Frugality as a Recession Fighter and Depression Killer (L-O-N-G)

I’m going to turn back the clock on life in the United States to shortly before the 1900’s—the Victorian Era in Europe was alive and well, people were thriving and prospering, and culture was growing by leaps and bounds. That same era slowly made its way to us in the form of preferred dress, preferred morals, a gold rush, and a wild west that proved to be the engines of growth and prosperity for our own nation. Inventions and inventors sprinkled the landscape like fine dust, creating everything from the mechanical to the medical, and a lot in between.

England no longer had a debtor’s prison by this time, but lots of families had or knew of at least one member or friend that spent some time there, and children often grew up having one or both parents incarcerated. This may have been their only financial lesson about debt.

The U.S also had debtor’s prisons, but largely abandoned them as well after England abandoned hers. A few remained for all but federal debts—things like unpaid child support, alimony, or fraud. The sentences normally lasted only six weeks, but the shame lasted a lifetime.

This encouraged the use of thrift and frugality. People saved as much as they could, and spent as little as they could for fear of owing somebody and ending up in debtor’s prison. Fashions and furnishings became symbols and clues to wealth, with multitudes of ruffles, feathers, jewels, colors, and layers for clothing, and the most prized woods with the most ornate carvings (all done by hand, of course) for the well-to-do, paid for in cash, while plain, black, and ambiguous was the name of the game for the common man—think Puritan or Amish here.

Back in those days, everything was custom-made, and people often downgraded their wardrobes in order to save even more money—fewer ruffles, fewer frills, duller colors—sending signals to then-current society that some sort of misfortune beset them and their families, and occasionally encouraging sympathy from others. Because everything was custom-made, it cost a pretty penny for the day, and was paid for in cash. But what was inside the home often told the real tale: richly-carved pieces shipped in from the east coast, and lots of them—every room (and there were lots of those too) had some sort of carved piece in it, from bed frames to china closets. Even the humble washstands got the carving treatment!

Conversely, the inside of a home sometimes told the other story: straight lines and surfaces devoid of ornamentation, and the complete opposite of what the wardrobe depicted. Keeping up appearances to the public happened even back then, but the smart ones simply chose function over form.

This was only the well-to-do side of the street, but there was another side, especially for this country: the Wild West. We all pretty much remember those days thanks to books and TV shows depicting everything from prairie life to the gold rush to rip-roaring gun battles in the street.

The gold rush turned many a modest life into prosperity, and planted the seeds of barons and princes of industry and commerce. It also turned some into beggars—all because of where, when, and how they spent their wealth.

This ushered us into the Roaring Twenties, where the seeds that were planted in previous times grew and flourished, turning inventions into industries, and barons into magnates. Times were so good, a lot of “grasshoppers” got made during these times—people who lived for today, thinking this time would never end. But right over the horizon was the Great Depression, and many “grasshoppers” got turned into beggars once again, hanging on for dear life, while those who “ants” saved and sowed during prosperous times managed to survive this period with their dignity intact.

This is essentially what is happening today, and has been happening for decades: many are being turned into beggars (or worse) because of bad spending and saving habits. While the frugal lived simply, relying on necessities, they saved plenty of money to see themselves through what was commonly thought of as bad times, but were actually not. Today, we have every TV, newspaper, and internet site telling us how bad things are out there, but are they really, and for whom?

It’s bad times for the beggars among us—the grasshoppers who lived for today (through instant gratification) and didn’t put anything away for winter (winter being an expression of bad times, not as a season).

Those of us who lived frugally, even when times were good and great, are now able to pick the juiciest fruits from the trees of goods and services because we saved for this time—the harvest before our winter, if you will.

Now every TV channel and news publication is trying to tell us how to handle our failed finances, and that we should hang on and not sell off. For too many of us, this is the only lesson in finance we will ever get—this, and when Suzy Orman says on TV that you can’t afford to buy it, whatever “it” is.

Meanwhile, those of us who saved and kept our powder dry, it’s an absolute bonanza out there—stocks are cheap, merchandise is cheap, property and homes are cheap, and financing for the credit-worthy is about to get even cheaper than it is now. This is the time beggars should be buying because everything’s so affordable, but no—they lived for today yesterday and now they’re too broke to take advantage.

We savers can now afford to stock up on necessities to see us through the inevitable “worse” time that follows a “bad” time—the coming hyperinflation that usually arises when the nation’s financial belt has been loosened to the point of pants falling off. Beggars will find this point in economic time extremely hard, and many will likely die as a result of their previous excesses—just like the grasshopper in winter.

Stocking up will be a necessity in itself, because few of us will be able to afford common, everyday items we used and came to depend on regularly, and even fewer will have a way to get to those items. Convenience will become the new shame, as will the frills, novelty, and sparkle that helped to separate rich Victorians from their lesser neighbors.

You can’t sell off frills and sparkle when the going gets too tough, because there won’t be any buyers--ever try to eat a granite counter top? It can, however, be bartered, but at great loss—the value of everything will have collapsed into near-nothingness except those items we will deem essential to a frugal life. Only those will hold some sort of value in the eyes of those wanting it.

Now just think for a minute—if everyone were to become “ants” instead of “grasshoppers”, this country wouldn’t be in the position it finds itself today. Everyone from individuals to families to corporations to governments would be saving for their winter, and spending during that winter, making recessions and depressions largely a thing of the past. It would also serve to reset market rates and the perceived value of goods and services, making for a more affordable world for everyone that’s grounded in reality, and not the fictionalized financial world based on any number of phony values, phantom gains, and illusions of worth such as the world we live in today. We live in a low-tech version of the Matrix, and the blue pill is embedded in all our DNA, and the only person even close to representing Joe Sixpack is Keanu Reeves.

Today, bling is king until you go to resell it--then bling will be nothing. We were in the modern version of the Roaring Twenties, but are now entering the Great Depression all over again.

Let the grasshopper and ant story be your greatest nugget of financial wisdom: save when times are good so you have plenty of reserves to use when times are bad. Use your reserves when times are worst, so you won’t experience a winter of your discontent. Don’t become another dead or dying grasshopper—we have enough of those in this country, and they helped to bring this nation to its knees.