Monday, November 29, 2004

Here we go again; It's the economy, stupid.

First off I agree with upyernoz that protesters should absolutely be allowed access to quasi-public spaces such as malls. The proprietors of these malls are shooting themselves in both feet if they think this is the way to deal with harmless street theater protesters (I would have offered them store coupons). Someone seriously needs to sit management down and explain a little public relations to them before the local news decides to do a number on them under the header of Human Interest.

So here I was, reading along as the comments predictably ran into another rehash of the weekend's point/counterpoint debate over the more commercialized aspects of the holiday season, fully intending to get back to work without commenting, until reading the following comment by Hecate (who I still hold dear to my heart):

Can you imagine if, for one month, Americans decided to stop buying anything except necessities?

Yes. As a matter of fact I can clearly imagine what it would be like if Americans decided to stop buying anything except necessities because it actually happened during the week of January 17, 1991.

We were in the middle of a large marketing campaign, clocking in with a response rate of almost 3% (excellent by industry standards) and receiving an average of 5-6 calls an hour from retail stores around the country that we were heavily direct marketing to. So what happened January 17, 1991? Why Gulf War I had just officially begun. Literally as soon as the shooting started, and continuing for roughly a week, you would have thought the phones went unplugged. I actually found myself picking up the receiver to make sure the phone company hadn't shut us off. America sat riveted to their TVs for the better part of a week transfixed on America's first actual, televised, live coverage war. At this moment Hecate's dream of Americans ending all non-essential buying was realized. Unfortunately the bad news turned to worse news as the ripple effects lasted for much longer than that week's buying freeze. Retail stores, shocked by the sudden cessation of consumer buying, responded by running store inventories way down before ordering and remaining lean on inventory and personnel for the remainder of the year. Our amazing pre-attack response rate of 3% dropped overnight to less than 1/10th of a percent. Shortly thereafter several of our largest customers and distributors, the supposedly "safe" accounts (Federated Dept Stores among them) started filing bankruptcy on us. Other good accounts significantly delayed and reduced their normal seasonal orders. Before 2000, the previous US record for assets going into bankruptcy was $93.6 billion and the largest previous number of publicly traded companies filing for bankruptcy was 123. And both of these previous records were set in . . . 1991. Coincidence?

Economists can and will argue over what contributed to 1991 being such a banner year for business bankruptcies but I still vividly recall what I witnessed the week our consumer driven economy sat quietly in awe as the bombs dropped. It took well over a year (and a new president) for the economy to get back on its feet.

Imagine if Americans decided to stop buying anything except necessities? Been there. Barely survived it. Many didn't survive it. There has to be a smarter strategy than cutting off our noses to spite our faces.

[Update: 11:10pm] So I leave for a few hours, uncertain what trouble I've started, and return to a comments section that makes me feel as if I'm viewing my post through a kaleidoscope. I got as far as this comment by Fielding Mellish before I felt I should clarify a few things:

The message "buy stuff because it's good for the country" has the same resonance with me as the message "get along with Republicans because it's good for the country." None.

First, I understand that Federated was being set up to be fleeced even before the original Gulf war freeze (it made a handy cover) and I am aware that the moribund economy that followed gave a needed boost to Clinton. It only goes to follow that the party on the outside benefits when things go sour. But we have to be more sophisticated than curing the disease through blood-letting. I'm suggesting economic reverse kemo-therapy. Starve the obvious Republican connected companies, not our natural allies in your local markets. So you're not going to buy dumb gifts. No problem. Are you going to buy a card? Would it be worth an extra $2 to know it was hand made by someone in your state? I stay very conscious of who, where and how much I spend regardless of whether it's food and clothing related or if it's stupid Kotchkies. Note: Anyone incurring needless debt right now needs their head examined.

We can make a difference, but as Wyatt Urp once said, "[A]lways take the extra part of a second to aim."