Tag Archives: recession

Profligate propensities: haircut edition

Profligate: adj. wildly extravagant

Propensity: n. an intense preference

We care a LOT about how the dead cells that make up our hairs and nails look, even though however we fix them up they grow out in just a few weeks and have to be done all over again.  The hair and beauty salons bank on this constant growth, and bring $46 billion a year to the American economy. Even in a recession, it’s only down 2% over last year.

I too care about how my hair looks because it’s difficult – fine, short and limpish. A bad haircut can be disastrous.  Over the years however, I’ve found some hair stylists who were really gifted with the scissors, and I paid them well (I thought) to work their magic — up to $65  at a trendy salon in Portland. My current gal in Vancouver, who is every bit as skillful, only charges $35.

I knew prices were high in Manhattan but I had no idea HOW high. Evidently women just fork over the big bucks without a second thought.  But perhaps the recession is beginning to register with some of them?  Groups of friends are now organizing hair-cutting parties where they hire a fancy stylist to bob the group after hours at a discount – paying “under the table”.

Not all stylists find this appealing (hold your hats!):

“I had someone call me last week,” Ted Gibson, who charges $950 a cut, said recently. The potential customer was a guest at the Ritz-Carlton and wanted Mr. Gibson, who boasts a celebrity clientele and owns Ted Gibson Salon in Manhattan, to cut his girlfriend’s hair. “He was trying to negotiate for me to come and do it for $650. I was like, ‘No, I charge double if I go out,’ ” Mr. Gibson said. “Needless to say, they did not book me.”

$950!! For the price of a month’s rent could I get a haircut that was 27 TIMES better than what Gina gives me?
If I lived in New York, I’d just grow my hair out, put it in a pony tail, and call it good.
Ted Gibson can stuff it.

Puncturing the prosperity myth: we’re in recession!

Puncture: v. to pierce with a pointed object; to make useless or ineffective by piercing or deflating

Prosperity: n. the condition of being successful or thriving ; especially : economic well-being

It’s official. We’re in a recession. AND have been since December 2007.
A YEAR AGO.

No wonder we were so pissed off when McCain’s advisor Phil Gramm called us “a nation of whiners.” We knew we were hurting, but the Bush administration didn’t want to admit how bad it was in an election year.  I hate it when rich old white guys look down their long noses at the suffering of the little people or pretend nothing’s wrong.

According to the NY Times today:

The evidence of a recession has been widespread for months: slower production, stagnant wages and hundreds of thousands of lost jobs.But the National Bureau of Economic Research, charged with making the call for the history books, waited until now to make it official…

the country entered a recession exactly one year ago, at least according to the members of the Business Cycle Dating Committee, made up of seven prominent economists, most from the academic sector. The group made their official announcement on Monday that the economy entered a recession in December 2007.

“A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators,” the members said in a statement. “A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough.”

The committee noted that the contraction in the labor market began in the first month of 2008 and said that the declines in most major indicators, like personal income, manufacturing activity, retail sales, and industrial production, “met the standard for a recession.”

I wonder when it becomes a depression?

We’ll have to find ways of coping.  For now, I’m lucky to have a roof over my head, even if it was a leaky one. The roof guy came out to fix it this morning and gave me a significant discount for paying him in cash. “We’re both hurting,” he said.

Pricking the prosperity pipe dream

Prosperity: the condition of being financially successful, flourishing

Pipe dream: illusion (orginally related to smoking opium)

“Oh, you’re just a bunch of whiners,” said a McCain advisor last month.  Everything’s great – just a little problem in the housing and mortgage end of things. Yeah, maybe gas is more expensive than it was, but drill a few more wells and we’ll be fine. Quitcher bitchin’.

Tell that to the people I know.  To a person, we’re feeling the pinch and we’re cutting back on all fronts.

According to Robert Reich, former Secretary of Labor in Clinton’s administration:

…This isn’t a normal downturn. The problem lies deeper. Most Americans can no longer maintain their standard of living. The only lasting remedy is to improve their standard of living by widening the circle of prosperity.

The heart of the matter isn’t the collapse in housing prices or even the frenetic rise in oil and food prices. These are contributing to the mess, but they are not creating it directly. The basic reality is this: For most Americans, earnings have not kept up with the cost of living. This is not a new phenomenon, but it has finally caught up with the pocketbooks of average people. If you look at the earnings of nongovernment workers, especially the hourly workers who comprise 80 percent of the work force, you’ll find they are barely higher than they were in the mid-1970s, adjusted for inflation. The income of a man in his 30s is now 12 percent below that of a man his age three decades ago. Per-person productivity has grown considerably since then, but most Americans have not reaped the benefits of those productivity gains. They’ve gone largely to the top.

Inequality on this scale is bad for many reasons, but it is also bad for the economy. The wealthy devote a smaller percentage of their earnings to buying things than the rest of us because, after all, they’re rich. They already have most of what they want. Instead of buying, the very wealthy are more likely to invest their earnings wherever around the world they can get the highest return.

This underlying earnings problem has been masked for years as middle- and lower-income Americans found means to live beyond their paychecks. But they have now run out of such coping mechanisms.

Coping mechanisms we have used and outgrown include:

  • Women joining the workforce to augment family income
  • Working more hours
  • Borrowing. Big time. Credit cards, home refinancing.

Proper progressive that he is, Reich suggests:

…the long-term answer is for us to invest in the productivity of our working people — enabling families to afford health insurance and have access to good schools and higher education — while also rebuilding our infrastructure and investing in the clean energy technologies of the future. We must also adopt progressive taxes at the federal, state and local levels. In other words, we must rebuild the American economy from the bottom up. It cannot be rebuilt from the top down.

I’m with him on this. It’s a standard public health approach, with long term benefits to be reaped only after the pain of spending preventive money up front.  It’s the right thing to do, just as the right thing to do in Iraq and Afganistan is to build schools, roads, hospitals – ask Greg Mortenson hero of the bestseller Three Cups of Tea.

Will we do it?? Not till the Republicans are in a much greater minority.

Meanwhile, I know that as I buy less, the folks who built the stuff I’m not buying have less to build, and the folks who own the factory where these folks are building less stuff are buying fewer raw materials, which means the folks who mine or ship or create those raw materials have to cut back too…. and pretty soon everyone is hurting.