Voices
We asked a group of local business people and economic observers the following question: Are you concerned about the pervasive attitude among free-spending L.A. consumers that “the good times will go on forever”?
Wendy Brogin
Urban planning consultant
Yes I am, and the reason why is that we as a society end up having to pick up the broken pieces when people aren’t prepared with a nest egg. People need to look at their priorities during the good times and create or enhance their nest egg, and do some long-term planning that includes provisions for insurance and retirement. If there’s money left over, just spend it judiciously.
Steven Levy
Director
Center for the Continuing Study of the California Economy
People in the L.A. area should not anticipate a sharp economic downturn anytime soon but people should never spend beyond their means.
Richard Day
Professor of economics, USC
Certainly, it’s a concern. The level of consumer savings is now negative for the first time in history. The amount of consumer debt has been going up for many, many years, and this places a lot of people in a quite a vulnerable position.
Carol Schatz
President
Central City Association
Having lived through the early ’90s, we should know that it’s never going to last forever. The recession was devastating to L.A. and Southern California, and hopefully people won’t forget that the economy goes in cycles.
Tom Lieser
Executive Director
UCLA Anderson Forecast
I think they should be concerned because these good times will not go on forever. We make forecasts, but we’re not really in the business of predicting the next recession because sometimes the causes are things that can’t be easily foreseen. Financial reserves are always a good idea for the typical household.
Rod Hagenbuch
Principal
Quantum Leap Institute
No. The number that you’re seeing on the percentage of income that’s being saved is an incorrect number. The way the government determines that number doesn’t take into account what people are saving in 401(k) plans and stock options. If you look at the growth in those sectors, it’s absolutely huge.
