I must accept that my duty as a woman, and an American, is to spend until it hurts

October 20, 1998|By SUSAN REIMER

WELL, IT LOOKS like it is up to me to rescue the U.S. economy. As if I don't have enough to do.

Along with the rest of middle America's stock market novices, I have been watching my itty-bitty mutual funds evaporate over these weeks of international monetary yo-yoing. In July, I was as rich as Mrs. Gotrocks. Today, I am as poor as a church mouse.

This is only "on paper," of course. Which means that it doesn't really matter. I can't help but wonder if they will let my husband and I retire "on paper," or if they will allow our children to go through college "on paper."

Anyway, though it was never mine to spend, there is nothing left to spend. But spend I must or the U.S. economy will crawl into bed and pull the covers over its head.

That's because the economic vitality of this country is one more thing for which women are responsible. Like replacing empty toilet paper rolls. If we don't do it, it won't get done.

You can stay with me while I explain this, or you can leave for the mall now. But you might be grateful to know this stuff when your worried mate looks up from the business pages of the newspaper as you walk in the door with a pile of packages, and demands to know why you are spending the family into ruin.

Economists call it "the wealth effect."

The closer the Dow Jones average got to 9,000, the wealthier we felt, even if our wealth was in our 401(k)s and not in our wallets. Quarterly reports made our hearts flutter like love letters once did.

The wealthier we felt, the more we spent.

Why save when the stock market was doing it for you? We purchased houses, cars, appliances, vacations, Steve Madden shoes.

But when the Dow started falling like a bowling ball down the steps, we stopped feeling wealthy and started feeling nervous.

Consumer confidence is slipping in this country, and that consumer is a she. In families where the wife works and in families where she does not, the woman influences 92 percent of the purchasing decisions, says Eugene Fram, the J. Warren McClure research professor of marketing at New York's Rochester Institute of Technology.

"I have been looking at this since the beginning of the '90s," said Fram. "In all categories of merchandise, when we asked who the major decision-maker was, it was the woman."

From cars to ketchup, women decide what to buy. That's why the likes of Midas Muffler and Jiffy Lube advertise in women's magazines.

"Women are the purchasing agent for the family," says Fram. "Women spend more time shopping than men -- more hours a week by a significant number. So, you can see that whatever LTC happens to consumer confidence has a significant relationship to how women think."

Consumer spending -- the kind of spending a woman does -- accounts for more than two-thirds of this country's $8.4 trillion gross domestic product. Consumers spend more than business or government, and they spend more in this country than we export to all others.

If women start snapping their purses shut, economic gears start grinding. Sales drop, profits fall and businesses contract, cutting payroll. Joblessness goes up, spending dries up, sales drop, profits fall . . . Do you see the pattern here?

According to the most recent consumer confidence survey by The Conference Board in New York, Americans continue to feel very good about the economy right now. But they are less optimistic about what they expect to happen in several months.

In several months it will be Christmas. When it comes to assessing the health of the American economy, Christmas is like a thermometer under the tongue.

I don't know how it is in your house, but there are 312 names on my Christmas list and only one name on my husband's list -- mine. If I don't do Christmas, it is just the 25th of the month. I decorate, I bake, I cook, I write cards, I entertain and I spend money like I had it.

Which, of course, is the whole point of this economics lesson.

Ladies, this is the big test. While investors are running for the exits, while geniuses like Alan Greenspan are dithering in bewilderment and saying really helpful things like "I've never seen anything like this," and pointing to "this whole looming sort of somewhat scary psychology," while the gloomy press tries to talk the country into a recession, we must push this economy back on the road.

If we women don't come through this holiday season, "It's a Wonderful Life" will seem like an ironic, personal allegory: What would the world be like if we had never spent money?

So get busy. Redecorate in time for holiday entertaining and lavish gifts on those you love and those you hardly know. You owe it to your country.

Pub Date: 10/20/98

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