For those of you wondering when/if we are going to see the effects of the current recession and the skyrocketing price of gasoline, it's happening already. Let me tell you a story...
While shadowing today I talked at length with a patient who owns a restaurant. Or I should say currently owns a restaurant, because the future of this small business is in doubt. After over two decades of friendly service, this cozy haven is perilously close to shutting its doors.
When I asked the owner what he blamed for his misfortune he had one simple answer: gas prices. Apparently this man is extremely fastidious with his bookkeeping and can trace the slow decline of his profits as they juxtapose the ever swelling price of gasoline. He explained to me that he recently looked at his records and saw a startling correlation between the cost of gas and his customer base.
According to him, a little over three years ago (2005) the price of gas jumped from ~$2.30/gal to ~$2.90/gal (a 26% increase). After this spike, he saw business at his restaurant drop off by 30%. Well, although the loss was tough he kept trucking ahead. Then gas jumped again, from ~$3.00/gal to the current price of ~$3.35/gal (a 12% increase). Again, he saw business plummet by another 30%. He is now clinging to what little income he is drawing from the restaurant and will likely shut the doors permanently soon.
And gas isn't the only reason people are going out less. There is simply less expendable income for the average person. With rising inflation, the average American budget just doesn't have enough pocket money to go out anymore.
Picture a young newlywed couple. In previous decades they would usually have $20-60 to spend on the weekends (dinner, movie, drinks). Now this money goes to fill a gas tank. And that amount of money couldn't even buy dinner and a movie these days to begin with ($9.00 for a single movie ticket?!?! I'll borrow my buddy's pirated copy, thanks).
And this brings up the issue of previous recessions. "But, but, but, recessions have occured in the past! Look at the early 2000s after the dot-com burst! We recovered from that because of Dubya! Yee-Haw!"
Don't count on that this time. We recovered from previous recessions because we still wielded unparalleled power on the world economic stage. No longer. Where previously we were the biggest oil market in town (and so saturated in cheap oil we might as well have bathed in it) now we are in direct competition with the Big Red Dragon - China. Now, China hasn't yet reached the absurd amounts of consumption we are accustomed to, but they will if given opportunity. This means that when the big swinging dicks of OPEC are looking to shill out their black gold, they can now go with the highest bidder where there was previously only one buyer in the market (US).
So what does this mean in the long run? Well don't expect gas prices to go down, that's for sure. And those days of long car trips, affordable SUVs, and earth-rumbling RV homes are dwindling into the history books. Expect to be living by much more meager means in the future. I'm not saying it's going to be tomorrow, but just know that powers are shifting. And if you think the Middle East and China are significant powers today, well.....
2 comments:
So, let's talk about ridiculous consumption. Why is it that driving a huge military vehicle is some ultimate indication of success and all the wonderful things that the USA has to offer for a suburban family of four? That certainly isn't the American Dream that I have always pictured. And yet, I too suffer from "Affluenza": I own an iPod, BlackBerry, pairs of jeans that cost more than my weekly grocery bill. Why? I assume it is because I am trying to fill some void in my life in the same way that everyone else does: you just buy it. I would like to see the American Dream sold in a comprehensive kit that I can get at a drive-through; it is so inconvenient to have to go to more than one store. And then I wonder if in 10 years I will be the suburban family of four, driving that ridiculous military vehicle...
So perhaps as scary as a recession sounds, it may be the best thing that has happened to America in a long time. Perhaps people with talk to other people in person, because they can’t afford the computer and high speed internet. Goodbye Myspace & Facebook – the place of all social awkwardness.
Maybe people will form social networks, and pool their resources to help one another. Borrow a cup of sugar from my neighbor right now? No way, who knows who they are! Plus, Wal-Mart is just down the street.
What if in the face of only one parent having a job, the family eats dinner together, at home because that is what they can afford? Besides spending enough time with your children that you know what is going on in their lives, I assume you could also be looking at a drastic improvement in health (French fries are so much less appealing when Mom makes them in the oven).
Conceivably on the brink of economic disaster, we could possibly be heading toward a social revolution. Could I give up my BlackBerry for a date (Read: happiness) with the brilliant man who posts this blog? Absolutely.
First, thank you so much for your comment. This was a hard post to write as it gave evidence for what I'm fearing is bearing down on America all to quickly. The bullet is about to nail us in the ass, and we've got out back turned.
No, in 10 years you will not be living the consumption-centered life of a suburbanite, getting tans and manicures while the kiddos are at soccer practice and driving your Supremely Unwieldy Vehicle with Gatorade and Starbucks stains on the seats.
And the reason is because this way of life is simply going to dry up and disappear for most people. It won't be a sustainable lifestyle for the vast majority of people in America. If America is entering a period of stagflation like many think, there WILL be a downturn in consumption due to the inflating dollar and loss of jobs.
I do tend to agree with your opinion that this downturn will have some social benefit. America has been in a consumer frenzy for over 20 years now; we have voraciously pushed ourselves to ever more absurd use of resources (see energy drinks, Hummers, and McMansions). So you are right, when the economy slows, these things will have to be left behind as they simply will not be affordable by ANYONE but the elite which equals "a good thing".
Absolutely I would like to see a simplification of American lives. I'd love to take the bus and work in community gardens, but it is simply hard to drum up support for this type of venture because there is such apathy. If our options for lifestyle become more limited, then yes, these alternatives will become more appealing out of necessity.
And you don't need to turn in your Blackberry for a date, but I do ask that you turn it off so we can talk to one another and work on the social benefits that come from being 'off the grid'.
But please leave me my internet... I need to blog!
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