{"id":8031,"date":"2008-10-24T17:06:22","date_gmt":"2008-10-24T22:06:22","guid":{"rendered":"http:\/\/blog.jackjia.com\/?p=8031"},"modified":"2008-10-24T17:06:22","modified_gmt":"2008-10-24T22:06:22","slug":"20081024%e8%8a%82%e4%bf%ad%e7%94%9f%e6%b4%bb%e5%8f%af%e5%90%a6%e4%b8%ba%e6%88%91%e4%bb%ac%e5%b8%a6%e6%9d%a5%e5%81%a5%e5%ba%b7%e5%92%8c%e5%bf%ab%e4%b9%90%ef%bc%9f","status":"publish","type":"post","link":"https:\/\/blog.jackjia.com\/?p=8031","title":{"rendered":"20081024\/\u8282\u4fed\u751f\u6d3b\u53ef\u5426\u4e3a\u6211\u4eec\u5e26\u6765\u5065\u5eb7\u548c\u5feb\u4e50\uff1f"},"content":{"rendered":"

Living on less <\/strong>
\nTimes are tough, but could the new frugality make us healthier and happier than we\u2019ve been in years?<\/p>\n

COLIN CAMPBELL AND JASON KIRBY | October 22, 2008 | <\/p>\n

A few years ago Kelly Hollingsworth could have been described as a woman who had it all. A young money manager living in the U.S. Virgin Islands and then New York City, she was part of a small team that managed a multi-million-dollar hedge fund, pulling down a handsome salary for her efforts. She lived a life of excess seemingly ripped from the script for Sex and the City. \u201cI had this income so I dressed a certain way,\u201d she says. \u201cI was taking private Pilates lessons four days a week, private opera lessons three days a week, there were manicures, pedicures, facials, Botox and nutritionists.\u201d Even then it all felt a little unreal, says Hollingsworth. \u201cOccasionally I felt like I wanted off the ride.\u201d<\/p>\n

Then at the end of 2006, the partners closed shop. Out of a job, Hollingsworth packed her things and moved to Coeur d\u2019Alene, the sleepy city in western Idaho where she grew up. If life as a hedge fund manager meant having heaps of money but barely a minute to stop and smell the proverbial roses, her circumstances were now reversed. But as Hollingsworth adjusted to her new, slower lifestyle, she began to appreciate its subtler pleasures. Such as time. What Hollingsworth had wanted to do during her hedge fund days was write. And so she sat down and penned her first novel, Soup in the City, a sort of anti-SATC clarion call for happy, frugal living.<\/p>\n

Her timing couldn\u2019t have been better: the book, which came out a few months ago, could be a chick-lit anthem for thousands in Hollingsworth\u2019s industry who find themselves facing a similar downshift, one they didn\u2019t choose. The book follows the life of Avery St. George, a well-paid but aimless Manhattan girl whose pursuit of an A-list lifestyle leads her to splurge and fall heavily into debt. When Avery suddenly loses her lucrative finance job amid the economic slowdown, she\u2019s forced to adjust to a simpler life. In so doing she awakens to its joys, much as the book\u2019s author did. \u201cOne of the happy discoveries of not having people pay me for my time anymore is that I get to do anything I wanted,\u201d Hollingsworth says. \u201cYou start connecting to the basic things we all find pleasure in, like making homemade soup. When you\u2019re making a lot of money, it\u2019s almost fiscally irresponsible to waste time doing those things. You say, \u2018I can\u2019t afford to make soup, I make $300 an hour\u2014my time is worth too much.\u2019 \u201d It may have been a useful lesson: now even if Hollingsworth wanted to go back to her high-earning, big-spending ways, she couldn\u2019t. \u201cThere are probably 30,000 people just like me out on the street looking for a job today,\u201d she says. \u201cThat\u2019s a little scary.\u201d <\/p>\n

