Wednesday, October 22, 2008

Trickle Down / Trickle Up

I'm a salesman in advertising. I know, not a very noble career, but here I am, might as well enjoy it. In the past two weeks I have had three clients, one an agency owner, one a freelance designer, and another a fairly high up account guy at a major agency, tell me that their clients, virtually all of them, have put everything on hold "until the economy becomes more clear" or some such. Sorry for the run-on sentence.

When corporations stop spending money the trickle down effect is immediate. I make less. I spend less. My artists make less and spend less. Their crews, ditto. The caterer (yeah, we eat well), the studio owner, the prop person and more, all are making less TODAY and spending less TODAY. Fewer purchases at Circuit City, a new car put on hold, dinner out not an option.

The "trickle down" theory works more slowly. Or shall I say not at all. But for sure, much more slowly. Think of it this way: the CEO makes an extra $18 million, puts it into a hedge fund and goes out to dinner, blowing $1200.00 on dinner for two with a decent bottle of wine and tips included. His chauffeur does OK (oops, price for the night just went up to $1800.00), the restaurateur does OK for a night, and then a credit default swap snafu wipes out half of the $18 mil. CEO decides to yank his money and put it into T-bills.

Trickle up works. Give the people money and dear Lord, they haven't learned the smarts of living within their limits yet. They spend it. The economy loves that. Flat screen TV's, dinner out, vacations, Christmas gifts, all that good stuff that we love, we buy.

Trickle down, not so much. More like trickled on.

Sorry, not much faith in this system at the moment.

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