Gas prices & AmEx bills

Trip Start Jun 30, 2008
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Trip End Aug 24, 2008


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Flag of United States  , District of Columbia
Sunday, August 10, 2008

Every day I talk to people about the American economy. I notice a strong discontent amongst citizens I talk to, and a contempt for political leaders who are widely viewed as responsible for the economic standstill. However, my first question in any conversation about recession is about my observations as a foreigner. I notice large cars and lifestyles of luxury. I notice expensive clothes and many sport cars. I see packed restaurants and many advertisements for things nobody really needs. I see malls filled with hungry shoppers. How does this match an economic slowdown?

The people I talk to politely explain that my observations are one-sided. Americans are hit hard by rising oil prices. Although many people drive SUV's, not every owner can actually afford to drive to work every day. As a result the sale of second-hand SUV's has risen dramatically, plunging the value of these vehicles accordingly. Today I learned that some states are introducing four-day work weeks in order to limit fuel consumption.

During a conversation at the local Starbuck's, a friendly gentlemen explained to me that spending might be up, but I must also consider debts. Over 60% of all Americans are heavily indebted to creditors. This pressurizes long-term investments. As the gentleman explained: "with these rising gas prices and my AmEx bills, it is hard to set aside money for my daughters." College funds are hit hard, which will have a profound effect for many years. Also, our friend Jeff explained to me how hard it is to get a job these days. Although layoffs are rare in the DC area, national newspapers often write about corporate cutbacks. To families these setbacks must be small drama's.

At Georgetown we talked about the effects of globalization elaborately. Economic analysts expect that the US will be hit harder and harder by a smaller and flatter world. Some speak of the "rise of the rest". I believe most Americans will not look as far as new competitors such as China, India, Brazil and Russia. Instead they will turn to their leaders and ask what is going on. Indeed, Bush is criticized by most people I talk to on the street and his government does not seem to enjoy much confidence from voters.

I must end this post with an optimistic note. The people I talk to do not speak in terms of regret, but view the situation as a temporary setback. The determination to get on top of things is incredible. These are the fundamental character traits of this country. I'm sure Jeff would agree with me when I say Americans are full of hope and depressions don't get them down.
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