Economic psychology
January 8, 2009 7:59 PM Subscribe
Help! I am suffering from anxiety and cognitive dissonance on the economy and my current situation.
I know that people who are genuinely in trouble may read this and want to sock me (verbally or otherwise). I presently am employed as the librarian at a school (part time, but it pays well for part-time work, semi-professional) and living with parents while I work my way through a master's degree, which I expect to take another year or two. I do a lot of "housewife" work (cooking, etc.) which is one rationale for the arrangement. My parents both work and there is no need for me to pay them rent. I have saved about 80% of my salary and were I to have no other source of support or income, I could probably live on these savings for a year if I quit school. I do not have substantial investments other than Social Security and the very conservative retirement plan at my workplace. I have health insurance at my job.
I take my part-time job seriously and I have put in effort that is probably above and beyond what is expected of me. The teachers and staff approve of me. The students are another story, but they are there because they have problems (it's a special ed school).
The students at my university and in my graduate program do not look particularly impoverished. It's a state university, so maybe they have more money for things than people who are attending $40,000/yr private colleges and who are not rich. The geographic area is Washington, D.C., so it (apart from the exurbs, which expanded too fast and now are contracting, and the inner city) is relatively unaffected by the economy.
Nonetheless I am in a state of constant low-level hysteria from the TV and newspaper news about the economy and liberal blog stories about people who are out of work or are working several menial jobs. I am terrified of being laid off from my job, which is not strictly necessary to the operation of the school (they did without a librarian for some time).
The cognitive dissonance between my actual situation and what I read about actually makes me want to go out and buy things. I feel that if I'm going to be laid off and my parents will lose their jobs and we'll have a second Great Depression and all be living in Bushville hovels, I might as well have something now. I wonder if the media is aware of this psychological paradox and is using it to stimulate the economy!
I feel like a selfish bastard and feel almost chronically guilty and anxious. But it's like being told that you should be on a starvation diet and trying to stick to one when you see food all around you. (I don't have a weight problem, but maybe some Mefites can emphasize.)
I am a thrift shop and consignment shop hunter and look for bargains, so I may spend $5 or $15 on some clothes, at the rate of $25 a week in addition to my regular expenses on travel (I commute both to work and to school) and tuition and books. I almost never buy full price. I don't have other entertainment expenses (I don't go to movies or concerts, go out to clubs, travel recreationally, use drugs which WOULD lose me my job, talk on the phone a great deal, etc.)
But I know that I won't be able to keep even thrift shopping should I lose my job. How can I deal with my fears and conflicts in a psychologically and economically healthy way?
Sorry for the length of the post, but financial AskMe questions of this sort usually draw requests for detail.
I know that people who are genuinely in trouble may read this and want to sock me (verbally or otherwise). I presently am employed as the librarian at a school (part time, but it pays well for part-time work, semi-professional) and living with parents while I work my way through a master's degree, which I expect to take another year or two. I do a lot of "housewife" work (cooking, etc.) which is one rationale for the arrangement. My parents both work and there is no need for me to pay them rent. I have saved about 80% of my salary and were I to have no other source of support or income, I could probably live on these savings for a year if I quit school. I do not have substantial investments other than Social Security and the very conservative retirement plan at my workplace. I have health insurance at my job.
I take my part-time job seriously and I have put in effort that is probably above and beyond what is expected of me. The teachers and staff approve of me. The students are another story, but they are there because they have problems (it's a special ed school).
The students at my university and in my graduate program do not look particularly impoverished. It's a state university, so maybe they have more money for things than people who are attending $40,000/yr private colleges and who are not rich. The geographic area is Washington, D.C., so it (apart from the exurbs, which expanded too fast and now are contracting, and the inner city) is relatively unaffected by the economy.
Nonetheless I am in a state of constant low-level hysteria from the TV and newspaper news about the economy and liberal blog stories about people who are out of work or are working several menial jobs. I am terrified of being laid off from my job, which is not strictly necessary to the operation of the school (they did without a librarian for some time).
The cognitive dissonance between my actual situation and what I read about actually makes me want to go out and buy things. I feel that if I'm going to be laid off and my parents will lose their jobs and we'll have a second Great Depression and all be living in Bushville hovels, I might as well have something now. I wonder if the media is aware of this psychological paradox and is using it to stimulate the economy!
