“My Two Cents”
By Andy Sutton

8/23/2006

Spending a week at the beach is generally cause for overindulging on junk food, cotton candy and ice cream cones. Maybe trying our arm at the fast pitch game or swinging the oversized sledge hammer in a vain effort to ring the bell at the top of the ‘tower of muscle’.

In a somewhat perverse way, I view a week at the beach as a way to put a finger on the pulse of America. The beach attracts people from all walks of life, SES levels and viewpoints. Like most popular vacation spots, you get to experience quite a cross section of Americana.

What I saw this time around was a society in consumption mode. Captivated by cell phone ringtones and text messaging. Addicted to sport utility vehicles with expensive stereo systems, and all-you-can-eat seafood buffets. Now I don’t begrudge anyone a last minute beach getaway before summer ends, nor am I the Grinch. Like most things, you have to consider these observations in context. There are certainly situations in which all this consumption would not be alarming. Today's economic environment, however, does not qualify.

If you spend your time looking at the financial headlines like I do, you read that the economy is slowing, unemployment is creeping up, inflation is on the rise, and consumer debt (credit cards in particular) is skyrocketing. Based on these headlines, I would have expected to see largely empty beaches, half full motels, and struggling Boardwalk businesses. However, this was generally not the case. People, especially kids between 17 and 25 are spending money, and at a furious pace. One of the vendors I talked to indicated that this was the worst summer in the last decade, despite near perfect weather. There were certainly plenty of families on vacation, but as I watched, I noticed a lot of browsing and not a lot of buying. However, such was not the case with the younger crowd. They were battling for the front row seats on the Promenade deck of our proverbial financial Titanic.

So I watched the young people spend and search for insights into their ‘prosperity’. Many of these kids are of college-age; months, even years away from their first foray into the world of serious moneymaking, yet they spend money like the most accomplished executive. Or do they? I am reminded of two recent headlines in particular: “Consumer debt balloons in June”, and “Students leave college with more than loans to repay”. When you look at it in context, it becomes apparent that to a large extent, there is no real wealth, just the sacrificing of future prosperity in favor of current consumption.

It would seem that like most of America, the philosophy of ‘Butch’ Bernanke has had an profound effect on the Sundance Kids as well.

Andy Sutton holds an MBA in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics.

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