The Paradox of Thrift

Two members of the press at work…

By Gunnar Heinrich | IMG The Flagellants by Pieter van Laer

THERE’S a lot of loathing of self and others happening in the media at present.

I’ll explain how this pertains to cars in a sec… 

Much of their vitriol has to do with money; the lack of it for some; the depraved squandering of it for others. For most magazines and newspapers and their salaried staff, it’s definitely the former. 

Average advertising revenues fell faster in 2008 than Chrysler’s December numbers which means that executives at every business that makes dough by printing hardcopy – from the New York Times to Vogue to Car & Driver - are casting people off left and right. And like any good ship captains, these corporate heads make sure that they’re the absolute last to leave a sinking ship. 

So understanding that the fourth estate is lacking a foreseeable future, what entitles you or anyone else to have one, either?

 
Ad nauseam it’s this restaurant failing or that auto franchise going bust. And how you should all be really, really worried because this recession, did we say recession? – depression – deepens and darkens by the hour.

The obsessive navel gazing and blue faced ranting has morphed into flagellation of the kind not seen since the Counter Reformation. 

Case example: that darling of society and pop-culture mags, New York. Their Daily Intel blog sniffed that “Reporting for the Rich Just Ain’t What It Used to Be.” 

“In September 2007, when I was making $30,000 a year as a reporter at the New York Post, I found myself doing 90 mph in a $412,000 Rolls-Royce Phantom Drophead Coupe [...]As I slowed to cruise through Times Square, pedestrians started taking pictures. ‘They think you’re an heiress,’ the car rep said [...]But today, our frivolous lives of pretend luxury have seemingly come to an end.”

Oh! So sad!

But on to the real point. All this jabber about financial end of days and how we mustn’t think of luxury in a time of crisis is complete horse pucky.

It’s true that touting wild expenditure now is like asking a reveler suffering from a hangover to down a geraboam of Cristal. But saying that it should never happen again is like saying don’t recover with a nice cool glass of freshly squeezed OJ and some asprin – just die. Lay there and die in self pity and misery you reveler, you.  Needless to say, it’s bad for the reveler, his hang over, and everyone else around him.

The Wall Street Journal has it right.

In a recent story, “New Frugality Worsens Downturn” that focused middle America’s low and middle income earners,  the WSJ highlighted what economists call “The Paradox of Thrift;” that in financially troubling times people withhold their spending just at the moment that the very economic system they rely on needs them to keep spending. This concept pertains to the well to do, too.

In short, the economy is suffering from an auto-immune disease that the negative press is feeding with its scaremongering. It has the rich playing low key and the middle and lower incomes hanging on to what’s theirs for dear life. 

THE PERFECT EXCUSE 

The “bad economy” becomes an excuse for everything, when the route causes may be something else entirely. Low volume companies with once sure customer lists like BMW and Bentley are finding this the perfect occasion to slash their bottom lines – despite years of profit.

Employees, often hard working and loyal, are the first item on any budget that needs trimming. 

Consider the comment a YouTube viewer left on our interview with Aston Martin CEO Ulrich Bez. 

“Dr. Ulrich Bez is [a] very likeable person, I have seen personally a few of his meetings in Aston Martin factory in Gaydon. Unfortun[a]tely I lost my job like another 600 people because of the economic situation all over the world but I have to admit I loved my job and I was proud of it! Thank you for experience of Aston Martin quality, good luck to everybody. Aston martin is the best!”

Six hundred people at Aston Martin did lose their jobs because of executives who want to preserve their balances and patrons, who despite their large net worths, have little appetite for public humiliation in the face of a media that now cries that conspicuous consumption is bad.

This paradox of thrift in journalistic spirit hurts people, destroys livelihoods, and threatens perfectly good car companies. Sicker still is the sanctimony with which the press is going about its scorched earth crusade.

Someone should inform these earnest folks that contrary to their sources – flagellation is so 16th Century and loathing others went out in Q.4, F.Y. ’08.