I feel like a selfish bastard and feel almost chronically guilty and anxious. But it's like being told that you should be on a starvation diet and trying to stick to one when you see food all around you. (I don't have a weight problem, but maybe some Mefites can emphasize.)
I am a thrift shop and consignment shop hunter and look for bargains, so I may spend $5 or $15 on some clothes, at the rate of $25 a week in addition to my regular expenses on travel (I commute both to work and to school) and tuition and books. I almost never buy full price. I don't have other entertainment expenses (I don't go to movies or concerts, go out to clubs, travel recreationally, use drugs which WOULD lose me my job, talk on the phone a great deal, etc.)
But I know that I won't be able to keep even thrift shopping should I lose my job. How can I deal with my fears and conflicts in a psychologically and economically healthy way?
Sorry for the length of the post, but financial AskMe questions of this sort usually draw requests for detail.
Nonetheless I am in a state of constant low-level hysteria from the TV and newspaper news about the economy and liberal blog stories about people who are out of work or are working several menial jobs
Step one: Stop watching the news. Stop looking at depressing blogs. They are actually MEANT to cause hysteria, did you know this? (Boring news = no ratings. Happy news = no ratings.)
Put yourself on a media diet for one month. You will be amazed at how better you feel afterwards.
All this anxiety you have can be a magnet, I'm afraid, for "crappy luck:. Did you read about a study that showed how more relaxed people are able to spot better opportunities, vs. people who are perpetually anxious?
If you have time, read some history. It seems to me most of human history has almost always been in a state of upheaval. And if not, a state of a slow deterioration between brief peak to brief peak. Times of peace and plenty are far and in between. After you read enough of it, you begin to take a more birds eye view of the whole human drama, and in somewhere in the back of your mind, you begin to hear the words:
This too, shall pass.
A whisper to enjoy life now. Because we're all dust eventually.
posted by uxo at 8:28 PM on January 8, 2009 [5 favorites]
Step one: Stop watching the news. Stop looking at depressing blogs. They are actually MEANT to cause hysteria, did you know this? (Boring news = no ratings. Happy news = no ratings.)
Put yourself on a media diet for one month. You will be amazed at how better you feel afterwards.
All this anxiety you have can be a magnet, I'm afraid, for "crappy luck:. Did you read about a study that showed how more relaxed people are able to spot better opportunities, vs. people who are perpetually anxious?
If you have time, read some history. It seems to me most of human history has almost always been in a state of upheaval. And if not, a state of a slow deterioration between brief peak to brief peak. Times of peace and plenty are far and in between. After you read enough of it, you begin to take a more birds eye view of the whole human drama, and in somewhere in the back of your mind, you begin to hear the words:
This too, shall pass.
A whisper to enjoy life now. Because we're all dust eventually.
posted by uxo at 8:28 PM on January 8, 2009 [5 favorites]
You are not alone.
There is greater anguish to be found in the comparison of suffering than simply recognizing that there is suffering. There have been numerous unspeakable tragedies that have fallen upon humanity, I don't even want to begin a list. Horrible things. Yes. Who can say what will become better or worse? I personally have been through this (and worse) before, and most likely will live through it again. It's a phase, an adjustment, a learning process... on a global scale.
I, along with all medical and mental health professionals will tell you: STAY AWAY FROM THE NEWS.
Start a reading group. Read Candide.
posted by ezekieldas at 9:12 PM on January 8, 2009
There is greater anguish to be found in the comparison of suffering than simply recognizing that there is suffering. There have been numerous unspeakable tragedies that have fallen upon humanity, I don't even want to begin a list. Horrible things. Yes. Who can say what will become better or worse? I personally have been through this (and worse) before, and most likely will live through it again. It's a phase, an adjustment, a learning process... on a global scale.
I, along with all medical and mental health professionals will tell you: STAY AWAY FROM THE NEWS.
Start a reading group. Read Candide.
posted by ezekieldas at 9:12 PM on January 8, 2009
Adding a line to uxo's excellent advice, it's bad, but really not nearly as bad as the news naysayers want it to be. It's easy to spout 'motivational maxims', but I (who have also been very distressed by this mess) try to remember "And having food and raiment let us therewith be content". And I make an mighty effort to mostly stay away from the news and all but a very few political blogs. Also reading Dickens, these be wonderful times to read Dickens.
posted by dawson at 9:19 PM on January 8, 2009
posted by dawson at 9:19 PM on January 8, 2009
1) less articles, more gallows humor. I have read alot of literature on how humor is a natural defense against depression and anxiety.
