Things I have recently read, heard or seen
During this pandemic, we have all read, heard or seen many new things. Here are a few of mine.
I can sort of understand people being on their cell phones when they are out for a leisurely walk. What, for me, I can only describe as a visual oxymoron is seeing people out for a run or a bike ride stop in order to get on their cell phone. Now I realize that a really important message may be coming in, but I see it happen far too often for that to always be true.
We have talked about the bike boom in the United States. It turns out that there is also one in Italy, famous for its high-end bicycles. According to reuters.com, since May, when shops reopened, there has been a 60% increase in sales compared to the same period in 2019.
When it comes to unique and amazing shopping bargains, I have often said, “Unfortunately, all good things come to an end.” Two examples come to mind for me. A store in Soho in New York City sold braces (suspenders) for $5 each, many of which were silk braces that sold at retail for $145. I have a lifetime supply. The owners of the business, who also owned the building, said that they obtained these from surplus supplies in a warehouse in Brooklyn. They closed the store when they received an offer to rent the building that they could not refuse. The other bargain was a store in the garment district in New York City. It sold caps for $5 or less, including all kinds of great rock-group caps. I don’t know why it closed. I have a lifetime supply of those too.
Now, after 30 years, the Ronald McDonald House Sales have come to an end. I can honestly say that I never went to one and came away empty. I felt that I was helping the charity, but definitely getting some amazing bargains. My best bargain (I feel like Mary Chao) was a lightly used silk Hickey Freeman tuxedo, which still fits me perfectly, that I paid $12 for. I can’t even guess what it cost at retail. I am sure that many of us will miss those sales.
Here is a shocking report that I have not heard any follow-up on — the IRS sent $1.4 billion in stimulus payments to dead people. You can do some research on the subject of what the IRS should or is doing about it, but believe me, it will just make you shake your head. The cable television media beats to death so many stories these days, but, for some reason, not this one. Can decedents’ estates cash the checks, are some of them joint checks, are family members fraudulently endorsing and cashing them? Am I the only one who would like to hear more about what the federal government is doing about this?
We are all aware of the balancing acts that governments are dealing with during the pandemic — how to open the economy and also protect the public health. One of the Marketplace segments on NPR reminded me about how we are experiencing Economics 101 — The Paradox of Thrift. The theory was popularized by the economist John Maynard Keynes. Basically, it states that people try to save more during an economic downturn, which leads to a fall in demand and, therefore, a fall in economic growth. As we have discussed, as individuals we need to strike a financial balance — save, but also help the economy by helping businesses and not-for-profits that need help.
I want to end with some things to think about that were discussed in a recent Hidden Brain segment on NPR on credit and debt.
• Referring to credit cards, it was said that we are on a debt binge, buying things that we don’t need, with money we don’t have. Sound familiar? It was likened to the old saying that the best way to deal with a hangover is to stay permanently drunk.
• The term Home Equity Loan did not even come in to existence until the 1980s. Marketers realized that it was a much more positive concept than the term second mortgage. After all, you have equity in your home, and you can put it into good use!
• In my CARE financial literacy presentations, I always say that debt, especially student loan debt, is a bet on future income, and it is important to make a really good bet, so be businesslike in analyzing your reasonable and likely future income. Today, with the experiences of the Great Recession in 2008-2009, and the current recession, people are focusing more than ever on whether they are making that good bet when it comes to debt.
• One of the things that we are talking a lot about because of the pandemic and the recent protests is the issue of income inequality. The question comes up as to how is it that there is so much money out there that so many people can borrow on credit cards, seven-year car loans, and more. It is because the very wealthy, in the US and globally, have more and more savings that they can’t possibly spend, so they need a return on those savings.
• Whatever religious and cultural aversion to debt, especially basically unaffordable debt, that there may have been in the past is not being reinforced today in our debt-is-ok, hyper-consumer, marketing-based culture.
Finally, you can’t make this stuff up. There is a 2009 movie, “The Joneses.” A family moves into an upscale neighborhood, but the reality is that the wife is part of a professional product placement marketing team put there to do research. Eventually, they perfect their fake family lifestyle dynamic to recommend and sell more of their products. It’s fiction, but an interesting version of the story of keeping up with the Joneses. I may have to get Netflix to see it.
John Ninfo is a retired bankruptcy judge and the founder of the National CARE Financial Literacy Program. Find his previous weekly columns at http://www.mpnnow.com/search?text=Ninfo or at http://www.monroecopost.com/search?text=Ninfo.