The economic crisis that\u2019s spreading around the globe like wildfire through a dry forest is scary. Even level-headed economists are scratching their heads and wondering what the long-term fallout will be. \u201cIt\u2019s historic and it\u2019s global,\u201d says Sherry Cooper, chief economist of BMO Capital Markets. Banks are not only unwilling to loan money to each other but cutting off even credit-worthy individuals in search of mortgages. \u201cConfidence has been just slashed, no one knows how this will work itself out,\u201d says Cooper. There\u2019s a growing sense that our lifestyles are about to be dramatically transformed. For the first time in as much as half a century, a new, \u201cfrugal future,\u201d as some economists have come to call it, seems all but inevitable. \u201cFrugality is now replacing frivolity,\u201d declared Merrill Lynch economist David Rosenberg. Households are about to be put on a radical diet; debt is a dirty word again, and living within one\u2019s means could soon be a fact of life.<\/p>\n

But even beyond a deep economic recession, there are signs that meaningful social change is brewing. As environmental fears push us from Hummers to hybrids, and a younger, tech-savvy generation rebels against the \u201cBigger is Better\u201d boomer mantra, a long-overdue cultural shift could be in the works, say observers. It may all be culminating in a kind of \u201cperfect storm\u201d that pushes us into a new age of post-materialism, says David Grusky, a sociologist at Stanford University. \u201cPeople are becoming disillusioned with material excesses spawned by the vast run-up of wealth and income.\u201d And therein lies a potential silver lining. This financial crisis may be the equivalent of Buckley\u2019s cold medicine\u2014awful tasting, but good for what ails us financially and spiritually. In fact, a simpler, pared-down and debt-free lifestyle just might make us happier and healthier than we\u2019ve been in years. <\/p>\n

Last month, Dan Towbin, the man behind the reality TV show King of Cars, announced he was closing his Las Vegas Hummer dealership, the only one in town and one of the largest in the country. \u201cIt\u2019s all about bling and it\u2019s in the desert,\u201d was how he described it in the Wall Street Journal. Las Vegas may have seemed a perfect fit for the behemoth truck. But nowadays even in Sin City people are thinking that driving around in what is effectively a tank may be a little over the top. In what is surely a signal of a cultural shift, Towbin, a rotund John Waters lookalike, now has plans to open a Smart car store.<\/p>\n

Signs of people scaling back are everywhere. In Canada, consumer confidence has dropped to lows not seen since the early \u201980s. In the U.S., it\u2019s at historic lows, suggesting people are planning to keep their wallets tucked ?rmly in their pockets. Spending on the upcoming holiday season is expected to be the weakest in over 15 years, says a report by Deloitte Research. Until recently, sales of LCD televisions seemed to play a disproportionate role in propping up the U.S. economy. Now, according to the Consumer Electronics Association, spending on televisions, computers, and cellphones is slowing dramatically. Big U.S. automakers have seen double digit declines in sales, and polls show sales of luxury goods dipping to record lows. Even those who might once have bought a fully loaded, $62,000 Cadillac CTS are now opting for the stripped-down $40,000 version or a used model, says Andrew Lennox, director of sales at Roy Foss Motors in Thornhill, Ont. RE\/MAX admits there\u2019s \u201ccause for concern in the immediate future\u201d in the luxury-home market in Canada. <\/p>\n

\u201cFrugal is the new black\u201d is the refrain in fashion circles these days. Aldi, a discount supermarket, recently started selling a $50 two-piece pinstripe suit in the U.K. According to reports, the so-called \u201ccredit-crunch suits\u201d are flying off shelves. In L.A. and New York, vanity has taken a hit. A growing number of men and women have opted to forego plastic surgery and $1,600 Botox treatments, according to the American Society for Aesthetic Plastic Surgery. Its poll of members found some had seen as much as a 30 per cent drop in business over the past year. As one witty headline writer put it, \u201cAs Economy Sags, So Do Faces.\u201d<\/p>\n

