Lunch at O'Brien's Irish Restaurant & Pub: six bucks (drinks not included) -- oh my! In Santa Monica, with Wilshire Boulevard rents yet -- unbelievable!
Sarah Gilbert and I have been finding little bits of information here and there (Economic indicators coming from more unlikely places) that support the notion the slowing economy is being felt by the "little guy" first, as usual. Small business owners see it first because they have very flat enterprises. (Venice Beach as a leading economic indicator) Owner and staff and that's it. Sometimes just themselves. Employees receiving a paycheck see it early and have the least options to adjust to change, and fixed income seniors -- they're totally stressed out.
Large companies have so many levels of management that by the time the guy at the top feels the pain (assuming he ever does) of the guy at the bottom he has already collected his bonus for his underperforming company. By the time the guy at the top responds to the needs of the guy on the bottom (assuming he ever does) the guy on the bottom has already figured out what he needs to do to survive and has helped himself.
Composing this post in my head walking back from lunch I wondered about how much attention we pay to Wall Street data each day, even though that data really comes to us second-hand from everywhere else.
I started going to O'Brien's almost three years ago as a sanctuary in the middle of my 16- to 18-hour crazy days. I don't even drink alcohol but the pub is nearby and they have great food (absolute best roast turkey sandwich) so it became one of my hide outs. The owner, William O'Sullivan does not allow cell phone use inside, another relief ... more places should do that. Everyone is talking about adjusting their budgets to deal with energy costs and that leaves less for dining out. Willy told me he reduced his marketing budget and hopes his pricing structure will increase the lunch crowd business instead. I'm not sure about reducing marketing in any economy, but he had to cut somewhere, and that was his choice.
Looking ahead, if the little guy is feeling it in November so will the Republicans, and before anyone accuses me of taking sides let me make it very clear -- I split my vote, and vote for the person and the issues not the party!
There is no question that the biggest impact on the economy is energy prices. Interestingly, gas prices, inflation-adjusted, are probably about right. However, that ignores many important factors. Energy prices affect more things than they did in the past and more things are automated / electric than ever before. Also, the macro economy adapts to whatever condition is thrust upon it and whatever level fuel prices are at is accounted for, so a rapid rise in energy prices rocks the system no matter how you try to rationalize any part of it.
Hank served up my hot apple pie and gave me the bartender's view of things before I departed -- he gets an earful each day. Santa Monica is an affluent community by most measures. But things are changing here too. What do you see and hear on your Main Street?
Disclosure: I received no compensation from Willy or Hank, the Democratic Party, City of Santa Monica, State of California or any small business owners, employees, or senior citizens anywhere in the country. However if Willy offers a free cup of coffee and a slice of pie I will accept it.
Sheldon Liber is the CEO of a small private investment company and the vice president for Design and Research of an Architecture & Planning firm.