2) stop feeling guilty about feeling anxious. anxiety is a very real force in people's lives. heck, ask any economist. Market volatility is caused by it (well by fear anyways).
3) find a way to relax at the end of each day. If you need any pharmocological help, I reccomend 1 beer or 1 glass of wine but no more. Alcohol induces a slight euphoria at low doses and even when consumed daily in the quantities mentioned above has signifigant health benefits over staying completely sober. All that bad shit alcohol does to people happens when they consume more than 2 standard drinks daily.
4) talk about how you feel with your friends and family, or even a counselor. I'm the first person to say that psychologists are nothing but glorified witch doctors but there is a signifigant neurological mechanism which is relieved by discussing your problems in a comfortable setting.
5) help out random people whenever you can. I don't mean donate to charity I mean help dig out a car that's stuck in the snow. If you help someone and it costs you nothing that's a quick and dirty endorphin fix that people don't get enough of these days.
I'm afraid that I'm unfamiliar with the concept of anxiety over anything that happens on the news but I do have a permenant fear that everyone is plotting against me somehow and steps 3-5 have helped me alot.
posted by Pseudology at 9:21 PM on January 8, 2009
2) stop feeling guilty about feeling anxious. anxiety is a very real force in people's lives. heck, ask any economist. Market volatility is caused by it (well by fear anyways).
3) find a way to relax at the end of each day. If you need any pharmocological help, I reccomend 1 beer or 1 glass of wine but no more. Alcohol induces a slight euphoria at low doses and even when consumed daily in the quantities mentioned above has signifigant health benefits over staying completely sober. All that bad shit alcohol does to people happens when they consume more than 2 standard drinks daily.
4) talk about how you feel with your friends and family, or even a counselor. I'm the first person to say that psychologists are nothing but glorified witch doctors but there is a signifigant neurological mechanism which is relieved by discussing your problems in a comfortable setting.
5) help out random people whenever you can. I don't mean donate to charity I mean help dig out a car that's stuck in the snow. If you help someone and it costs you nothing that's a quick and dirty endorphin fix that people don't get enough of these days.
I'm afraid that I'm unfamiliar with the concept of anxiety over anything that happens on the news but I do have a permenant fear that everyone is plotting against me somehow and steps 3-5 have helped me alot.
posted by Pseudology at 9:21 PM on January 8, 2009
I can only echo what the previous posters have said: AVOID THE NEWS MEDIA. It is devised to raise your blood pressure.
This may sound rather trite - but spend a few minutes a day being grateful for what you *do* have. There are so many people in this world that have no food, shelter, clothing, or basic medical care. If you have these things, count yourself among the truly blessed.
You're not a selfish bastard, you're just scared, and it's OK to feel that way. Now you just have to decide how you're going to react to it and how you're going to change your reaction. Hang in there.
posted by pianoboy at 9:23 PM on January 8, 2009
This may sound rather trite - but spend a few minutes a day being grateful for what you *do* have. There are so many people in this world that have no food, shelter, clothing, or basic medical care. If you have these things, count yourself among the truly blessed.
You're not a selfish bastard, you're just scared, and it's OK to feel that way. Now you just have to decide how you're going to react to it and how you're going to change your reaction. Hang in there.
posted by pianoboy at 9:23 PM on January 8, 2009
Hi, I am in almost the exact same situation as you. I work at a library part time as a para-professional and I live with my parents. Except my mom is retired and I get absolutely no health insurance. Here are the reasons I don't worry too much and why you shouldn't either.
1) I don't watch or read the news (just like uxo suggests above, for those exact reasons).
2) I do check job postings on my local library job boards. This keep me informed about what type of jobs are out there if I was ever to leave mine. This is important because you will see both jobs you are qualified for now and jobs that you might like in the future that might have an extra requirement you can work on in school.
3) I live in a decent area for library work and so do you! The DC area is one of the largest growing for opportunities in our field.
4) You and I don't control the economy. We just don't. But we do control how well we do our jobs, what we choose to learn, and how we handle our money.
5) I use my anxious thoughts to help me. What is the absolute worst that could actually happen? What if you did get laid off? What would you do? Well for one you could apply for unemployment. Then you could use your awesome skills and apply for other jobs. And you already know how to get clothes for cheap. I bet you are creative enough to do more things free or cheap. What would you make your shantytown house out of? Sure, cardboard is obvious, but what else is free and lying around? Anxiety gives you questions and worries, but your imagination can give you answers and plans.
