Despite slumping economy, some rush to buy expensive iPhone contracts. Others limit spending with bulk food purchases.
With investors reducing their expectations, inflation intensifying, rumors of bank failures spreading, and a weak labor market, it is vital for American consumers to reflect on whether this is a typical economic downturn or a new global economy where the rules of the game have shifted.
Some financial analysts are beginning to ponder whether this is a "transformational" economy where traditional relationships are no longer valid in determining expectations of future economic growth.
If such an economy were to evolve, how we measure supply and demand of natural resources, global credit flows, and investment returns – among other factors – would need to be radically reshaped.
As economic uncertainty rises, consumer anxiety regarding the depth and length of the current economic downturn is understandable.
But apparently, not all consumers are convinced that careful spending and downsizing should rule their family budgets in today's weak economic environment. Just look at the long lines that formed at Apple and AT&T outlets across the country July 11 when Apple introduced the iPhone 3G.
The new phones are priced at $199 (8 GB model) and $299 (16 GB model) for eligible existing customers as well as new ones. Less emphasized in marketing materials is the mandated two-year contract with a minimum monthly plan starting at $70 a month. That adds up to at least $1,680 for the entire contract period, not counting the phone.