America taking shape as land of the frugal

New ethic may outlast recession

CUTTING BACK Author Bill McKibben says the inauguration on Jan. 20 will mark the transition from frivolousness to seriousness.

WASHINGTON - Embarrassed auto industry executives trade their private jets for hybrid cars. The reality TV shows "Secret Millionaire" and "Extreme Makeover: Home Edition" celebrate those who give to others. And next month, the nation will exchange a presidential image of Texas oil wealth for one of modest, multicultural roots.

A new ethic is taking hold in America: cutting coupons is considered savvy, opulent parties are regarded with distaste, and trimming Christmas spending is seen as not only sensible, but laudable.

And while the changing national attitude is largely driven by the bleak fact of the economic recession, some social analysts say the trend is likely to be more enduring - a rejection of glitz and excess that mirrors the transition a century ago from the Gilded Age to the Progressive Era.

The shift in attitude is palpable in the nation's capital. The lavish holiday parties hosted by lobbyists and think tanks are fewer and more modest this year.

"Unless I've dropped off a lot of people's lists, there were a lot fewer invites this year," said Peter Mirijanian, a well-connected Washington public relations agent. "People don't want to look like they're overdoing it, going over the top" in holiday celebrations.

And while the poor economy is certainly a factor - the Pew Center for People and the Press recently reported that 73 percent of Americans are limiting Christmas spending this year because of economic uncertainty - the tone that President-elect Barack Obama's team is setting is driving Washington culture as well, Mirijanian said.

"They want to mirror the populist message that the incoming administration wants to send," he said.

But the election of Obama - who is spending his transition making somber-faced pronouncements on the ailing economy - merely reflects a transformation the public has been moving toward for some time, according to consumer analysts.

"You see people cutting back who don't have to cut back. There's a sense that it's unseemly to celebrate in the same way people used to, [now that] so many people are in the depths of despair at the moment," said economist Robert H. Frank, author of "Falling Behind: How Rising Inequality Harms the Middle Class."

"A lot of this spending that was going on before was spending that people now would be embarrassed about," Frank said.

The transition from President Bush to Obama is a political expression of that change in national mood, analysts say.

"There couldn't be a better symbol of the transition from frivolousness to seriousness than the one that will happen in Washington on Jan. 20," said Bill McKibben, an author who advocates a return to less extravagant living. "We've gone from a guy whose real-world experience prior to being president was owning a baseball team, to a guy whose real-world experience was organizing poor communities on the South Side of Chicago."

Representative Barney Frank, Democrat of Newton, said he tried unsuccessfully in 2006 to rein in corporate executive compensation with a bill to allow more shareholder control of the outlays. Corporate leaders and fellow lawmakers saw the idea as unfair government meddling in the private sector, he said.

"Now, I'm getting criticized for not being tough enough on executive compensation," the congressman said. "There is clearly this sense, that has sharpened, of the unfairness of it all, economically."

The Obama inauguration itself is also shaping up as a more modest affair. While presidential inaugural spokeswoman Linda Douglass said she does not yet know how the overall cost will compare with previous inaugurals, the celebration itself will have an "inclusive . . . open and accessible" theme to it, she said. Representatives of both the Peace Corps and AmeriCorps have been invited to join in the parade, underscoring Obama's calls for national service.

The unofficial inaugural parties in January will include the Green Inaugural Ball, with former vice president Al Gore as honorary host, a sign of the influence of the environmental community.

"The confluence [driving the scaled-back consumption] really is between pocketbook issues, the credit crisis, and debt, combined with a real recognition with what we are doing to our planet," said Kalee Kreider, a longtime environmental activist who now works for Gore. "It's created a perfect storm. People are making real changes."

Even manufacturers of high-end products see the change - and are embracing it, said Milton Pedraza, CEO of the New York-based Luxury Institute, which tracks spending and investment in luxury products.

Pedraza said he recently had breakfast with 15 executives from luxury-brand firms, and nearly all agreed that the trend toward more selective consumption was ultimately better for their companies, since it made the products more special.

"People were charging ridiculous prices, people were paying for labels that didn't really mean anything. It was more fashion than true luxury, Pedraza said. "That kind of consumption I don't think is healthy for anybody."

The shift is also evident in popular culture.

Talk-show host Oprah Winfrey this year downgraded her annual holiday "favorite things" to simpler, lower-cost items, instead of the $900-plus camcorders featured in wealthier times. The HBO hit "Entourage" - whose mostly-male cast celebrates consumption of high-priced cars and electronics - has also updated its story line, with rapper Bow Wow buying a practical Prius instead of a sports car.

Dialing down the spending is not just a predictable consumer response to an ailing economy, said McKibben, author of "Hundred Dollar Holiday: The Case for a More Joyful Christmas."

"People understand, on a visceral level, that the pursuit of all that flash got us into the trouble we're in," McKibben said. "Excess consumption turns out to be not just in bad taste, and not just wrecking the world environmentally, it's also precisely the thing that over the last 10 years has destroyed our economy.

"I think everybody's wanted out of this for quite a while, and they haven't known how to do it," he said.

Mary Hunt, who runs the newsletter "Debt Proof Living," formerly "Cheapskate Monthly," began a daily e-mail report in July on saving cash. In the few months since then, the subscriber list tops 100,000.

"Something has happened. We've had a good dose of reality" driven by the poor economy, Hunt said. But her subscribers, she said, are not just grudgingly pinching pennies; they are eager to adopt a simpler lifestyle.

"There is something dignified about making your life fit within your income," she said.