Now think about what the best things that could actually happen could be. No really, do it. Now. Are you thinking about getting another job at the library of your dreams? Or becoming a corporate library specialist organizing media for the discovery channel. Or maybe you get scooped up into a top secret government research project that needs someone just like you. Are you writing your resume, and highlighting how your skills match up with the job in a cover letter?
6) What are your goals for this year, and for the next 3 or 5? I save a lot of money because I want a car. Every time you feel anxious and think you might as well have something right now, remember that you have goals that you are working towards. I still buy clothes, but I stop myself from getting more than I need by remembering my other goals. Those goals will still be there no matter how the economy is (and if I have enough saved, prices will be cheaper if the economy tanks and I can get more for my money!).
Finally, I know the difference between being a little worried and having anxiety that needs medical help. You don't sound like you are freaking out too much, but if you feel overwhelmed and start showing physical symptoms or are not able to function well in school or work, talk to someone. A friend (or us), or a counselor, or your doctor.
Literally millions of people feel the same way you do right now. Just because you feel anxious doesn't mean you are selfish or need to feel guilty. Your feelings are important because they are your feelings. They don't have to be justified. Sometimes you can't help the way you feel, but you can help what you do about it. I hope you feel better soon and have fun thinking of all the ways you could live and be happy no matter how the economy is ;)
posted by CoralAmber at 9:54 PM on January 8, 2009 [1 favorite]
1) I don't watch or read the news (just like uxo suggests above, for those exact reasons).
2) I do check job postings on my local library job boards. This keep me informed about what type of jobs are out there if I was ever to leave mine. This is important because you will see both jobs you are qualified for now and jobs that you might like in the future that might have an extra requirement you can work on in school.
3) I live in a decent area for library work and so do you! The DC area is one of the largest growing for opportunities in our field.
4) You and I don't control the economy. We just don't. But we do control how well we do our jobs, what we choose to learn, and how we handle our money.
5) I use my anxious thoughts to help me. What is the absolute worst that could actually happen? What if you did get laid off? What would you do? Well for one you could apply for unemployment. Then you could use your awesome skills and apply for other jobs. And you already know how to get clothes for cheap. I bet you are creative enough to do more things free or cheap. What would you make your shantytown house out of? Sure, cardboard is obvious, but what else is free and lying around? Anxiety gives you questions and worries, but your imagination can give you answers and plans.
Now think about what the best things that could actually happen could be. No really, do it. Now. Are you thinking about getting another job at the library of your dreams? Or becoming a corporate library specialist organizing media for the discovery channel. Or maybe you get scooped up into a top secret government research project that needs someone just like you. Are you writing your resume, and highlighting how your skills match up with the job in a cover letter?
6) What are your goals for this year, and for the next 3 or 5? I save a lot of money because I want a car. Every time you feel anxious and think you might as well have something right now, remember that you have goals that you are working towards. I still buy clothes, but I stop myself from getting more than I need by remembering my other goals. Those goals will still be there no matter how the economy is (and if I have enough saved, prices will be cheaper if the economy tanks and I can get more for my money!).
Finally, I know the difference between being a little worried and having anxiety that needs medical help. You don't sound like you are freaking out too much, but if you feel overwhelmed and start showing physical symptoms or are not able to function well in school or work, talk to someone. A friend (or us), or a counselor, or your doctor.
Literally millions of people feel the same way you do right now. Just because you feel anxious doesn't mean you are selfish or need to feel guilty. Your feelings are important because they are your feelings. They don't have to be justified. Sometimes you can't help the way you feel, but you can help what you do about it. I hope you feel better soon and have fun thinking of all the ways you could live and be happy no matter how the economy is ;)
posted by CoralAmber at 9:54 PM on January 8, 2009 [1 favorite]
PRN prescription medication.
posted by valentinepig at 10:01 PM on January 8, 2009
posted by valentinepig at 10:01 PM on January 8, 2009
One of the tenets of adulthood is learning to live with risk. Perceived or real, you will need to start putting paranoid thoughts on the back burner. If that means reading less hysterical media then do that. If that means positive thinking then do that. In the end I think that the period between college and landing your first stable job is pretty stressing. You'll need to find the coping mechanisms that work for you. I imagine everyone goes through this and the economic news are just making it a little worse.
posted by damn dirty ape at 10:48 PM on January 8, 2009
posted by damn dirty ape at 10:48 PM on January 8, 2009
I have struggled with exactly the same issues, and I severely limit my media intake. Since I'm a techie, I use Google Reader plus feedrinse to actively filter out stuff I know I don't want to hear about. I don't listen to NPR anymore except for their podcasts, and if "Fresh Air" is going to be about Our Impending Doom today I press skip on my Ipod. You're going to hear about the important stuff anyway, in daily conversation.
