PD Editorial: Excess defined

<p>It's hard to know how to respond to the tribulations of Robert W. O'Neel III, as reported by Staff Writer Derek J. Moore (“ ‘I crashed and burned,' ” Sunday).</p><p>Are we supposed to feel sorry for him? </p><p>Most readers probably have a hard time relating to someone whose now-shattered dreams included hanging 15 chandeliers in his wine caves.</p><p>Most of us can't afford a wine cave — let alone a $40 million Boeing 737, a $385,000 Mercedes-Benz, homes in Hawaii and a $16 million uncompleted estate in Sonoma County's exclusive Shiloh Ridge area.</p><p>In the end, it appears that O'Neel really couldn't afford those things either. The private jet, the fancy cars, the ambitious plans for ski resorts and major housing developments are all gone. What's left is an uncompleted mansion with a golf course view and a story that defines the excess of those days, the days before the roof caved in on the economy and the lives of many people, from Wall Street investment bankers and mortgage lenders to those who bought homes they couldn't afford.</p><p>In that regard, O'Neel's “crash,” while grandiose, is not particularly unique.</p><p>Thankfully, a new narrative is emerging. Americans appear to be changing their ways and getting wiser about their money.</p><p>As reported by the Federal Reserve this week, consumers slashed their borrowing in July by the largest amount in 65 years. Consumers cut back on their credit by $21.6 billion from June to July. That's about $17 billion more than economists had predicted.</p><p>Granted, much of this shift is due to banks clamping down on lending. They're slashing credit card limits and scaling back on new loans. But it's also clear that, with unemployment at a 26-year high of 9.7 percent, Americans have learned, the hard way, to be more frugal. A survey of banks last month found that there was, in general, a weaker demand for all types of loans. Demand for non-revolving credit — used to purchase one-time things such as vacations or cars — fell by $5.4 billion in July.</p><p>The downside of this trend is that it signals a sluggish recovery. Consumer spending accounts for about 70 percent of our nation's economy.</p><p>But a slow recovery is not all bad, especially if it signals the return of some old-fashioned ideas such as not buying a house, car or Boeing jet unless you can actually afford it.</p>