An interesting coincidence in analyses this week, in James Surowiecki's note on Starbucks recession-proof fortunes and the contrasting discussion by Daniel Gross of Restoration Hardware's woes.

Restoration Hardware, if you haven't been exposed, is a kind of an intensification of the Marketing of Nostalgia that one sees in more dilute forms in retailers from J. Crew to The Pottery Barn. The idea is high-end fake vintage, with an emphasis on recently trendy American midcentury styles. You can buy an "Ike-like" record player or a gas-powered handwarmer. It's a wonderful example of the ability of marketers to kitschify everything.

Gross's discussion of the failure of RH to become profitable comes down, in his view, to a lack of flexibility on their part --he notes, "Restoration Hardware trumpets its 'classic and authentic American point of view.' Positioning yourself that way is a Catch-22. By definition, that means you're not going to be rolling out new fabrics and styles every few months. And yet consumers are fickle. They get tired of sameness. Restoration Hardware might do better if it were less classic and less authentic. " He goes on to note that Starbucks, which serves a similar demographic, has the good sense to sell something its customers are literally addicted to.

Maybe that's true, but I'd bet that this isn't the crucial difference -- one's caffeine jones is after all served by cheap coffee as well as the branded brew. Here's where one of Surowiecki's points comes in: Starbucks' success in a period which hammered a lot of other 90's businesses is probably down to the fact that what they sell is both expensive and cheap. It's pricey for coffee, indeed, but even a $4 cup of joe is a manageable indulgence for many, and one which comes with a big psychological payoff.

After scaling down all the other luxuries -- passing up on the planned beach house, trading in the Lexus for a used Toyota, and exchanging the membership at Equinox for a yoga video and some handweights -- the downsized dotcommer likes his grande Americano all the more because it connects him to the former life of expanding economic horizons. It's the token luxe that will be the last to be cut out of a budget-conscious life, because it serves a nostalgia much more powerful than the one which Restoration Hardware serves: the misty-eyed memory of that Gilded Age of about four years ago.