One thing that I have thought about over the past few weeks seems to be this bifurcation that seems to be taking place between those who are struggling in this economy and those that seem to be doing just fine.
In the news, I continuously here about how ordinary Americans are struggling. Unemployment is nearing double digits in most parts of the country. It is even worse around here as California is above 11%. The U.S. is printing money to cover up the problems and big companies like GM and Chrysler are going under. It seems all is doom and gloom depending on where you are looking at things. Of course there are the "green shoots" that we all want to see. This is the reason that the market rallied over the last ten or so weeks. We are up over 30% from the lows because the market has decided that we are not going to reach armageddon. But if you really read the news it does not look good for most of your average Americans.
But I get the feeling that we are really coming down to a society of the haves and the have nots. Throughout all this bad news the one thing that has really struck me is how little some things have not been affected. I went to the mall this weekend and it was pretty crowded. Of course I have no idea if people are actually buying things. Maybe they are just looking and needing to get to the malls to get away from their problems. But I'm definitely not seeing the scracity of people I would expect to see. It was the same thing this past holiday season where the malls and outlets were much more crowded than I would expect given the dire situation much of the nation faces.
For more proof just look at the movies. Hollywood is having a fantastic year at the box office. People are going to see the big blockbuster movies like Star Trek and Terminator. By many accounts, this might be a record year for Hollywood. Now much of it is due to higher ticket prices but that in itself is a good sign. It is not easy to raise prices if there is no demand for your product. And clearly there is demand. With ticket prices over $10 in most places, I would expect this to be a luxury most people skip as times get rougher, but that doesn't seem to be the case.
Now everything I've written is mostly anecdotal. Maybe people are really cutting back and I'm just seeing it from a different perspective. But it has me thinking. Maybe this recession is hitting the population in very disproportionate ways. Most people would immediately jump to a rich vs. poor conclusion but I'm not so sure. If that were really the case, I wouldn't be noticing the activity I am seeing simply because the "poor" should greatly outnumber the "rich".
So what is it? Are things really either that good or that bad? Who do you think is most being affected by this recession?
Terrence, I wonder if the movie biz being successful is due to it being a 'replacement activity' for other, more expensive things like big dinners out, playing with new fancy toys, or vacations. Just a thought.ReplyDelete
Yeah, I thought about that and there is some merit in this argument.ReplyDelete