Not only are consumers not spending, their actual attitudes toward spending have changed.
Even for the six people on the block who are flush with cash, frugality is the new chic. My neighbors, high-end Saab and Volkswagen types, just bought a Kia Sportage for their daughter (nice car, by the way).
This change in spending habits will not be a passing fad. Just ask Grandma or a neighbor who remembers the Great Depression how their parents changed after living though years of a terrible economy. Changes in spending became permanent and reshaped the economy until the boom following World War II.
Frugal will be the norm in 2010 and beyond.
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Reader Comments (Page 1 of 1)
10-24-2009 @ 5:09PM
MoeJoe said...
Buying Korean cars definitly wont help.
10-25-2009 @ 5:22AM
al coholic said...
When I was a kid (I'm in my sixties now) I was amazed at the extreme frugality exhibited by my mother's older sisters and my grandparents. Absolutely nothing was wasted, they distrusted banks, the government, and they anguished over every decision to spend a nickel. That was the mentality that emerged from the Great Depression.
I have lived through many recessions but until this one I never drastically changed my spending habits. Now I find myself watching every single penny and forcing draconian cuts to my budget. Most of the people I know are doing the same thing. We will not make a 180 degree turn and return to heavy consumer spending for a long time. It may take a whole generation to change our mindset.
There will be no "V" recovery this time.
10-26-2009 @ 6:25AM
al coholic said...
Unless you eat at MacDonalds you probably have noticed that eating out is less popular now than in past years.
Consumer purchases have fallen like an anvil so if it's business as usual for you you congratulations, but most of us aren't buying anything we don't absolutely have to have.
If you haven't lost any money on your investments you are truly in the minority. Virtually everyone has been affected by this economic upheaval from what I can see.