New Standard of Living?

The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions.

Or Just a National "Bad Patch?"

This morning at breakfast, I read portions of an article from today's "New York Times" aloud to Pat. Typically, she doesn't like when I do that, but this one compelled her. It was all about how, regardless of whether or not we're in a recession in the United States currently, people seem to be "tightening their belts."

The last lines of the article put a lump in my throat, until I spoke with my mother this evening about them. They described a grocery store cashier, who bought a lesser brand of steak sauce, at 85 cents a bottle and poured it into the A-1 bottle, saying that her husband couldn't tell the difference.

"Did you take Economics, Sarah?" asked my mom. "Unless there's real differentiation among products, there's no reason to buy the brand-name version."

"Why did I buy Armani yesterday then?"

"Because there's product differentiation with Armani. It's a better brand."

Inspiration While Showering

Shortly after we hung up, Pat, who was cleaning up from our rock-hauling exercise, said, "I was thinking more about that article in the shower. We're probably starting to have a lower standard of living, and we're probably not going back; as the rest of the world wants more, like I was saying about eggs the other day, there's a re-distribution, and we probably won't have what we've been having forever."

"The same article talked about a woman, buying the house-brand of Lucky Charms cereal," I said, and, "Do you remember in the '70s, when everyone was buying the generic brand of foods?"

"Yeah, and we were kind of into it -- the black and white, generic labels."

"Yeah." Still, I wonder, if like the '70s, this is just a bad patch, and we'll bounce back. Pat suggests not.

Pat's point is about supply, and about how more of the world is earning the money to buy the supply. She has also used the same logic for why globalization is great -- because as more people get better work, more people will have the means to buy all of the products and services that are being produced.

And she has spoken nervously about our gross energy consumption compared to the rest of the world's and how if we think gasoline is expensive now, just wait till more people around the world can afford cars.

Farming Might Be in Our Future

We're thinking of growing tomatoes in our emerging garden -- the one we hauled the stones to in the backyard earlier today -- because Pat just heard that fewer farmers in New Jersey are able to grow tomatoes profitably, and their price is likely to rise accordingly. "Maybe," said Pat to our neighbors Meg and Ellen, as all of us stared at the bare patch, where the garden will go, "We'll return to being an agrarian society...." Everyone, which included a chiropractor, a former higher ed. CFO, and two IT industry workers, smiled.

Years ago, I learned the phrase, "abundance mentality," and I concluded that it was how I needed to approach the world. Instead of worrying about a limited supply, I needed to believe that reasonably responsible use of whatever the supply, plus creativity and ingenuity, always would yield relative abundance.

Of course, I didn't study Economics....