Friday, 19 December 2008

This Grinch Could Restore Christmas

19th December 2008

The Malta Independent - Friday Wisdom

I got inspired by last Sunday’s editorial in this paper’s weekly sister whose message was that the general economic slowdown, the probability of an acute recession, and the further uncertainty created by the confusion still prevailing regarding the utility bills we have to pay retroactively as from last October, are making for a sombre Christmas build-up, with consumers holding much tighter to their purse strings than they normally do at this time of the year.

While it is too early to draw firm conclusions about the performance of trade in this holiday season, it is evident even from a firsthand visual look that there are much less flickering lights than norm in house windows and balconies. Evidently Christmas light decorations were the first victim of households treading receipt of their first utility bills based on the new rates, whatever they may be.

I thought I should take a positive side to all this fear and apprehension. Could this Grinch of a recession help us to re-discover the true spirit of Christmas? Could the economic uncertainty bring families and friends to enjoy and appreciate each other rather than the gifts they normally exchange?

On my home office desk I have an expensive fine bone-china pen tray that I had received as gift from a large international corporation when as a consultant to my business clients we had signed an important commercial agreement after long and arduous negotiations. Next to it is a rather deformed carton open top box with two side ears made of sea shells and a nose made from an egg carton pocket. My daughter had brought it from school as a Father’s Day present quite a few years back.

There is no comparison between the commercial values of these ornaments on my desk. Yet for obvious reasons I value the carton ornament much more than the fine bone china one. Value in the eyes of a gift recipient goes beyond the intrinsic material content. More weight should be given to the efforts, care and love that the donor gives along with the gift, whatever its value.

A recession is unquestionably painful. Those who lost their jobs, those on reduced pay as their employer firm is on a short work week, those who feel insecure in their present job, those who have seen their income shrink as a result of less overtime or part-time jobs, all these cannot go on spending as if Santa’s reindeers will evaporate all economic uncertainty.

Businesses that are seeing their sales falling and their stocks piling up cannot pretend their cash flow can continue to support their future investment plans. Shop owners watching clients window shopping rather than actually buying cannot take consolation from the consistent human traffic through their shops if their tills are not ringing with the usual rhythm of the season. Plants that are watching their order book shrink cannot just hope that things will return to normal in the short term without providing for measures to cut costs to see themselves through this rough patch.

Yet together we can make the pain more bearable and we can re-discover human values which had got buried under materialistic consumption. Who needs expensive heating if we can warm each other with honest and heartfelt Christmas hugs? Who needs expensive gifts when last year’s gifts are probably still sitting uselessly on some shelf or in some cupboard? Take a look around your home and see how many useless gadgets have been accumulated over the years.

This recession will help us do away with expensive superficialities and see who our true friends are. We can see who is there for us in lean times as much as in good times. Those who love us for ourselves not for our position. Knowing one’s true friends has much more value than the most expensive gift.

So let’s make an effort not to let the recession steal away our Christmas spirit. On the contrary we have an opportunity to re-discover it. We have had recessions before. This one may be longer and deeper but it does not really matter. What matters is that we accept that recessions are necessary periods for restraint and restructuring so that we can form a strong sustainable base for the next economic upswing.

There is a natural tendency to always assume that the future will be a mere extension of the present. Just as we thought that strong economic growth will continue indefinitely when the going was good, there is a tendency to assume that we will be in eternal gloom now that the mould of economic growth has been broken.

History shows that nothing lasts forever and that economies have strong inbuilt cyclical mechanisms to turn themselves around. The fall in interest rates will reduce the monthly mortgage payments leaving consumers with more disposable income. The drop in the price of international energy will eventually lead to lower utility bills and cheaper prices of fuel at the pump once government swallows its pride and admits its mistake in raising rates when the whole world is cutting them. The value of your house and of your investment portfolio is probably lower than what it was this time last year. But unless you cash out you stand a good chance of recovering your unrealised losses as recessions do not last forever.

My next contribution will be on 2 January 2009 so I take this opportunity to wish my readers a peaceful Christmas and a prosperous New Year. Let’s take the opportunity of what will probably be a holiday season with less material noise to re-discover the true spirit of Christmas and accept that in life we have to accept the rough with the smooth, that a crisis offers tremendous opportunities for restructuring to shape up for future challenges, and that we have accumulated enough blessings to overcome a short period of instability.

Till next year!

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