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July 19, 2010

Why a Penny Saved is Not Always a Penny Earned

Brian Urich/New York Times
Brian Urich/New York Times

When I came across this photograph in the NYT yesterday I was stopped in my tracks. The story that it anchored concerned “the way we live now” in an era of debt, but all I could think was that this is a picture of the late modern ghost town.  A shopping mall without shoppers … or for that matter, without shops or shopkeepers.  Instead of sage brush and weeds we have rubberized plants, and while the store fronts are not boarded up it is a fair bet that the building has been locked down to keep vandals and scavengers away, but the scene nevertheless evokes the eerie, spectral presence of the now absent, bustling commerce that once filled these halls.

In the days following 9/11 we were told that it was our civic duty to consume in order to keep the economy on its feet; the now prolonged recession makes even this limited civic responsibility impossible for many to honor; and for others, well, as the Times reporter notes, “it just [feels] better to owe less money,” and so rather than to spend many citizen-consumers have resorted to saving, or paying down their debt.  It is hard to blame individuals for the same strategy being exercised by banks who severely limit the money they are willing to loan in a “risky” economy or corporations who refuse to invest or hire—or for that matter, the strategy being counseled by Republicans who think that the solution to our economic woes is to limit spending (including on such items as extended unemployment insurance) while extending the Bush tax cuts.  But nevertheless, the effect of such thrift on the economic recovery is palpable.

The question is, how do you give presence to an economic problem, particularly when it is animated, at least in part, by a psychology of risk?  The photograph above does a pretty good job as it visualizes the problem (or at least the effect) in chicken-and-eggs terms:  what comes first the shoppers or the shops?  What the picture makes most clear is not the old saw that a “penny saved is a penny earned,” but rather its counter, that one needs to recognize what is entailed by being “penny wise and pound foolish.” The members of Congress in particular should pay heed.

crossposted at No Caption Needed

  • black dog barking

    Automatic stairs stand in as symbols of the factory line, the regulated movement of commercial products through the manufacturing process. The ad-hoc barriers at the head and foot of the pedestrian conveyor belts remind us it will be a while before we pull this asset out of mothballs.

    Don’t need shopping malls when the manufacture of gambling debt and medicare fraud are two of our biggest economic preoccupations. Deflationary spiral anyone?

  • pws

    I remember watching this process with one of the Tampa malls, at the end of the dot.com boom. Everytime I would go, the mall lost a few more stores… then all that was left was the food court… then it was closed.

  • Kathleen the Great

    When I came across this photo here on this site I was stunned, because this is Rolling Acres Mall in Akron, OH. (If not, it’s an exact replica!) It was built in 1975, and was a very busy mall throughout the 80s and most of the 90s. That store across from the top of the escalator was once a Diamond’s men’s store.
    Way at the end of that now dark hallway we are looking down, used to be an arcade I played video games in.
    The mall itself is completely closed, but two stores that had their own buildings attached to the mall are open- a JC Penney’s outlet that used to be a regular Penney’s, and a Sears store.
    I remember when that elevator first was built, in the 80s, and as a kid looking out on the mall as you went up or down a floor almost seemed like an amusement park ride!

  • Pingback: How Do You Picture an Economic Problem?; or Why a Penny Saved is Not Always A Penny Earned | NO CAPTION NEEDED

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