The talk about the ol' double-dip recession continues. I don't buy it. I think it's justÂ the Unremarkable Recovery.
I don't think that name will stick, but it's probably for the better. It doesn't do much for raising the morale of society.
The simple fact remains that consumers aren't spending. When consumer spending is the engine that powers the U.S. economy, you've got a problem, Houston.
I still don't think people understand the market correction that was needed following one of the grandest economic expansions in U.S. history. I scratched my head for years in the 2000s as people were buying mini-mansions, driving new cars every three years, and looking into purchasing vacation homes. I thought I was an idiot because I couldn't afford those things, but the collapse of the housing market changed all of that. Those people were playing with money to which they never should have had access. It was an economic expansion that never should have been as robust as it was. Now it's time to pay up and likely will be for several months to come.
What happens as this tepid economy creeps along? I think attitudes and habits of U.S. consumers may be changing. That may not bode well for those still holding out hope for a dramatic economic burst that often follows recessions.
Like those McMansions I saw proliferate in the countryside of northern Illinois in the early 2000s, I'm noticing some current trends that make me think the days of the U.S. consumer as spendthrift are over:
- Families are saving more. They see the cost of higher education skyrocketing, which will continue, and adults now understand they are responsible for their own retirement. Not everyone can win the lottery to remedy this financial conundrum.
- Good-paying jobs for low-skilled employees are few and far between when compared to 40 years ago. The Bureau of Labor Statistics reports that 11.7 million people are employed in manufacturing, which is about two million fewer than before the recession began in December 2007. Some of those jobs will never return, eliminating good-paying opportunities for those that once counted on them as stepping stones to financial security.
- People are realizing they don't need as much stuff as they probably once had. I think the late George Carlin had the best point of view on this subject.
- The U.S. government is going to have to address its deficit spending. That means new taxes and elimination of jobs and programs. The rest of the world is learning this lesson, and the U.S. will be forced too as well.
Actually I view these changes as a positive. It's a return to austerity, providing people a moment to concentrate on the most important things, not necessarily the most important possessions. This new norm may be good for the nation's soul.
Of course, I'm likely wrong. After all, the toilet paper index is predicting big things. The author's intimate knowledge of such subjects makes him infinitely more qualified to talk about these matters.