Microwaves as Luxury, and a Tangled Safety Net: Thoughts from the Weekend NY Times

The recession has undoubtedly shifted a lot of paradigms lately, and I think all would agree that it’s gotten Americans to sit up and take notice– both individually (challenging their own habits of consumption and saving) and societally (coping with cracks in the safety net system). The New York Times has taken notice, as well– two articles in this weekend’s Times merit mention.

The first (Shift From Spending to Saving May Be Downturn’s Lasting Impact) highlights the re-emergence of a culture of thrift– and indicates that, unlike past recessions, it’s here to stay for a while:

Consumers have lost a huge chunk of their net worth, in the housing bust and the stock market, and to resuscitate their retirement accounts or children’s college funds they will have to channel more of their paychecks toward saving– unless those asset markets soar again.

But it likewise signals a shift in attitude, one that is increasingly wary of a culture of consumption that has spun out of control. An April Pew Research Center survey, for example, revealed that more Americans were beginning to consider seeming necessities– like microwave ovens– as luxury items. (This culture shift was called for by Ray Boshara and Phil Longman in their book The Next Progressive Era, published last month.)

The second (For Victims of Recession, Patchwork State Aid) profiles the devastatingly complex and disconnected welfare system in the U.S. that covers some and neglects others, for reasons of chance or geography, characterizing it as:

…a hit-or-miss system of relief, never designed to grapple with the pain of a recession so sudden and deep. Aid seekers often find the rules opaque and arbitrary. And officials often struggle to make policy through a system so complex and Balkanized.

While untangling the government aid system will take years of work, one step in the right direction would be removing asset limits that penalizes welfare recipients for saving and asset ownership. The Asset Building Program has long encouraged asset limit reform, especially those that discourage benefits recipients from saving and owning assets. (See our 2008 and 2007 Assets Agendas for more on our approach to asset limit reform.)