In the boom times of the past decade or so, people spent freely on everything from bottled waters to $300 jeans and designer sneakers. Sociologist Juliet Schor, in her book The Overspent American, dubbed this a \u201cculture of upscale spending\u201d in which middle-class types were driven to spend as if they were in income brackets three to ?ve times higher than their own. Now, says John Lastovicka, a professor of marketing at Arizona State University, who studies frugality, we\u2019re likely to see a return to some long-forgotten virtues: self-restraint, thrift. Never mind brown-bagging lunches, people may reuse everything from gift wrap to zip-lock bags. Libraries are likely to become more popular. \u201cYou don\u2019t have to belong to Netflix to watch movies. This is your tax dollars at work,\u201d says Lastovicka. \u201cA lot of these things aren\u2019t necessarily fashionable. And on their own they don\u2019t add up to big savings. But someone who does hundreds of these things will see it add up.\u201d<\/p>\n

The social effects of scaling back could go well beyond our pocketbooks. Divorce lawyers in the United Kingdom say the slowdown in the economy is forcing couples on the outs to muddle through the tough times together. It\u2019s not only the lawyers\u2019 fees that are making divorces prohibitive for some; splitting up means each side suddenly has to pay full price for bills, rents and mortgage payments.<\/p>\n

This kind of downsizing represents a dramatic shift for a culture that has known little but steady progress for the past 50 years. Until recently, each generation since the Second World War was richer than the last. Houses have gone from simple two-bedrooms in the burgeoning suburbs of the \u201950s to the McMansions of the \u201990s. Everything from cars to food went \u201csupersized\u201d\u2014and along the way, so did waistlines. Notwithstanding the recession of 1991 or 2001, and minor disasters, like the savings-and-loans crisis of the \u201980s, for the average person, this has been an age of prosperity\u2014framed not so much by an impetus to keep up with the Joneses but by a full-on acquisition arms race for a higher standard of living. <\/p>\n

The \u201cbigger is better\u201d mentality was bred in the bone of the baby boomer generation. Their parents had lived through the dark days of the Great Depression, when frugality wasn\u2019t a lifestyle choice but a means of survival. For the young boomers, though, the \u201950s were a golden time to grow up, says Howard Smead, a history professor at the University of Maryland and author of Don\u2019t Trust Anyone Over Thirty: The First Four Decades of the Baby Boom. In the decades to come, cars got bigger, and faster; fuel efficiency levels improved little over the decades\u2014they didn\u2019t need to. Incomes rose, and with the advent of easy credit, people could afford not just bigger houses, but more stuff to put in them. It wasn\u2019t a surprise to see a typical factory worker with a boat in his driveway, says Smead: \u201cWhen you grow up in that environment, you think the world owes you a living.\u201d<\/p>\n

But as early as the 1970s things began to plateau, says Smead. Between 1980 and 2001, the average size of homes in the U.S. ballooned to 2,100 square feet, from 1,600, yet income levels changed little, according to economist Robert Frank. At the same time consumer debt climbed dramatically and the income gap between the richest and poorest grew into a chasm\u2014historically, a sign of a society on the decline (and occasionally a precursor to revolution). As manufacturing and industrial jobs declined, they were replaced by service jobs\u2014and many of those were tied to consumer spending. That\u2019s why in the wake of the Sept. 11 terrorist attacks President George W. Bush called on Americans to go shopping, lest the terrorists win. And shop they did. In fact, even earlier this year, when the U.S. government mailed taxpayers rebate cheques as part of an economic stimulus package, it was in hopes of encouraging consumers to spend. This time around, though, consumers are in no mood to shop. <\/p>\n

For years, some economists have warned the postwar Age of Excess was unsustainable\u2014built on a vicious cycle of spending and borrowing. The Wall Street crisis, which has ground to a halt that access to easy money, has helped pull back the curtain and show just how right they were. \u201cThe growth-for- growth\u2019s-sake economy is what we\u2019re seeing in the market, which is more like cancer than it is an economy of well-being,\u201d says Mark Anielski, head of the Alberta-based consultancy Anielski Management, and author of The Economics of Happiness. Anielski, who also teaches at the University of Alberta, argues it\u2019s time to think about economic well-being as more than consumer spending data. The wealth of a community should be measured on a host of indicators, from the environment and infrastructure, to crime, education and affordable housing. \u201cRight now we\u2019re measuring progress on what we buy and sell, which we measure by GDP.\u201d But, he adds, \u201chow much you spend does not necessarily correspond with happiness.\u201d<\/p>\n