Not to downplay the severity of our current situation, but I remember back in the late 80s/early 90s after the S&L fiasco the news was extremely dire, and within a few years the financial situation in the US turned around.
posted by mattholomew at 3:08 AM on January 9, 2009
Not to downplay the severity of our current situation, but I remember back in the late 80s/early 90s after the S&L fiasco the news was extremely dire, and within a few years the financial situation in the US turned around.
posted by mattholomew at 3:08 AM on January 9, 2009
I must not fear.
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear.
I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing.
Only I will remain.
Frank Herbert, "Dune"
Sometimes, I too get a touch of fear. But it is entirely media-induced. I live in Switzerland, and see no evidence of the financial disaster of which i read. The papers here say people are spending money same as usual, be it Christmas gifts or ski trips. No rumor suggests my partner's job is in any danger. My brokerage account is in cash, such as it is. My partner works for a company that gets top ratings from all the analysts, so even our options and those stocks are not looking too dangerous. My main fear is, if something happened to the other half, I'd have to return to the U.S.. But even then, I'll have a rather fat life insurance payout to last the rest of my life.
But the fear visits anyway. I say 'Hi', and entertain it only a bit, before sending it on its way. Besides, I'm easily distracted (benefit of ADD! w00t!).
posted by Goofyy at 5:26 AM on January 9, 2009
Fear is the mind-killer.
Fear is the little-death that brings total obliteration.
I will face my fear.
I will permit it to pass over me and through me.
And when it has gone past I will turn the inner eye to see its path.
Where the fear has gone there will be nothing.
Only I will remain.
Frank Herbert, "Dune"
Sometimes, I too get a touch of fear. But it is entirely media-induced. I live in Switzerland, and see no evidence of the financial disaster of which i read. The papers here say people are spending money same as usual, be it Christmas gifts or ski trips. No rumor suggests my partner's job is in any danger. My brokerage account is in cash, such as it is. My partner works for a company that gets top ratings from all the analysts, so even our options and those stocks are not looking too dangerous. My main fear is, if something happened to the other half, I'd have to return to the U.S.. But even then, I'll have a rather fat life insurance payout to last the rest of my life.
But the fear visits anyway. I say 'Hi', and entertain it only a bit, before sending it on its way. Besides, I'm easily distracted (benefit of ADD! w00t!).
posted by Goofyy at 5:26 AM on January 9, 2009
Instead of reading the liberal blogs or watching the news try writing a letter to a distant relative or reading a book.
posted by big open mouth at 6:32 AM on January 9, 2009
posted by big open mouth at 6:32 AM on January 9, 2009
Keep a gratitude list.
Include the most seemingly minor things.
The list grows, and the sum of its parts is wonderful to read.
posted by jgirl at 8:14 AM on January 9, 2009
Include the most seemingly minor things.
The list grows, and the sum of its parts is wonderful to read.
posted by jgirl at 8:14 AM on January 9, 2009
I agree with others about avoiding the news, but you can't always avoid other people who are going to talk about the news. So change the subject when it's brought up.
posted by desjardins at 8:35 AM on January 9, 2009
posted by desjardins at 8:35 AM on January 9, 2009
Everyone has a different means for handling with this anxiety. But I really have to say that prescription medication is not the answer.
posted by nameless.k at 10:00 AM on January 9, 2009
posted by nameless.k at 10:00 AM on January 9, 2009
nthing "avoid the newsmedia".
I am a bit of a news addict (runs in the family) and over my Christmas vacation - turned everything off. It was the happiest 2 weeks out the last 5 months...
posted by jkaczor at 10:32 AM on January 9, 2009
I am a bit of a news addict (runs in the family) and over my Christmas vacation - turned everything off. It was the happiest 2 weeks out the last 5 months...
posted by jkaczor at 10:32 AM on January 9, 2009
your lifestyle seems to be quite austere/conservative or whatever you want to call it so if you are going to spend a little bit of money each week on something to cheer yourself up spend it on an enjoyable activity or experience and not the thirft shop jumper...having fun will probably do more for your emotional well being than the jumper
posted by koahiatamadl at 4:04 PM on January 9, 2009
posted by koahiatamadl at 4:04 PM on January 9, 2009
I'll nth the suggest to put some intentional focus on being grateful for what you have.
