As Markets Fall, Liquor Sales Rise

Whether you make your living on Wall Street or Main Street, it's been a rough few months for the American economy.

Since the end of August, stocks have lost a quarter of their value, 1.3 million more Americans have found themselves out of a job, the government has had to bailout out A.I.G., Fannie Mae, Freddie Mac, and Citigroup -- in addition to committing $700 billion to buy up the troubled assets gumming up the credit market.

Meanwhile, hedge funds are imploding at record rates; the U.S. auto industry is on the brink of collapse; and as if all that wasn't enough, we can thank Bernard Madoff for a bonus $50 billion in vanished cash. Yep, it's enough to drive you to drink.

And apparently, it has.

Spirits sales rose 2.4 percent nationwide between the end of August and mid-November, compared with the same period a year earlier, Nielsen Co. data shows. Sales of wine increased 4.5 percent by dollar value in the same time frame, while beer sales grew 1.6 percent from mid-August to the beginning of November.

That should come as no surprise, since no less an authority than the Mayo Clinic says that "high levels of stress, anxiety or emotional pain can lead some people to drink alcohol to block out the turmoil."

In addition to relying on alcohol to suppress anxiety, many people also use it -- wittingly or not -- to deal with depression. Alcohol, it seems, increases serotonin levels in the brain -- just as Prozac and "junk food" do.

(That may explain why McDonald's stock actually rose over the last three months, even while the Dow Jones Industrial Average has plunged.)

With that in mind, it's probably not a coincidence that the sale of beer has risen slower than that of stronger spirits. Suds might be enough to take the edge off, but wine and hard booze is the stuff that really lets you keep reality at arms length. Sales of vodka and whisky have been particularly popular, up 5.5 perfect and 3.4 percent, respectively, this fall.

Those single digit sales gains might not be noteworthy during a period in which personal consumption in general was trending upward, they came even as retail sales overall fell 2 percent, the Commerce Department says.

Do we know for sure that recent financial turmoil is driving people to drink? No, but we do know that Americans are spending a greater share of their disposable income on booze ... and it's probably not because they're in the party spirit.

by Liz Gunnison