I went to the mall over the weekend to see if I could gauge any fallout from the near-doom the country’s economy nearly suffered last week before the “rescue plan” was passed.

I went to Woodfield Mall in Schaumburg, a western suburb of Chicago. It’s one of the largest indoor malls in the country, and the largest in the Chicago area (although the Mall of America in Minneapolis dwarfs it.)

It was a lovely 65 degree and sunny day in Chicago. Given the time of year, I expected people to be out at pumpkin farms or apple orchards enjoying the nice weather before winter arrives (too soon, unfortunately.)

But I was wrong.

When I pulled into the parking lot, it was crowded. Not holiday shopping crowded, but not doom and gloom either.

It was just as crowded inside the mall.

I was suprised by this. What financial crisis?

No one in that mall had a clue that the banks were failing.

Discount Stores Still Rule

There was a distinct difference in the crowds in the individual stores, however.

The discount specialty retailers were packed. Literally- lines out the door. Those included Forever 21 and H&M. Teenagers were mobbing both stores.

Moderately expensive stores like The Gap had some foot traffic but no lines at the registers. It’s sister store Banana Republic was a madhouse but only because it was still advertising a 30% off sale (and, in some cases, 40% to 50% off certain merchandise.) There were lines at the registers at Banana.

The upper end was dead as a doornail. That includes such women retailers like Ann Taylor, Talbots, Anthropologie and JCrew.

JCrew was interesting to me. I normally peruse the downtown Chicago store on Michigan Avenue which is always quite crowded and where the merchandise seems to get picked over quickly.

The JCrew in Woodfield was so dead you could have rolled a dozen bowling balls from the front of the store to the back and not hit anyone. Same with Talbots, even though sweaters were 20% off there. It was so quiet it was almost like being in a library.

Could the difference in the JCrew stores have to do with foreign tourists? I wonder. Because the difference between the suburban and downtown store was illuminating.

Department Store Have and Have Nots

The same disparity was obvious at the department stores in the mall. Nordstrom and Lord & Taylor, both upscale brands, were dead. Neither had serious sales, so who wants to pay full price right now?

Conversely, Sears was surprisingly busy. I don’t know if the foot traffic was translating into sales though. It looked like people were browsing.

Were People Carrying Bags or Just Looking?

From the number of bags being carried, there looked to be quite a few people buying- especially at stores with sales. And the teenagers looked to be a force to be reckoned with.

But maybe the absence of shoppers at the upscale stores, the very stores that would appeal to “grown-ups”, so to speak, tells you all you need to know about what is going on in the economy.

Or maybe not.

One thing was clear. “Going to the mall” on a Saturday afternoon was still the American past time this last weekend here in Chicago. People seemed to be enjoying themselves as they bought fast food goodies, sampled the new iPod at the Apple store and otherwise checked out merchandise.

Did you think Americans would lose their consumeristic tendencies that quickly?

Financial crisis be damned.

We still want that Coach purse (which, by the way, was bucking the trend of the expensive store being dead as it appeared to have a lot of foot traffic. Go figure.)

Perhaps consumer behavior will change in the coming days and weeks. I will again be checking out the malls in the near future.

With 2/3rds of GDP coming from consumer spending, it’s the one way to really guage what is going on in the economy.

The Mall was crowded.

For now, that says it all.

Did anyone else see Suze Orman on the Oprah Winfrey Show this week?

Suze was PISSED!

She was going off on one couple on the show that has $90,000 on their 29 credit cards and no way to pay their mortgage.

Basically- her view was that that couple, plus most of America, has been living a lie.

A Nation Built on Lies

This has been going on at least a decade- but probably more. I trace it back to the early 1990s when Americans, who used to save about 8% of their salaries in 1990, started a downward slide into debt and endless use of plastic.

The bull stock market of the 1990s “saved” many people from the abyss (as long as they cashed in some gains before that crashed in 2000.)

Then, it was housing to the rescue. People gave no thought to taking out a home equity loan for $50,000, $100,000, or even $200,000. It was like winning the lotto.

Remember the radio ads from the banks? They said things like, “let your house work for you.”

Except houses don’t “work”- humans do. And it was debt that had to be paid back.

That was Suze’s point this week. Americans are overextended and most are living a lie. They can’t really afford those houses they bought in the last 5 years.

They lease their cars because they trade them in every 2 years.

Clothes, purses, sunglasses and other status symbols are bought on credit cards and, in some cases, won’t be paid for for 10 to 20 years.