I've been feeling pretty skittish lately too, and there are a lot of things I use to make myself feel better:
During the Depression the unemployment rate was 25%--but that means that the majority of people, 75%, still were working. We're nowhere near that bad off now; people were freaking today that the unemployment rate got over 7%. But that means that 93% were still working. Odds are that I'll eventually be able to get a job if I look hard enough when I need to--you will too.
No one can take education away from me. If things go south, and life doesn't turn out how I'd like, at least I've still got my ability and skills and prior experience to draw on, and I truly believe that matters. Sounds like you have a great foundation (and shoot, as a librarian, is there anything you can't know? I mean, really!) Lots of folks aren't so lucky.
Related to that--If I do end up out of work, there are still lots of ways I can use my skills and abilities to make positive change in my community.
and finally,
Being happy living frugally means you're way ahead of most of the rest of America, who I think are going to have to get used to it, like it or not!
Hang in there!
posted by Sublimity at 6:05 PM on January 9, 2009
I've been feeling pretty skittish lately too, and there are a lot of things I use to make myself feel better:
During the Depression the unemployment rate was 25%--but that means that the majority of people, 75%, still were working. We're nowhere near that bad off now; people were freaking today that the unemployment rate got over 7%. But that means that 93% were still working. Odds are that I'll eventually be able to get a job if I look hard enough when I need to--you will too.
No one can take education away from me. If things go south, and life doesn't turn out how I'd like, at least I've still got my ability and skills and prior experience to draw on, and I truly believe that matters. Sounds like you have a great foundation (and shoot, as a librarian, is there anything you can't know? I mean, really!) Lots of folks aren't so lucky.
Related to that--If I do end up out of work, there are still lots of ways I can use my skills and abilities to make positive change in my community.
and finally,
Being happy living frugally means you're way ahead of most of the rest of America, who I think are going to have to get used to it, like it or not!
Hang in there!
posted by Sublimity at 6:05 PM on January 9, 2009
The repeated "ignorance is bliss" meme is pretty interesting. Let me try and give you a different reason not to blow it all.
Yes, the news media attempts to keep you stressed. The solution is to avoid media of this sort. DO: Read the BBC website instead of watching FOX news. DO: Ignore bloggers, they are idiots in general anyway. DON'T: put head in sand and whistle about how it's going to be OK.
I have been suffering from a bit of dissonance myself. Here in the SF Bay Area it is getting kind of surreal.
Most of the big companies are laying off, and not in the small way. Lots of 8% here, 5% there, but now and then big doozies. All of these companies, even stalwarts like Intel, are reporting big drops in revenue. Even Walmart is in crisis mode! If you read (nice, non-panicky) articles about the situation in China, it becomes clear that we are in a worldwide recession. Look at the automobile manufacturers [Toyota!].
So.. the biggies are battening the hatches and the people lucky (or dumb) enough to have bought houses in the last 5 years (not unlikely soon to be last 8 years) have either lost a great deal of money on paper or have felt the fictional loss of money that was never any closer to their hands than Zillow (a friend the other day was griping because his home is now only $10k above where he paid for it in 2004 in Zillow's "zestimate" -- he never had the money in hand, he never lost it, but he's feeling the loss all the same because the presence of that boon was subtly affecting his mentality when thinking through his financial plans). An awful lot of people have lost a substantial fraction of their life savings in the market (and an awful lot more lost a very substantial fraction of their 'future' life savings in terms of stock options).
There is a LOT to worry about, but you just don't see people worrying.
You wouldn't know any of this from day to day life. People are not panicing. They have not started to adjust their lifestyles. The malls are full. I was in the (mobbed) Apple store at Valley Fair yesterday. Downtown mountain view is packed. Downtown Palo Alto is packed. People are buying cars, houses, TVs. There are lots and lots of startups getting funded. People are not in fear of losing their jobs... even if they should be.
The reason for this is that people have not adjusted yet. It takes time to go from the initial realization to adjustment of living standards, especially for people in the 30-40 demographic who have done the married-new cars-house-kids thing -- it takes a direct setback for them to really realize something has changed.
