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Consumers Do Their Part To Keep Economy Moving

By Maureen O'Donnell | September 24, 2001
Staff Reporter | Chicago Sun-Times

If consumers are holding back because of terrorism, you couldn't tell at Abt Electronics Sunday. The parking lot was so jammed it needed an attendant to direct cars. The noise level from customers and big-screen televisions was deafening. In other words, it was a typical Sunday at the Morton Grove store. "It's important to move forward and not let it disrupt your life," said Art Laguna, 28, of Wheeling. Laguna feels strongly that people need to keep up with their routine. Otherwise, he said, the terrorists win. On Sunday, he not only shopped for a big-screen TV and appliances, he and his fiancee put in a bid on a home. "The last thing we need to do is to stop spending," said his fiancee, Michelle Krtanjec, 26. "If we keep up the spending, that'll be good for the economy." Both are human resources consultants for Hewitt Associates, and a number of their clients were in the World Trade Center at the time of the Sept. 11 attacks on the twin towers and at the Pentagon. Laguna and Krtanjec exemplify a pillar of the U.S. economy: the resilient American consumer.

BankOne chief economist Diane Swonk says this country's consumers have shown an "extraordinary ability" to shoulder burdens. She's predicting short-term pain, long-term gain. Consumer confidence was softening even before the World Trade Center tragedy, "probably in response less notably to the sharp declines in the stock market," Swonk said. And preliminary surveys after the tragedy "have been very bullish, actually reversing some of the earlier loss in trends in consumer confidence," Swonk said. "But it's hard to tell whether that's just a patriotism reaction or if that's a real reaction." The attack "may set us up for a very weak next several months, but we will get through this period," Swonk said. "After the upfront losses, which will be a recession, we will get to better economic times than many had imagined, possibly in later 2002," Swonk said. That's thanks to spurs such as expected cuts in interest rates by the Federal Reserve.

Despite the terrorist assault, a steady downpour and a full NFL television slate, potential homebuyers streamed in and out of open houses Sunday in Lake Forest. They expressed caution, but said they refuse to be paralyzed. With previous downturns in the market, "This is a bad time to be extending oneself, notwithstanding the New York bombing," said Marc Cardoza, 32, of Deerfield, a soybean trader at the Board of Trade. He studied a four-bedroom ranch home with an asking price of $529,000 in the 800 block of Northmoor in Lake Forest. But the North Shore isn't reliant on sometimes-ephemeral industries. A lot of this area is not dot-com start-up," Cardoza said. "A lot of this is just money from the solid industries; you've got banking industries, and the young people can trade up and move." "If there's a right price for something, people are going to buy it," Cardoza said.

Chuck Lang is the Prudential Realtor who showed the home Sunday. His clients haven't blinked. He has one client moving ahead with plans to relocate his business, one eager first-time homebuyer, and "I have someone who wants a piece of property for a summer home and SHE WANTS IT," Lang said.

Funeral director Mark Reinert, 45, of Lake Forest, has lost over $100,000 in four months because of the faltering economy, but he, too, was house-hunting Sunday in Lake Forest. His children have asked him: "Are they going to be attacking Lake Forest next?" He reassures them, and makes even more time to spend with them. As for himself, "I stay active, keep looking ... you go back to your basic routines that just get you through day to day."

"We obviously don't want the terrorists to put us in fear of getting on with our lives and proceeding with our goals and dreams," said patent attorney Joseph Mahoney, 37, of Glencoe, who toured a Lake Forest home in the 700 block of Barat Court with a $869,900 asking price. "We're getting on a plane in three weeks," added his wife, Suzanne, 32, who held their 6-month-old daughter, Claire. "You can't let that paralyze you."

"Certainly it gave us a great deal of pause, but the thing to do is move on and see what we can do to be positive about the situation," said Lincolnshire resident Gloria Allen, 50, who studied the Barat Court home shown by Patti Johnson of Prudential. "A house is something pretty basic," Johnson said. "It's a need that we all have.'

At Abt Electronics, vice president Billy Abt said business slowed for two or three days after the attack, but "by [that] Friday we were back up and running," Abt said. "I think people are almost wanting to buy now because they want to stimulate the economy and get things going," Abt said.

"I haven't held back with any of my spending," said Anthony Campobasso, 23, who was shopping for a DVD player with his brother Peter, 33. Peter works in construction with his father at Suburban Wide Construction and "the phone is still ringing off the hook" with jobs laying foundations and driveways, Peter said.

Machinist Dave Scott, 31, of Wheeling, eyed a $1700 Panasonic Shiatsu massaging easy chair at Abt. "People are probably buying things because they don't know what's going to happen," said Scott. "You've got to live for the day."

President Bush's inner circle is another reason for confidence, Krtanjec said. "Bush has all the best people. . . . they were all in charge in leadership roles during Desert Storm, Colin Powell, Cheney."

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