We may finally be waking up to that reality. \u201cA new generation of households, businesses and banks will now have fresh and vivid memories of a financial crisis,\u201d said Dominique Strauss-Kahn, the managing director of the International Monetary Fund in a recent speech. \u201cThey will be more cautious and take fewer risks.\u201d The result could be a deep and lasting shift away from decades of overindulgence.<\/p>\n

While we may be slouching toward the financial equivalent of Armageddon, it\u2019s not all bad news. Many people readily embrace the slowdown as an opportunity to take, as Hollingsworth puts it, \u201ca break from being jaded, unsatisfied and disdainful.\u201d Some go even further. The new frugality is dovetailing perfectly with a host of grassroots movements that caught fire in recent years, going by such labels as small living, voluntary simplicity and slow food. \u201cThere are lots of people who have checked out of the matrix, so to speak,\u201d says Anielski.<\/p>\n

Jay Shafer is one. His company, the Tumbleweed Tiny House Co., sells small, pre-built houses and plans, and he lives in one of these: a 400-sq.-foot house on wheels parked in an apple orchard in Sebastopol, Calif. His home has a gabled roof, a kitchen, a bedroom, a living room\u2014in style and substance it\u2019s every bit the typical American house, only miniaturized. Shafer can\u2019t think of anything he lives without. He has an entertainment centre\u2014his laptop\u2014and a surprising number of clothes. Far from being a hardship, living in a mini-home has very big benefits, he says. No mortgage, for starters. <\/p>\n

In this time of economic chaos, Shafer\u2019s lifestyle isn\u2019t just pleasantly curious, it\u2019s enviable. And increasingly, it\u2019s going from the pages of architecture magazines to the mainstream. Before the slowdown, Shafer sold just one home a year over several years; this year he\u2019s sold 50 sets of plans and five completed houses (at a cost of $35,000 to $80,000). A recent promotional trip down the West Coast of Canada and the U.S. drew crowds, he says. That growth is due to \u201ca convergence of ideas and concerns that people are collectively having,\u201d says Gregory Paul Johnson, a computer technician at the University of Iowa who heads the Small House Society in Iowa City. \u201cIt\u2019s concern about the economy, concern about our connection with the environmental crisis and the impact of that on our homes, and then it\u2019s just a desire for a more meaningful simple life.\u201d And, of course, it saves a lot of money.<\/p>\n

For the environmental movement, the new frugality could be a big shot in the arm. In a recent report, Mark Lewis, an analyst with Deutsche Bank, said a recession could cut Europe\u2019s industrial carbon dioxide emissions by 100 million tonnes in 2009, compared with 2007. Reduced demand for large vehicles could help cut vehicle emissions, as could the slowdown in air travel. And reduced spending will cut the amount of junk we throw out. The financial crisis is likely to overtake the environment as a major political issue, as happened during the recent Canadian election, but the effects of lower consumption could actually achieve more than all of Al Gore\u2019s finger-wagging. <\/p>\n

It\u2019s not just the planet; it turns out when times are tough and unemployment is on the rise, people actually get healthier too. It sounds counterintuitive, admits Christopher Ruhm, an economics professor at the University of North Carolina-Greensboro, a researcher who has conducted several studies over the last decade into the phenomenon. But his research has found people tend to dramatically overhaul their lifestyles during economic downturns, for the better. \u201cThis goes against what people might first think, but my work has found that when an economy weakens people are less obese and exercise more. They drink less, smoke less, and have healthier habits than when times are good.\u201d For instance, in a 2000 study Ruhm found that a one per cent rise in unemployment reduces the mortality rate by 0.5 per cent. There are a number of factors at play. For one thing, when an economy booms, smog levels typically rise, leading to an increase in coronary heart disease. Roads get clogged with transport trucks and commuters, and traffic fatalities rise. A downturn slows the economy, but also all of those side effects. It\u2019s worth noting that California has seen a significant drop in highway traffic around its major cities as a result of soaring gas prices.<\/p>\n