Even in the great depression unemployment never hit 50%. The GD was accompanied by other structural issues in the US, and for that matter was not even the worst economic depression suffered worldwide or by the United States.
I don't think that putting your head in the sand makes sense, but I also don't see cause to fret about it. For one thing, other than your attitude, work ethic and other things that will or will fail to keep you employed, you have no control over these macro level issues. All you can do is risk mitigation.
Risk mitigation in the face of a major economic failing means:
Make sure you have the things you _need_ paid off
Make sure you have cash (cash is king now, cash will be king if things go deflationary as they are doing now)
Make sure you are healthy, get regular checkups, have your teeth checked, and so on.
The only scenarior where being frugal, saving, and doing the above will fail you is if we turn into Argentina. That isn't likely today, but even if it happens the first and the third are general purpose mitigation guidelines [and buying gold wont help if they confiscate it, like they did previously].
posted by rr at 11:09 AM on January 10, 2009
Yes, the news media attempts to keep you stressed. The solution is to avoid media of this sort. DO: Read the BBC website instead of watching FOX news. DO: Ignore bloggers, they are idiots in general anyway. DON'T: put head in sand and whistle about how it's going to be OK.
I have been suffering from a bit of dissonance myself. Here in the SF Bay Area it is getting kind of surreal.
Most of the big companies are laying off, and not in the small way. Lots of 8% here, 5% there, but now and then big doozies. All of these companies, even stalwarts like Intel, are reporting big drops in revenue. Even Walmart is in crisis mode! If you read (nice, non-panicky) articles about the situation in China, it becomes clear that we are in a worldwide recession. Look at the automobile manufacturers [Toyota!].
So.. the biggies are battening the hatches and the people lucky (or dumb) enough to have bought houses in the last 5 years (not unlikely soon to be last 8 years) have either lost a great deal of money on paper or have felt the fictional loss of money that was never any closer to their hands than Zillow (a friend the other day was griping because his home is now only $10k above where he paid for it in 2004 in Zillow's "zestimate" -- he never had the money in hand, he never lost it, but he's feeling the loss all the same because the presence of that boon was subtly affecting his mentality when thinking through his financial plans). An awful lot of people have lost a substantial fraction of their life savings in the market (and an awful lot more lost a very substantial fraction of their 'future' life savings in terms of stock options).
There is a LOT to worry about, but you just don't see people worrying.
You wouldn't know any of this from day to day life. People are not panicing. They have not started to adjust their lifestyles. The malls are full. I was in the (mobbed) Apple store at Valley Fair yesterday. Downtown mountain view is packed. Downtown Palo Alto is packed. People are buying cars, houses, TVs. There are lots and lots of startups getting funded. People are not in fear of losing their jobs... even if they should be.
The reason for this is that people have not adjusted yet. It takes time to go from the initial realization to adjustment of living standards, especially for people in the 30-40 demographic who have done the married-new cars-house-kids thing -- it takes a direct setback for them to really realize something has changed.
Even in the great depression unemployment never hit 50%. The GD was accompanied by other structural issues in the US, and for that matter was not even the worst economic depression suffered worldwide or by the United States.
I don't think that putting your head in the sand makes sense, but I also don't see cause to fret about it. For one thing, other than your attitude, work ethic and other things that will or will fail to keep you employed, you have no control over these macro level issues. All you can do is risk mitigation.
Risk mitigation in the face of a major economic failing means:
Make sure you have the things you _need_ paid off
Make sure you have cash (cash is king now, cash will be king if things go deflationary as they are doing now)
Make sure you are healthy, get regular checkups, have your teeth checked, and so on.
The only scenarior where being frugal, saving, and doing the above will fail you is if we turn into Argentina. That isn't likely today, but even if it happens the first and the third are general purpose mitigation guidelines [and buying gold wont help if they confiscate it, like they did previously].
posted by rr at 11:09 AM on January 10, 2009
Response by poster: Thank you, everyone. I find the "media fast" rather impractical. I am imposing skepticism instead and a parallel with 9/11 and the threat of terrorism. This is not to say that the economic downturn isn't real and that people aren't being laid off, but the media exaggerates to keep us in a state of fear and watching the tube.
posted by bad grammar at 6:02 PM on January 11, 2009
posted by bad grammar at 6:02 PM on January 11, 2009
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posted by bend2squares at 8:22 PM on January 8, 2009