Ho Ho Humbug

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Merry Christmas!

That was about the cheeriest sentiment Americans could manage last week, as the country caroled, gift-wrapped and tinseled its way through the holidays in search of some deeper tidings of comfort and joy. For those with a global perspective, there is plenty to inspire gratitude this season: the country is not (yet) at war; there are families in Romania, Germany, Hungary and Czechoslovakia sharing the holidays in freedom and safety for the first time; Frank Sinatra just celebrated his 75th birthday. But try as they will to count blessings, many Americans who read the newspapers, check their bank statements or listen to the tinny jingles from Washington have a hard time believing that 'tis the season to be jolly.

If people's behavior is unnaturally -- even unnecessarily -- gloomy, it is easy to understand why. They feel less rich, less safe and less certain about what the future holds than they did in Christmases Past. In the real estate fantasylands of California and the Northeast, homeowners who think they live in a $300,000 house suddenly "lose" $80,000 when they try to sell. In Chicago out-of-work architects are invited to lunch at a soup kitchen for a bowl of chili and some free advice from colleagues who have survived previous recessions. Washington hairdressers report that business is down: in hard times, people let it grow. And as long as the nation is stuttering toward war, there is no predicting when the job market will open up again, or prices stabilize, or tension ease.

The irony of any recession is that fearing it makes it worse. Consumer spending accounts for two-thirds of America's economy, which means that when buyers are spooked, the rest of the economy shudders. In the last shopping days before Christmas, stores across the country were already thick with post- holiday sales. Some items were moving nicely: oversize freezers to keep groceries bought in bulk; wood stoves to cut down on utility bills; shoe trees, mason jars, sewing kits, to extend the life of life's necessities; and any $5 present that looked as if it cost $25. At the IKEA store in Elizabeth, N.J., shoppers could lease a Christmas tree for $20 and get $10 back if they returned it for recycling into mulch.

Beneath the retrenchment and return to basics one can see the mark of American Calvinism, as consumers pull back and repent what many now consider the evil excesses of the Reagan years. The doomsayers seem to be savoring the chance to put priorities straight. "When the stock market crashed in '87, people thought the party was over -- the bar was still open but the band went home," says a young financier who has been laid off by the junk-bond department of a New York City investment bank. "Well, now the bar has closed."