January 29th, 2009
09:00 AM ET

How much is a lot of money?

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/01/21/art.market.anon.jpg]

Michael Schulder
CNN Senior Executive Producer

A CNN reporter submitted a script that started with the line: "Airplane maker, Boeing, posted a fourth quarter loss of 56 million dollars." My first question to the reporter was: "Is 56 million dollars a lot of money for Boeing to lose?" I was serious. I don't know what a lot of money is any more.

Too many companies have lost too many billions too quickly for me to get my arms around the value of a dollar. According to the Senate Appropriations Committee, U.S. stocks - that is, stockholders - lost about 7 trillion dollars in value this past year. And 25 banks failed with total assests of $373.6 billion. So when I saw that script announcing that America's biggest manufacturer of airplanes lost $56 million I wasn't sure if I should be feeling, "Oh, my Gosh!" or "Oh, what a relief! ONLY 56 million."

Then came the second part of the story. Boeing, which employs more than 160,000 people from high-tech to low-tech and everything in between, plans to lay off 10,000 workers. Add that to this "bloody Monday" announcement of 71-thousand layoffs by 7 major U.S. corporations. It seems like 10,000 layoffs per company is the magic number this week.

All this helps explain why I saw what I saw at the CVS pharmacy Tuesday night. I was there picking up a prescription. At the checkout counter, on the waist-high shelves, the most prominent space for those last minute purchases where you're usually tempted with candy and gum, was a hefty supply of Campbell's soup. $1.49 a can. I've never seen Campbell soup so prominently displayed at a CVS.

CNN repoter Alina Cho last week reported that Campbell, along with Wal-Mart and other low cost brands, has been a beneficiary of the deep recession. Condensed soup sales are up 14 percent.

And one other thing I noticed at CVS. There, to the immediate left of the pharmacy checkout counter was a tall rack filled with prepaid credit cards. Visa, Mastercard, and other big name brands. They were blank. No application necessary. No credit history relevant. Just cash. You put money on the card and use it until its empty, then fill it up again if you can afford to. There they were, at the CVS pharmacy checkout counter.

These are the bookends of our new economy. Campbell's soup on the right, prepaid credit cards on the left. (Medication in the middle.) It's part of the new American ethic - get your finances under control. Reduce your debt. Pay as you go.

Which helps explain why, at the very moment I was writing this, CNN got an email from Starbucks announcing more store closings and job cuts. The company plans to reduce its workforce this year by 6,000 people. And it plans to close 200 more U.S. stores, in addition to 600 other store closings announced over the summer. Again, to put it in perspective, Starbucks is not a dying company. Coffee drinkers around the world spent $2 billion at its stores during the last three months alone. (And Boeing, by the way, despite a 25 percent drop in sales, still sold more than 12 billion dollars worth of planes and other high-tech equipment during the last quarter of 2008.)

But here's the fine print that tells the deeper story. Look at this phrase from the Starbucks email: "Given the uncertainty (my italics) in the global consumer retail environment, Starbucks is not providing revenue and earnings guidance at this time." Remember that. The economy is in such a state of uncertainty that Starbucks, and a number of other companies, are unwilling to even provide guidance on how much money they anticipate making.

Last night, the House of Representatives passed an $819 billion stimulus package to get the economy moving again and create jobs. How much is a lot of money? Answer: uncertain.

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Filed under: 360° Radar • Economy • Michael Schulder • President Barack Obama
soundoff (9 Responses)
  1. Annie Kate

    I'm with you – I don't know what a lot of money is now either – I just know I don't have it. Sort of feels like Monopoly doesn't it? And yes those prepaid credit cards are nice – they make good presents and came in handy at Christmas since I wasn't sure which stores would be in business long enough for a gift card to be a viable present.

    January 29, 2009 at 9:42 pm |
  2. Amanda Walton-Ontario Canada

    It is hard to determine these days what is alot of money when you hear the numbers billions and trillions seeming to be thrown around, companies loosing million to billions, this exec making 4 million dollar bonuses. Whenever I hear these values I can't help but picture Dr. Evil saying I'm holding the world hostage for $700 billion dollars.

    So when I read your column and thought about it I determined what I think alot of money is. When I can look at my bank account or paycheck and know whatever number is showing is because of my hard work and dedication to what I love doing everyday. So whether it's $1 dollar or $1 million dollars, as long as the figure is done with a clean conscience and hope help at least one person or more if possible, then that in itself is priceless.

    January 29, 2009 at 3:33 pm |
  3. jarrod

    I had a couple of guys work for me that worked at Boeing here in ohio they were on the maintenance crew they were paid 7.10 per hr with a .10 cent raise after 90 days (I would not clean no toilet for that kind of money with that type of future incentive no wonder work ethics are going down the drain).

    January 29, 2009 at 12:48 pm |
  4. jarrod

    I always thought $40,000 to $60,000 was middle class guess i was wrong according to the latest statistics i am poor white trash!

    January 29, 2009 at 12:37 pm |
  5. Michael "C" Lorton,Virginia

    Boeing, well a corporation can never be too greedy--they have profited a lot in the past---and now they are realizing that there is no return on investments for being too greedy--and we know one can never be too greedy.

    January 29, 2009 at 10:43 am |
  6. xtina, chicago IL

    I don't think Barack Obama even cares that by passing this bill he increased the national debt by 10%. Just with this bill alone; I think that is some sort of record.

    January 29, 2009 at 10:39 am |
  7. David

    I'm an assistant store manager at a Sears Essentials, business is declining fast. Retail right now is drowning in this bad economy, i'm hoping President Obama's stimulus package can bring some relief in getting people to work and spend. There's not much change in news, all you hear about are job losses and how much deeper we're sinking into this recession. I believe in order for this stimulus package to work, both Democrats and Republicans in the House and Senate have to be on the same page in believing in our new President's decision to push this package. What else can government do for the economy right now other then spend?

    January 29, 2009 at 10:19 am |
  8. earle,florida

    Fantasic ,and satirically funny article Mr. Schulder. Long ago, I stopped trying to rationalize these huge numbers, when I learned what , "America's Corporate Elite" get for a paycheck! All I do is say to myself ,"this is my paycheck per week,live with it",and that's all. Simply put realistically this is at most, "how much is alot of money to me"?PS It's all on paper, and we see what the value of paper is worth today.

    January 29, 2009 at 10:13 am |
  9. Kiki

    So Have the republicans come up with a good plan yet, or ar they once again short!! The economy here in Wy isn't quite as bad as it is in other states, but it can't withstand to much more, over 200 people have been laid off as a result of this backward spiraling, when will this all stop?

    January 29, 2009 at 9:57 am |