USAToday Article on Skiing & The Economy

[riverc0il]

But the fear is based on reality.

Long before the implosion of Wall Street, people had seen their home value gone down significantly and had slowed or stopped spending. That, had already started a economic downturn. The Wall Street fiascal only make it more visible by adding to it.

For many, it's a double whammy of falling property value and whatever investment they hold. That's especially true of the well-to-do class. When the upper-middle class cuts back, some in the middle and lower middle class WILL lose their jobs. Whether that "some" will include you or not is quite often random.

So, it's every individual's believe and choice whether to prepare for it by cutting back (help oneself), or not cutting back (help prop up the economy).

Use myself as an example, I, for one, am not willing to help the economy at my own expense. Like most working class, how much I can afford to spend depends DIRECTLY on how much I make. Even assume I'll have a job, there's absolutely no chance of any raises nor bonus. That would certainly affects the level of my spending. But worse, there's a non-zero chance my job may or may not be there in a few months. So I simply can't afford to free spend beyond what I have (or not yet have aka credit card debt).

My feeling is quite the opposite. I believe we've been spending way too much for far too long. So we're returning to a more sensible spending habit, hopefully for the long term. And that, would automatically means job cuts for some, and lowering salary for the rest from here on (not just for a few month). The fact we're trying to do that all at the same time...well, that's just unfortunate.

We simply can't spend our way out of a mess that's caused by too much spending!

As I mentioned in my post (our feelings are not opposite), I think Americans have been over spending and going into debt for far too long as well. Where I am drawing the line is that people reducing spending because of fear is not the same as a long term consumer adjustment because people realize that living in excessive debt and living beyond their means is a bad thing. This will be a painful short term and temporary adjustment of consumer spending and we'll soon be back to the rat race of unsustainable double digit growth that must happen for the current economic system to work for everyone involved. I really wish this economic down turn would produce a discussion of how we are going to make this work for the long term but I just don't see it happening like that. Not human nature to learn from our mistakes.

The notion that falling investments and falling home values should effect spending is non-sense and is exactly what is causing the reduction of spending. If you are investing for the long term, a short term recession should not effect your buying habits. And falling home values should not effect buying habits either... both involve things that should not vary with economic downturns... investment funding and mortgages. If people were relying on short term investing and selling and relying on making a profit on a home to subsidize their spending, well.... people are getting what they deserve for making bad decisions based on faulty assumptions that the good times would not end.

I agree (and my prior opinion post is fully based on) the well to do will cut back and that is going to effect middle and lower class Americans in the form of fewer hours for hourly wage workers and payroll/job cuts for many others. I am just saying the folks at the top are not cutting back out of necessity (in most cases excluding poor financial planning, etc.) but rather out of fear. It is a trickle down nature of the worst kind.

 

[shwilly]

Anecdotally, in my group of friends there's about the same projected ski days as last year. Unfortunately, the Shwilly family will see a drastic drop in days from last year....not because of the economy, but because a little Shwilly will arrive in February. Some good friends of ours who day-tripped last year have passes this year and are planning a trip to UT, more or less offsetting our days. The rest of our friends are staying about the same.

We are getting a house in Maine with our friends like we do every New Years. This year the house is a lot closer to the NH border than in years past, so we'll be closer to Shawnee, N. Conway, and Sunday River and farther from the Loaf. There may actually be more money spent on skiing that week, since I'll be buying day tickets instead of going on the pass.

Like others, I predict this to be an OK year in the northeast as long is the weather is decent. Northern NE may get "destination" trips that would otherwise be in the west or Europe. (Most have probably seen this article in the NY Times suggesting as much.) The drop in gas prices was a big help.

 

[abc]

If you are investing for the long term, a short term recession should not effect your buying habits.

That's a big "if". There's no such thing as a "long term investment". It's just investment, long AND short term, which currently are down across the board.

Your conclusion can only be true if you have secure and steady income that're independent of that "long term" investment, which is not the case for many people.

Quite a significant segment of the population are either dependent on such investment for spending (those who are no longer working), or they need to use that investment to make up for their lost income (those in working age). They must spend less when their investment valuation drops.

Never mind the realization of a lower return WILL impact on spending, if only in the most positive form of needing to save more. Hence, spending less, out of the same income.

That's where we disagree: whether the belt-tightening is rational or irrational. I think it's rational for many.

There's no escaping the fact our economy of the recent years had been fueled by spending of money we don't actually have (nor WOULD have, realistically speaking). So that portion of spending will simply stop, either volunteerily by those who woke up to realize that fact, or involunteerily by the drying up of credits to those who hasn't. Either way, overall spending will decrease, and not just for short term. As a result, existing jobs will be reduced also. Hence, potential of job lose or reduced wages are real. So are the fear of such.

I don't mean our believe are different regarding saving vs. spending. But rather, I don't believe we can spend our way out of this recession. For we simply don't have anything to spend any more.

That's why I come to the conclusion the cutting back in spending is inevitable. And those who do voluntarily will be better off in the long run. In the short run? We're in a recession because we didn't spend enough! Do you see the irony?

 

[Starter Jackets Rule!]

i will be living life to the fullest and having the time of my life. some how i just do not see the economic woes that the news is trying to put up in our faces...i'm just not buying it!

 

[snoseek]

I am not a home owner and cary very little debt, and have very small (now even smaller) 401k so I think I may actually benefit from an economic slowdown and have more disposable income. Income could eventually be effected if thnigs get really bad though.

 

[snoseek]

I also feel like western resorts will take a big hit this year. I do feel like the local areas won't be affected at all because they don't rely on real estate and out of staters to generate revenue. I can see areas like Breck, Park City, Vail having a big drop in $$$$ dropping customers.

 

[MadPadraic]

It's a shame, because gas prices are now getting down to something reasonable.....

I disagree. Gas prices have come down to a more familiar level, but they aren't reasonably priced. $4 gas was more reasonable as it at least began to factor in all the externalities.

That being said...I don't understand this gas prices are cheaper so people are going to stay in New England argument. Gas prices and air travel aren't good substitutes.

Here's a simple example: I fill up once during a trip to Sunday River. Thirteen or fourteen gallons of premium would cost about $60 under the higher gas prices. I'll pay that for less than three days parking at Logan. That is before airline tickets/FF redemption fees/car rental/baggage fees and the unpleasantness of TSA and screaming babies.

The fact that I can now spend about $30 less on gas for a local trip has no bearing: it was going to be a LOT cheaper anyway.

I do think that the argument that cheaper gas will encourage more day trips carries some weight.

 

[MadPadraic]

The notion that falling investments and falling home values should effect spending is non-sense and is exactly what is causing the reduction of spending. If you are investing for the long term, a short term recession should not effect your buying habits. And falling home values should not effect buying habits either... both involve things that should not vary with economic downturns... investment funding and mortgages.

Two points: it isn't exactly clear that his is going to be a "short term recession." The case study is Japan's lost decade.

Second: if you believe it is a short term recession then, rationally, it SHOULD impact your spending. It is rational to cut back out of fear, and it also rational to want to invest more because some investments will appear very attractive relative to recent levels (at least if you believe it is a short term recession). Ignoring borrowing and saving: income=consumption+investment. Hence an individual with this outlook should invest more so they can ski much more in future years.