We're Europe's bargain bin.

Commentary about business and finance.
June 12 2008 12:38 PM

We're Europe's Bargain Bin

The pain of watching foreigners buy up Manhattan.

Shoppers. Click image to expand

When I sent out the invitations for my December New York City wedding, my European guests were flushed with excitement—and not entirely over the event itself. They arrived en masse, flashing credit cards, ravenous to pillage the stores. iPods were bought; champagne was ordered before water in restaurants; even my impoverished-artist friends were giddy with newfound buying power.

"Thank you for throwing your wedding during the holiday sales," said one, calling me from an uptown department store. "It was good enough getting it all half-off, but now it's like a posh bargain basement."

At the time, I was too busy to feel jealous or left out. And anyway, who could take the decline of the dollar personally, for God's sake? If anything, I saw the situation through the prism of ironic detachment: Wasn't it all so interesting, how the tide was turning? New York City, once a formidable fortress of look-but-don't-touch, was becoming practically kittenish in its accessibility.

But six months later, the joke is wearing thin. Despite some rah-rah rallying this week in response to a pep talk from Fed Chairman Ben Bernanke, the dollar has fallen 11.5 percent against the euro and 7.2 percent versus the yen since September 2007, and it continues to limp along.

So the European conquest proceeds. Realtors partially credit the strength of the Manhattan residential real estate market to foreign investment. Jim Gricar, executive vice president and director of sales at Brown Harris Stevens, estimates that such purchases may have spiked 15 percent recently (others have placed the estimate as high as 25 percent). In the ultimate gesture of pragmatism, some American women are reportedly paying as much as $6,000 a year for membership to dating services that introduce them to British men.

"It's a fire sale," the owner of one such service told the New York Post.

Market-savvy opportunism? I guess, but frankly, the latter trend just grossed me out, like seeing a bunch of scabby rats flee a sinking ship.

Not that you can blame the Europeans in this equation: They're simply taking advantage of their good luck, as we've done before. Indeed, our country owes a chapter of its most important literature to the dollar's former strength overseas, allowing expats like Fitzgerald and Hemingway to revel in the then-cheapness of Paris and the French Riviera. It's just unfortunate to be part of a generation in which these particular cards have turned on us.

And on some level, we should be quite grateful to our European patrons—as Floyd Norris recently suggested in the New York Times, it's entirely likely that European tourist spending in Northeastern cities is just about the only place (except gas) where U.S. consumer spending is on the rise.

Still, there's truth to the old adage that you eventually grow to resent your benefactors. It's undeniably depressing that we're relying on European tourists to prop up our economy. What makes it worse: Our consumerist benefactors don't even like us. International opinion of the United States and its inhabitants has tanked over the last eight years, practically eviscerating fond memories of Americans as midcentury saviors of the free world.

As we become increasingly dependent on the currencies of strangers, certain anxieties bubble to the surface. Even the least economics-minded among us is now being reminded that while individually each of us is a peripheral character in the drama of international market forces, collectively we're stuck in the cast whether we like it or not.

The particular anxiety most interesting to me is certainly not premised on xenophobia or defensive jingoism; instead, it stems from being shamefaced by our new national poverty and grim economic prospects. And as parents have told naughty children for centuries: We have no one to blame but ourselves. We've overspent and overreached, and the world knows it. We can't afford to run the enormous, gas-guzzling, environment-savaging cars we can no longer afford to manufacture; our houses are being foreclosed on in swaths; and frankly, it's damn humiliating.

But the shame goes deeper than that. Even with America's centrality in world affairs for the past century, we've harbored something of a hidden cultural inferiority complex. Ours is not an ancient society; we've never been especially known for our cultural sophistication or outward-looking curiosity. Comparatively, we are not well-traveled, and most of us struggle through high-school French and leave it at that.

Yet somehow through the end of the 20th century, we could hide from any feelings of inadequacy by hiding behind the protective shield of our economy. If, by contrast, other nationals found us ham-fisted and naive, it never really mattered because our country was rich and theirs was usually dependent on ours in some way. When in Europe, we admired their lifestyle and intimidating sophistication, but we never would have swapped our bullish work ethic or earnestness for their double-digit unemployment or sclerotic bureaucracies.

But these days, we're being humbled on a world stage. Perhaps—in addition to our more overt financial and military embarrassments—we fear that our European counterparts believe the dollar's decline is symbolic, that the world really is in a post-America stage and doesn't care about us anymore except as a bargain bin. We're finally being unmasked as the hunky-dory, cultureless brats they've always assumed us to be: that we have nothing left to give.

Which makes the subtext of their conspicuous consumption in Midtown a knowing acknowledgment of our comeuppance. We're not only inferior on their turf, we're feeble on our own.

Ah, well. Since Americans will be doing a lot less globe-trotting (or even nation-trotting) this summer, we've got spare time on our hands. Why not use it to develop attributes that might impress our wealthy visitors? Here's one that might come in handy, one of the most time-hallowed benchmarks of European sophistication: gallows humor.

Lesley M.M. Blume is an author and journalist based in New York City.



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