In case you haven't heard, the American economy is a bit jittery at the moment. The real estate market is not well, the large investment companies are trying to stay afloat during the national credit crisis, and gas costs alot more than it used to cost.
And yet, the SUV drivers soldier on, filling up on oversized foodstuffs at gigantic supermarket chains, making pitstops at the local Starbucks to buy a coffee that costs about as much as a whole bag of coffee elsewhere, and generally spending themselves silly on consumer items they do not need, nor can afford.
But there is trouble in the air. People are beginning to realize that they have been living way above their means for quite some time. When I was in high school, it was the high school students who had the shittiest vehicles. Several years afterwards though, one would not be shocked to see a caravan of teenage girls all go driving past in a BMW on the way to the beach, expensive cellphone in manicured hand.
The reality is that people couldn't afford those goods back then, and they are starting to understand that they cannot actually afford them now. When I was younger and trying to figure out the principle of credit, I understood it as borrowing money from my future self to pay for things I need today. What I think is occuring in 2008, is that we have now become our future selves, and we are angry with our past selves for incurring all this debt.
In some ways we have been ahead of the curb. I sold a lot of belongings to get rid of our credit card debt back in 2006. Since then, I have tried to operate on the principle of the "real economy" -- making financial judgements based on the amount of money actually in your bank account -- versus the "fake economy" -- making financial judgements based on future wealth generated by a hypothetical miracle market.
I think that Estonia is in the same boat here too. Like Americans, Estonians came to think that they deserved to drive the most expensive cars and could afford the most ambitious renovation projects or vacations. I mean, they had been stuck in the post-Soviet economic toilet for so long, that they were owed only the finest quality consumer goods. Estonia was now the West, and Estonians would live like their Norwegian or Swedish compatriots.
Except it took a long time for those countries themselves to become wealthy, and their high standard of living owes a high debt not to just Nokia or Ericsson, but also to, gasp, wealth redistribution. Moreover, they also are learning that they can no longer afford to live so extravagantly. Needless to say, the Swedes and Danes aren't all speeding to their summer cottages in BMW 3 Series; many are probably taking the family Volvo instead. Thrift is a Scandinavian virtue, and it is one that is probably being rediscovered in Estonia on a daily basis.
In some ways, I liken the economic forboding to a well-deserved diet. We've eaten ourselves fat and now it's time to ration our supplies. But the American shoppers in the supermarket are going to need to start rationing soon. The morbidly obese have a lot of weight to lose indeed. I wonder what products they'll cut out first.