Labor Day slipped by before I grasped an opportunity to make a silly summer observation. The cinema and television culture had their fling at lighter, irrelevant entertainment, as is their custom in the lazy summertime, but the financial world was not having any fun these past few months.
So, I will seize these last few days of summer leisure to put a lighter spin on the state of the battered U.S. economy. We need some relief from relentless media coverage of securities-fraud indictments of a greedy society. The blame game sweeping the nation is itself a silly summertime work out.
How similar are trends in fashion and personal adornment to the state of the economy? Several years ago I facetiously wrote a column comparing hemlines to stock market trends. Short skirts meant an up market and long hemlines proclaimed stocks going into the tank.
My editor thought the idea was incompatible with proper economics and not worthy for predicting market trends. In fact, there was an historical basis for the hemline theory.
Later I discovered the Big Mac Index for comparing foreign currency rates. That method is published periodically by reputable business journals; so don't discount its source as a guide for global commerce. The discipline is simple to evaluate. List the price of Big Macs around the world and convert to U.S. dollars. The variations in a burger cost reveal where an economy is rich or poor. It's true -- just check it yourself.
In my opinion, economics is an art, not a science, despite all the charts and graphs full of figures. Why not utilize changing fads in food, music and clothing as a sign for social trends that are indicative of market trends?
Here is my newest hypothesis taken from pop culture. In the beginning of a bull market, fashion reflects cheerful colors, upscale and flamboyant designs and shorter hemlines. When times are headed for a recession, the colors of choice in clothing are drab, styling is severe and hemlines drop.
As evidence, compare the fashions during the Great Depression to how people dressed during the postwar boom of the 1950s. In the latter era, I joined the fad of pastel dress shirts with garish hand-painted ties. Women wore bright-print dresses with full A-frame skirts that swayed with their stride. New cars were painted flashy tri-color combinations of pink, purple and red.
Back in the depression years and during the war, cars were drab gray, olive green or mostly black. Today black or white is favored, not only for cars but in clothing. Any color offered is subdued or in shades of drab gray and denim. Does it mean a deeper recession is ahead?
No less an authority than The Economist explored the theory of dress codes to fit the times. An article last February noted that for several years business suits and ties were headed for extinction, along with profits, proven products and payments in cash. That was stodgy Old Economy. "Business casual" evolved from dress-down Friday to everyday grungy as the acceptable New Economy dress code.
The boom bubble burst, and the new vogue became "dressy casual." The re-appearance of the conservative business suit is the modern equivalent of the old hemline theory promulgated by George Taylor, an economist at the University of Pennsylvania in the 1920s.
Sending a signal of deviation, The Economist also noted that female business executives are inclined to wear tailored pants suits as the perfect attire for hard economic times. It speaks of self-discipline as an image to project. It also speaks of dullness as a welcome contrast to the razzle-dazzle days of dot-coms. If the pants suit for career women takes hold, the hemline theory might become redundant.
An alternative guideline could be the current fad of hip huggers. Does a low waistband exposing the navel mean a market downturn?
Another news-breaking validation that conservative fashion is back was the shocking debut of Fidel Castro in a double-breasted, pinstriped business suit to greet Jimmy Carter on his May peace mission to Cuba. Fidel looked good out of his traditional fatigues, the nonconformists' version of business casual, but the image was tainted by his black running shoes. Casual dress habits are hard to break.
Following my conviction that colors can be a prophecy of economic cycles, I tried to interpret what body piercing and tattoos means to the stock market. That is a tough fad to understand. Does body mutilation send a statement of purpose?
Clinical psychiatrists no doubt have a variety of answers. I don't see the popular craze lasting long nor sending a signal for new economic trends. Let's just say body adornment is merely a way for young persons to express themselves, something their parents and mentors have advocated for years. It will be over when they look closer in the mirror and ask themselves, "What am I doing?"
For five decades I have followed the multitude of economic cycles that resemble a typical Value Line chart. Maybe these academic hypotheses of fiscal booms and busts are reliable guidelines. I submit that the hemline, color preference, and even the Big Mac Index, are not silly notions but indicative of people's outlook for the future. Just look at fashion fads today for signs of consumer outlook for tomorrow's economic cycles.
Ford is a freelance writer located in San Diego. He can be reached at firstname.lastname@example.org.