BUSINESS

The Latte Era Grinds Down

Average Americans were living like the Riches, thanks to easy credit and the real-estate bubble. Now they're trading down instead of trading up.

By Daniel Gross | NEWSWEEK

From the magazine issue dated Oct 22, 2007

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Discuss

Posted By: thrasher32 @ 02/29/2008 1:05:21 PM

Comment: Why does the article speak like most middle-class Americans are making between $150,000 and $200,000 per year? Sorry, that's lower-upper-class.

Also, what about the #2 (after mortgages) money-waster in America: Big ugly fuel-guzzling cars, trucks and SUV's? Dump that Escalade or Hummer and buy a Corolla or Civic and you're saving $1000 or more a month.

I guess it'd probly help a lot if we weren't throwing away $200 billion a year in Iraq as well. $200 Billion sure would buy a lot of economic relief. In fact, we could probably completely switch to a hydrogen-based economy for 200 billion, but no, let's buy some more bombs and bullets instead.
Posted By: blacroix @ 10/22/2007 11:23:05 AM

Comment: Since I was quoted in the article, I feel it's my right to put a couple of items into perspective.

For the record, our purchase of an Espresso machine was a "luxury item" without question. It may be true that it costs less now for us to have our latte in the morning (and it's much nicer drinking it with my wife on the couch), it still costs more than either doing without or having regular old coffee (which is just fine by the way).

We live relatively frugal, and have done so for quite some time, by choice. We drive our cars for 6-10 years. We mow our own lawn, clean our own house, do home repairs for ourselves and have bought WAY less home than the banks allow. In fact, our loan office questioned if we should be spending more. We despise debt.

We also want to live a more sustainable life from a "green" perspective. When my truck finally dies, we will get a much more efficient vehicle. Same for my wife's car. We had to replace our HVAC so we put in a 16-SEER unit to save energy. We added attic insulation. Our water heater was on the verge of dying, so we replaced it with a tankless unit (much more efficient). We set back our thermostat when we aren't home. We have CFL's in most of the house. We minimize watering the lawn and use a rain sensor. Since our windows are over 30 years old and are single-pane aluminum windows (very inefficient), we have begun replacing them with low-e, dual pane vinyl windows.

I will assume that since we have, and will continue, to live well below our means, channelling every extra penny into retirement savings, that the comments about getting rid of McMansions and Botox were directed elsewhere. :) Unfortunately, someone else will just move into that huge house and continue the cycle of using massive quantities of energy to heat/cool it.
Posted By: wftquest @ 10/18/2007 4:21:07 PM

Comment: Yes the price paid by some people is high. However, Americans in general can re-dedicate themselves to a more sustainable style of life. Some companies will also pay a price for this past extravagance spending by the public and the market may be impacted.
Posted By: citrusbuddha @ 10/17/2007 10:45:43 AM

Comment: This is ridiculous. You' ve just interviewed a select group of people who've chosen to live way beyond their means and are now (oh, the pain!) choosing to get rid of the botox and the mcmansions. The majority of Americans do not live this way. And a lot of them ARE actually struggling to make ends meet in this volatile economy. This article, and it's glib tone, is a slap in the face to those who might have to make more pressing economic decisions than whether to downsize their hummer.
Posted By: feelingood1942 @ 10/17/2007 1:58:44 AM

Comment: i for one am glad to see this trend. The reason my family has stayed out of debt is not because of a huge income, it is because we lived within our means and were careful with our purchases, time and energy. choosing to work close to home earning less money has paid off with more time with our family and friends and family. Keeping a car for well maintained, now with a 185,000 miles and purring along has paid off. Living in a smaller home in a nice neighborhood has paid of with smaller utility bills. Of course there is the house work and the yardwork...What a payoff that has been not only monitarily but what a great health benifits, walking to work, working, close to home, doing my own yardwork , has given me... At age over 65 I still feel great with a keen up todate mind, full of energy and limber to boot. Try doing your own thing What a
pleasure life will bring you and your family...Last but not least get off the phone stop look around you see and smell all the wonderful things this world has in it Joan
Posted By: feelingood1942 @ 10/17/2007 1:56:15 AM

Comment: i for one am glad to see this trend. The reason my family has stayed out of debt is not because of a huge income, it is because we lived within our means and were careful with our purchases, time and energy. choosing to work close to home earning less money has paid off with more time with our family and friends and family. Keeping a car for well maintained, now with a 185,000 miles and purring along has paid off. Living in a smaller home in a nice neighborhood has paid of with smaller utility bills. Of course there is the house work and the yardwork...What a payoff that has been not only monitarily but what a great health benifits, walking to work, working, close to home, doing my own yardwork , has given me... At age over 65 I still feel great with a keen up todate mind, full of energy and limber to boot. Try doing your own thing What a
pleasure life will bring you and your family...Last but not least get off the phone stop look around you see and smell all the wonderful things this world has in it Joan
Posted By: jamming @ 10/16/2007 11:51:56 PM

Comment: There is a simple lesson to be learned from over zealous investments, a home should be lived in not just admired for its size and cost. The baby boomers parents lived frugal lives. Some had lived through and experienced the hardships during the Depression Era as well as those difficult years during WWII. They did more with less and always saved when they could for raining days. Those were in fact the golden years in our country! Children did not sit in front of a TV set but encouraged to participate in community sports. Diabetis II was uncommon in children and not as prevalent among adults. People had common sense which unfortunately is at a premium today. When an opportunity arose, affordable homes were purchased to be passed on to heirs. Truly unfortunate how much we have diverted from our once treasured values which we nostalgically remember.