“rock bottom prices”?)

I found this statement obvious: “Americans have always loved bargains, but today require them.”  I doubt Americans are the only ones who love bargains; it may be a universal trait and is particularly true in Asia. Markets are a large part of the economy in Asia and bargaining is de rigueur. (Even in very Westernized Hong Kong, markets abound and I recall during our 1995 trip there a vendor at Stanley market began the negotiations on 100% silk boxers by asking $1.)

The article’s bottom line is this: “If everybody refuses to pay existing prices in order to improve their financial standing, then everybody will suffer.”  The theory being that by having to sell at “rock bottom prices” there will be less money circulating in the economy and that will lead to a downward spiral, bringing on loss of jobs and so on. Economists refer to this as “the paradox of thrift”: if everyone saves, there is decreased demand and so everyone gets poorer.

Well, I’m not buying that!  Not at “full price” anyway…  😉  As with all situations, including the current recession, there are “winners” and “losers.”  The idea that “all win” or “all lose” is not a concept I accept except in very rare instances (worldwide nuclear war).

If you believe the “paradox of thrift” theory, then you are more than welcome to pay full price. Someone’s gotta do it….but not me!


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