Consumerism

By Sadaf Saghir · Saturday, Dec 17, 2011 4 Comments

The financial crunch of 2007, for us was something that our analysts and blog writers sharpened their analytical skills on. We read and wrote about notoriously brilliant Bernard Madoff’s Ponzi Scheme, Alan Greenspan, and at the end of the day we were just concerned about the disposable income we would have at the end of the month.

So leaving the twisted dynamics of Mad Wall Street, in the elevator, we go back home, to real life. The real life where we need to shop for grocery, get in line to get CNG and even petrol at an ever increasing rate. So how can one save money for a house or a new car?

In this state some would prefer to light a cigarette, some would resort to using the plastics (credit cards), as they call it. The credit card, is a classic example of borrow-and-buy, that eventually rips you off your ability to even afford the necessities of life; and people like me would find respite in eating.

While we sit and grab a bite, and see cars going by from the high end malls, there is a question that relentlessly bothers you, a day’s shopping spree is months of hard labor for many? The disparity in income is massive between various social strata that’s why designer’s accessories, can be an object of international debate, and a classy Birkin can stir quite a controversy (Hina Rabbani’s stylish hand bag).

Financial crises affects people as follows: they would have less money to spend on consumer goods, they would be indulging in careful decision making for even the groceries, they would fear that might be laid off from work they, so they would refrain from impulse buying normally, and they would put off the purchase of high valued items till later. This is very important, behavior pattern for businesses because they need to come up with goods that are durable and low valued.

In my opinion, there are few businesses that interestingly don’t get affected by financial crunch directly, whichever economy it is. Schools/Colleges, Hospitals and Food Retailers.

The reason probably is, that when there are limited opportunities owing to an unfortunate economic and financial situation, smart people turn to improve their education and skills so they can move abroad, even if that means cutting down on other necessities of life. In case of Hospitals and Food retailers, stress tends to make people sick and basic food is something a person needs no matter what is the situation.

Is consumerism as opposed to saving money, is a better choice? For an economy where there is insurmountable uncertainty, it is.

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