None of it was real. It was bought with play money.

And now we’re going to pay the price for the illusion of wealth. We’re going to have to make some cash and save some cash instead.

Welcome to the new reality!

The Bailout Isn’t Just About Wall Street

Look in the mirror. What have you bought on credit?

The $700 billion is a way of paying for the excesses that all of us entered into. This wasn’t just a Wall Street problem.

Look up and down your block. How many people on that block have savings to retire? How many have significant equity in their homes? How many can pay for their kids’ college education?

A few can. But most can’t.

Debt isn’t freedom. It’s the opposite.

This credit crunch will not end until the excesses are purged from the system. As Suze Orman said- we have to face the truth. We can’t afford these things in our lives. We must turn to a different way of living.

And America will do so. It always has in a crisis. A strong economy will result, in the end, but not without some serious pain first.

We must all look in the mirror.

Privatizing Social Security was the cornerstone of the Bush Administration’s “plan” to save Social Security.

Remember the “ownership society”- where all Americans would have a stake in Wall Street?

The government bailout of Wall Street last week has put the final nail in the coffin of privatizing social security.

Why do I say that?

Look at the Main Street public’s reaction to this crisis. Many are yanking money out of stocks and running to the banks to yank money out of money market accounts. Imagine millions of Americans doing the same with the trillions in their social security accounts?

But even more striking are the stories coming out of, frankly, just plain bad investing.

Betting on the Banks

Everyone makes investing mistakes, even Warren Buffett for goodness sakes. But when you’re talking about retirement accounts, the mistakes can be devastating.

I’ve already talked about the California man who lost $100,000 of his sons’ college education fund buying Freddie and Fannie at $6 before it tanked.

But there are other similar stories out today about investors close to retirement who put big chunks into Freddie and Fannie (also near $6 a share)- thinking they would hit it big. Instead, their accounts are now down 20% or more and they may have to work several extra years instead of retiring.

And this is what people wanted when Social Security was privatized?

For every “smart” investor- there would be dozens of, let’s put it frankly, “dumb” ones.

With the collapse of Wall Street as we know it- the lure of putting the nation’s retirement accounts into the hands of the financial titans is now gone.

What happens to Social Security now?

With the current financial crisis, the political will to “save” it likely won’t be there for at least several years. Yet, social security lurches towards insolvency in less than 10 years.

I don’t mean to rain on people’s parades given the current financial crisis. But another one is fast approaching.

If privatizing Social Security is off the table- what will replace it? How can Americans save more for retirement?

According to the Wall Street Journal- the Baby Boomers are going to get hit hard. They have little in savings - and many were planning on their homes to provide for retirement. But that plan has now changed.

Consider: Less than one-quarter of workers age 55 and older — just 23% — have savings and investments totaling $250,000 or more, according to a study published in April by the Employee Benefit Research Institute in Washington. About 60% have less than $100,000.

There are lots of changes coming in the world of finance. Privatizing social security will NOT be one of them.

There have been several articles over the past few days talking about how badly New York City will get hit economically by this financial crisis.

Investment banks are going under and thousands of people will lose their jobs. But many will be absorbed by other companies and life will go on.

The real difference now is that with the end of the investment bank as a solo operating entity, like a Lehman or a Merrill, the era of huge bonuses will also probably come to an end.

When has Bank of America ever paid mega-bonuses? Don’t get me wrong. I’m sure they pay very good bonuses. Even stellar bonuses. But they didn’t pay the size bonuses a Lehman or a Merrill was paying.

And it was the bonus that propped up the Manhattan housing market for so many years.

You know- the housing market that the “experts” said could never decline. The housing market that was “immune” to a downturn because there was simply too much money in New York and, of course, “everyone wants to live there”.

Maybe we might find out with this bust- that everyone DOESN’T want to live there after all.

This financial bust isn’t just re-wiring Wall Street, it will re-wire New York’s money culture.

It’s only fitting that this comes at a time when a Russian fertilizer Billionaire is suing the Plaza for his condo deposit because his $50 million penthouse turned out not to be so great after all. He never saw the condo before purchasing it. He bought it completely site unseen.

Those were the excesses of this bubble. And now they’re going away.

I don’t know how long it will take- but normalcy will return to Manhattan’s real estate market. It likely won’t be “cheap” to live there, but at least it can be affordable.

Maybe that will be one of the positive things from this financial crisis. A return to housing sanity.