People in the midst of a recession eat out less and generally exercise more, says Ruhm. One explanation is that in uncertain job markets workers feel the need to stay free of illness. Or it could just be that they\u2019ve got spare time on their hands after getting their pink slips. Ruhm cautions that his research only looks at the physical impact of downturns, and not the mental and emotional consequences. And he says an economic slowdown is no health care substitute for sustained income growth over a long period of time. Even so, research by Ruhm and others is leading many to question long held beliefs about the pitfalls of recessions.<\/p>\n

For a younger generation, a shift of this kind may prove more painless. In fact, their values and attitudes toward money, work and the environment may be helping to drive the change. Eric Meerkamper is a partner at the youth research marketing firm Decode in Toronto. More than having a house and a nice car, he argues, young people value having balance in their lives. \u201cThey still want more but not in [terms of] accumulating things necessarily,\u201d he says. Money is important, yes, but work is seen more as \u201can enabler to living a full life,\u201d he says. Smead, the author of Don\u2019t Trust Anyone Over Thirty, believes people in their 20s, have come to realize they won\u2019t have the same standard of living as their parents, resulting in lower expectations. In short, he says, \u201cthey\u2019ve got a more realistic view of the world economically.\u201d <\/p>\n

\u201cI don\u2019t think the American Dream of owning the biggest car is contributing to a higher quality of life,\u201d says Dominic Mishio, a political science student at the University of Alberta who, at just 23, is a city of Leduc council member. He has a mortgage and sparingly uses a credit card, but thinks of himself as a \u201cconscious consumer\u201d\u2014an attitude that may not be shared by the Alberta oilmen he knows, but among his classmates is a fairly typical view. \u201cWhat is progress? To make another $1,000 a day or to have another day off?\u201d he asks.<\/p>\n

The real losers will be those boomers who never foresaw an end to the prosperity. Many were sold on the promise of a retirement spent in the Caribbean. But with meagre savings tied up in shrinking markets, that\u2019s looking like a pipe dream. The current crisis already has the over 50 set on edge. There\u2019s a lot of anxiety out there, says Susan Eng, of Canada\u2019s Association for the 50 Plus. If the housing market crashes as it has in the U.S. it will spell \u201cbig trouble.\u201d
\nBut it\u2019s not a surprise, really, that some boomers resent the idea they might have to scale down their expectations. \u201cIt\u2019s hard to tighten your belt when your formative experiences were all about increasing affluence and optimism,\u201d says Smead. \u201cThe anger at Wall Street today is a boomer phenomenon. It\u2019s the people who now have diminished expectations looking for people to blame.\u201d <\/p>\n

There\u2019s plenty to go around. As folks tighten their belts, it\u2019s hard to miss the seething backlash against the wealthy (especially bankers, the scapegoats for the world\u2019s economic troubles). In the U.S., the crisis is repeatedly framed by politicians as a class war between \u201cWall Street\u201d and \u201cMain Street.\u201d In Britain, \u201cEat the Rich\u201d has roared back to life as a popular refrain. Much of the blame there is levelled at \u201cCity Boys\u201d (the U.K. equivalent of Bay Streeters), who lived large, all the while sowing the seeds of catastrophe. Deutsche Bank recently informed managers it would no longer pay for visits to strip clubs. \u201cDeutsche Bank does not approve of any adult entertainments, and such expenditures will not be reimbursed,\u201d said a memo obtained by the German magazine Der Spiegel. \u201cThe mood of the super rich is going to change during the next year from \u2018How To Spend It\u2019 to \u2018How Not To Flaunt It,\u2019 \u201d wrote Christopher Wood, an analyst with CLSA, in his newsletter Greed & Fear. \u201cCertain people, particularly the Russians, have not got the point yet. But the backlash is undoubtedly coming.\u201d<\/p>\n

But the lessons aren\u2019t just for the rich. \u201cWe have all gone to this temple called money,\u201d the British archbishop of York said recently, speaking to the trade group the Worshipful Company of International Bankers. \u201cWe have all worshiped at it. No one is guiltless.\u201d Perhaps the time has finally come to repent. <\/p>\n

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Living on less Times are tough, but could the new frugality make us healthier and happier than we\u2019ve been in years? COLIN CAMPBELL AND JASON KIRBY | O…
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