Shop Our Way Out of a Recession - a Shopoholic's Response

The past few weeks we have heard much about bail-outs, stimulus packages, savings, foreclosures, debt levels and consumer spending. Given the current economic crisis, I agree that consumers and homeowners need to be responsible with our money, however, as fashionistas and shopoholics, I agree with economist John Maynard Kaynes that we must shop our way out of a recession.

Technically, it’s called a “paradox of thrift.” Here’s what it means…If fashionistas and shopoholics cut back on their shopping as an attempt to increase their savings, then the savings as a whole will fall because one person’s shopping is another’s income.

Make much sense? Let me explain it with a BCBG dress. If I buy a sexy dress for 200$, it will help the company keep its sales person, for an extra two days. She can then go and get her nails done at the nail salon. The salon owner can then keep and pay the manicurist, who can then go and feed her family a nutritious meal, and so on…If we all stop shopping at once, the money stops moving. No income equals no savings!

Economists argue that the last recession was in 2001. At that time, to lessen its effects, consumers were encouraged to shop! And we did!! Unfortunately, it led to many consumers spending their hard earned money on things they could not afford. American shoppers became cocky leading to careless spending and enormous debt.

Now, I’m not suggesting that fashionistas and shopoholics participate in this form of shopping habits again. Rather, I recommend guilt free shopping for a BCBG dress or 9 West shoes if you believe your job is secure, you have a minimum of three months of savings, you have a low interest credit card, a 401k, and are on the road to paying off your debt. If you have this, then do some guilt free shopping!! Not only do you owe it to yourself to get a new pair of gladiator stilettos, but you owe it to the world economy. It needs you to survive and overcome!

(If you do not have these, I strongly suggest a budget to get you on track and to participate in guilt free shopping on smaller items, items that will help you to save money, or that will build your investment portfolio.)

The current recession is not just an opportunity to take advantage of amazing prices and sales, but its an opportunity to see what designers create. Historically, recession and war have seen an innovative use of fabrics, colours and designs. And, at attractive prices. Remember, Chanel? Her fashion success story began in the 1930s with a designer hat store.

The 2009 fashion season has already seen trends that are being called “depression chic” by Vogue magazine – statement coat, trouser pants, classic First Lady dress, broad shoulders and fetish boots & shoes. The colours are bold and fierce with ladylike details and sexiness, to represent the emotions of the current economic times. Calvin Klein, Oscar de la Renta and Michael Kors are just examples of designers who are considering the recession when creating a philosophy for their collections.

So, put on your shopping shoes, call a girlfriend and do some (responsible) guilt free shopping to help your own and the neighbours savings grow and the global economy.

What are you doing differently during the current economic crisis? How has it changed your lives? I would love to hear your comments and feedback!