July 6, 2009
Parsimony's residue
By Bill Kraus
The lurch from a wants economy to a needs economy, where parsimoniousness has taken over for the credit-card driven profligacy that we had come to know and love, has created a whole new endangered species list that has nothing to do with snail darters.
Everybody knows about the fall from grace of the automobile and the bankers and a few reckless insurers, along with anyone in the construction business, particularly home construction.
All that discretionary stuff people used to buy to fill up their McMansions has pretty much gone the way of the McMansions themselves.
It would seem that those of us who are waiting for these former lynchpins of the economy to come back are in for a very long wait indeed.
What should not be overlooked are some other one-time favorites that are no longer the beneficiaries of our fiscal generosity.
Any business that depends on healthy advertising and promotion spending is on life support.
To take an example at random, sports events are beginning to wonder where the next big purse will come from. The Greater Milwaukee golf open, which was rechristened the U.S. Bank Open, will certainly go back to its old name now that U.S. Bank is on the government dole and will probably go away altogether. Lining up sponsors for these kinds of events when the sponsors have to borrow money to pay to get their names in lights is not working.
Trade and professional organizations of all kinds, sizes, and shapes are finding that their place on their members’ priority lists is at or below the cutoff line.
Worthy charities are suffering. The NY foundation that puts on a big annual dinner to raise money for research on Lou Gehrig’s disease canceled this year’s gala because its managers calculated that it would do no better than break even.
Do-good organizations are doing a lot less well, too. Now that those catalogue companies that haven’t run away altogether have run to the internet for sales, if it wasn’t for pleas from political, social, and economic advocacy groups and the regular stream of offers from Bank One’s credit card division, I wouldn’t get any mail at all.
This brings up the question of whether every dark cloud has a silver lining. Campaign spending hasn’t been put to the test yet. There have been no serious campaigns since the economy hit the wall, the super-rich became merely rich, and the nickel and dime donors’ piggy banks went on empty. Is there any reason to think that politics will be spared? At the very least, those candidates who have become accustomed to eight-digit campaign spending might have to scale back to seven digits, perhaps even the low-seven digits.
Too bad about that for the TV-ad addicted campaign managers, because the once-lush and mighty TV broadcasters have a lot of space and time they will be selling at bargain prices.
No one seems to know what the new economy will look like, but it is becoming increasingly clear that it will not be a simple reincarnation of the old economy. And the most important reason it will not is because of dramatic changes in our priorities.
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