Wednesday, April 1, 2009
Hints about the New Economy
Not liking mystery except in book or DVD form I have been trying to figure out what the new economy my might look like when we finally emerge on the other side.
The world leaders of the G20 are trying to determine that too. And it should be interesting to see what they come up with. I think ultimately there will be a lot more regulation on global commerce and definitely banking. I doubt seriously if any one company will ever be allowed to get "too big to fail."
But I think consumers may have as much to do with what the new economy looks like as the G20. I heard one of those very popular economic talking heads say today that this is the end of hyperconsumption.
My sisters said the same thing in a bit of a different way recently, "my days of spending wildly are gone." I know a single civil servant high up in the establishment that once told me, "I have not only bought everything I don't need but have gone on to buying what I don't even want."
I frankly am on a different level of consumer but have begun every shopping trip with a carefully made list; each item tested with the questions; 1) do I really need that, and 2) can I wait to buy it later. I allow myself one "extravagance" at the grocery store. Today it was a loaf of bakery sourdough bread. Once I used to bake my own. I seriously think I am headed back in that direction. My father, a child of the depression era, always said it is better to own one good pair of shoes than a dozen cheap ones. He applied that to a lot of things. My dad could shop. But he spent far more time shopping than buying. I dare say in the old economy we spent more time buying than shopping.
So if I had to guess what the new economy was going to look like I would think more shoppers and less buyers. More people spending more time looking for high quality goods that will last them and less bling that will be out of style tomorrow. The classic good suit will be back in style. And for women it better be flexible - dress down or up depending on accessories we already own.
More thrift store shopping and recycling of goods. More bragging about the good bargain we got on Craig's list rather than how much we spent at REI. Canning and freezing and making our own meals will be back in vogue.
And I think we will begin to view people in limo's and private jets with a far more critical eye. No shameless adoration of those with money. The money we do spend on extravagances will be well considered. I think that is why the art market will stay relatively strong while clothing and jewelry and home decor markets will definitely suffer. It may well be the end of the big box store selling us just linens and towels. And between Lowe's and Home Depot only one will remain. And Bill Gates better reconsider his game plan to make us all buy a new computer with Vista and all the new software that takes to get along.
It is not merely the auto industry that must come up with a new game plan. Every company that has enjoyed a hayday of wild an reckless consumerism in the last decade needs to readjust to a new leaner market with very careful customers.