The subprime mortgage meltdown started around 2007, the last year I lived in the States. Economists believed the risk was contained to only subprime or the domestic house market. Since then we’ve seen big banks fail, investments plummet, and trillions of public dollars injected into banks around the world. We’ve learned about collaterized debt obligations (CDO), credit-default swaps (CDS), and a slew of other culprits in what amounts to the steepest recession since the Great Depression.
My only impression of the Great Depression came from American textbooks. I thought of it as a depression, a miserable time spanning a generation. Similarly, my feel for the current American recession was limited to what I’d read in newspapers. This was my first time in America during the biggest recession of my lifetime.
My goal for 6 weeks was to earn as many US dollars as possible. Before leaving Colombia, I secured a full time job serving and bartending. I also lined up retail promotional work for about 15 hours / week. Finally, I presented the same company a proposal for an e-marketing campaign (a four-figure deal), which was accepted.
I found so much work I gave up all my shifts my last week because I felt I hadn’t spent enough time with family and friends.
I worked 3 long weekends doing promotions inside Costco stores, one of the more innovative retail giants in big-box capitalism. I saw other deals at similar stores: Target, Walmart, etc.
The VitaMix Solution for $394.99 – This product was promoted in Costco stores. The Solution included a power blender, a disc, and recipe book to make your own juices. VitaMix demonstrated the product and handed out samples of the juice they made. The one I tried had pineapple, carrot, spinach, strawberries, and more. I couldn’t help thinking they’re selling a $400 blender during the worst recession since the Great Depression.
¼ pound hot dog + free refill fountain drink for $1.50 – Everyday in the Costco food court: ¼ all-beef hot dog with a refillable drink for $1.50. You couldn’t get that in Colombia or Peru.
Levi’s jeans for $19.99 at Target –The Levi’s brand suffered overexposure in America during the 90s, but it’s a top quality brand internationally and especially in Latin America. I’ve seen Levi’s and Wrangler jeans retail for $60 – $100. The ones I got at Target didn’t have that red tab on the butt, but they’re classic dark Levi’s nonetheless for $20.
City Museum’s best year to date was 2009 – Friends who work at the City Museum told me their best year was the last one. Something had changed though. They often heard from tourists from Missouri or Southern Illinois that they usually go to Florida. But with the economy, they decided on a road trip to St. Louis.
I noted St. Louis is an inferior good to Florida. When a product sells better in a down economy, it’s defined an inferior good. Busch beer, Wal-Mart, and vacations to St. Louis are examples of inferior goods.
PBR: $2 pints at Fitz’s, $1 16 oz cans at Delmar Lounge – Pabst Blue Ribbon was never at these two places. One now carries it on tap and the other in a 16 oz can. The increased distribution isn’t due to branding ground gained; Delmar’s been a PBR natural habitat for a long time. These places chose not to serve it before, but PBR is also an inferior good.
High-end marijuana and vaporizers – My smoker friends have abandoned cheap marijuana. Everybody pays $50 for 1/8 ounce of super-potent marijuana. Things apparently aren’t so bad to sacrifice in this category. One health-conscious friend ordered a vaporizer so he could vaporize his marijuana instead of smoking it. They’ve become popular in California in a new legal industry sprung from the state’s legalization of medical use. This gadget provides for a smoke-free THC high.
Restaurant food costs & revenue – The restaurant where I worked had changed the burgers from an 8 oz patty to 7 oz, while standard price increases kept with inflation.
Labor costs – The same restaurant runs a leaner operation than before. Former management subscribed to the TGIFriday’s school of using lots of staff. However, when sales are significantly down, cuts must be made to stay profitable. The floor managers won bonuses by achieving their goals in cutting labor costs.
When the economy returns to growth, the restaurant will have gotten stronger during the down-time. I now look at recessions as belt-tightening seasons and opportunities to cut fat, rather than misery and depression.
Unemployment – A couple family members are out of work. Recessions and their impact on quality of life aren’t so bad so long as you don’t lose your job. But they’re still doing fine.
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