Autumn 2008

Piggy bank in a vise

Ben Plewes/

Personal Economics 101

In tough financial times, experts offer up a few creative strategies

The economy is the number one issue for Americans during this election year. As gas and food prices climb, home and business budgets are being stretched and scrutinized. Several Emory experts weigh in on what we can expect from the financial future and ways to sustain, survive—even thrive.

Curb the need to shop. Considering the rise in consumer costs—housing, insurance, tuition, energy, and food—Goizueta Professor of Finance Roy T. Black says there will be a “diminishing horizon of expectation in how much we can continue to consume. I think the younger generation is resigned to the fact that they may lead different lives than their parents. Our economy is now based—some 70 percent—on consumption. But with real wages shrinking, that expectation, and Americans’ need to shop, will have to be curtailed.”

Stay informed. Finding a fix to the current fiscal problems faced by Americans will largely fall to the incoming president, says Alan Abramowitz, professor of political science, so he urges citizens to pay close attention to economic plans and decisions. Additionally, notes Abramowitz, the war in Iraq results in “about $200 billion a year in direct and indirect costs. The war is a big drag on the economy, and it will continue to be for some time into the future.”

Be a creative renegade. Conventional wisdom holds that boom times call for new ideas and risk taking, while recessions are best managed by following the proven path. Conventional wisdom is wrong, says Kevin Coyne, a senior teaching professor at Goizueta and a former senior partner at McKinsey and Company. “In fact,” he says, “even more creativity is needed when times get rough. The only advantages you will have are ideas your competitors don’t think of. Recessions are the best time to step up your competitiveness.”

Search for freebies. Consider the benefits of online market sites such as Freecycle or Craigslist. “Freecycle is a tremendous resource that is both economically beneficial and eco-friendly,” says Paul Fowler, the new director of Emory’s Career Center. “For those trying to cut corners, you can find most any commodity up for the taking—and if it’s not being offered, you can simply request it! It’s amazing what people are willing to part with when they discover there is a real need from someone else.”

Stay calm. Having experienced the steepest drop in the stock market since September 11, 2001, consumers are justifiably worried, and the economy is likely to get worse before it gets better, says Goizueta Assistant Professor Tom Smith. “People get scared about their assets, especially their retirement accounts. It’s important to know that the stock market will rebound—we just don’t know how long it will take. A lot of the fallout from this depends on how people perceive it and react to it, which in turn will affect how the market reacts,” says Smith, a specialist in financial economics. “In addition to what’s happening with Wall Street, most of the economic statistics and indicators are revealing that the economic situation is tightening, and signal that we are moving into a recession. The worst is yet to come, and people should brace for that.”

Discover enough. United Methodist pastor Paul Escamilla 81C 84T 87DMin says the way to cope—even thrive—lies in the time-honored wisdom that less can be enough. In his book Longing for Enough in a Culture of More, he encourages us to “escape the lifestyle and attitudes of a weighed-down world.” Escamilla explores the mystery by which “going without” is paralleled by “going within,” the movement inward to draw upon deeper, divine resources for strength and wholeness. Difficult seasons can afford promising and deeply rewarding personal journeys, he says: “Earth becomes a school for learning ‘enough.’ Our planet asks little and offers much.”