Friday, November 21, 2008

So, about that market

My mother-in-law's blog talked about the demise of Rizzo's, a wonderful Italian place in Glenside. I had driven by the empty business a couple of weeks ago and wondered aloud to my wife that it might have closed. We both discussed how that couldn't be true.

So, the demise of that Glenside landmark made me do something simple - patronize a pizza place in Lansdale I like too much to see it go away.

Not too long ago a small grocery store in Lansdale, Vidalia, closed because they couldn't maintain enough of a customer base. It was a shame, and it saddened me that they closed, but I realized that I had maybe spent $300 there in the 13 months. If I really wanted it to remain open, I should have shopped there more often.

As the economic times get trying, I cannot help but think of two lessons I try to impart to my students but am just now learning to articulate. Namely, whenever we spend money we are transmitting two messages: a) we're rewarding someone for the way in which they conduct business and b) we're expressing some level of confidence that we will be able to replace the money we just spent. And in a time of recession, it's so easy for us to pocket our own money and save (with good reason). For me, I'm thinking more about where I want to spend that money. Whose approach to business do I wish to reward? Whose work ethic do I wish to reward?

It leads me to think about Detroit, and how, as a car lover, I cannot fathom a world without the big three. However, twice since the 21st century began I had the chance to replace automobiles. Each time, I rewarded a Japanese automaker with my hard-earned money. Do I regret my choices? No. And I don't like the idea of Congress siphoning large amounts of money to Detroit in order to rebuild. The long-term prospects of doing so don't seem to justify the use of my tax dollars. Me and the millions of Americans who have rewarded Detroit's competitors should be wary of our government using our money to prop up businesses to which we, at some point said, no thank you.

However, perhaps the third message I need to convey to my economics students, aside from spending money as an expression of reward and confidence, is that we need to live with the decisions we make.

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