Will U.S. Consumers Really Embrace A New Frugality? Further Arguments
A few days ago, I noted that authorities in advertising, business strategy and investing now believe our Great Recession will shock U.S. consumers into a lasting frugality. The idea doesn't make much sense to me, but the popular press continues to push the notion, perhaps because it's a reassuring message for a shell-shocked audience.
Peggy Noonan, for instance, seems to long for a down-at-the-heels U.S. consumer sector in her latest WSJ column. In the post-Great Recession world, she predicts:
People will be allowed to grow old again.... There will be fewer facelifts and browlifts, less Botox, less dyed hair among both men and women.Look forward to rusted-out cars, and more smoking and drinking, she promises. You won't have to go to the gym, and even movie stars won't be so good-looking. Towns and cities will let themselves decline, too, into "authenticity chic." Sounds like she can't wait to live in Potterville instead of Bedford Falls.The new home fashion will be spare. This will be the return of an old WASP style: the good, frayed carpet; dogs that look like dogs and not a hairdo in a teacup, as miniature dogs back from the canine boutique do now.
But not trying hard and looking shabby are not the drivers of solid long-term growth. They're also not characteristic of the post-war American shopper. The Economist's Free Exchange blog rejects Noonan's underachiever vision -- summarized as a future in which the U.S. "will soon resemble Germany (only more religious and with slower cars)" -- and celebrates the old-school American consumer:
The obsession with the new and best gadget and the willingness to try out new products gives America a comparative advantage. That's why it attracts the most ambitious entrepreneurs from all over the world and spurs innovation. Selling and marketing stuff also provides lots of jobs.The anonymous blogger hedges, though, warning: "Taking on lots of debt to buy lots of stuff is not desirable or sustainable." OK, as a nation we've taken credit cards too far. But easy consumer credit makes the shopping adventure possible, and has been another factor in the vitality of the U.S. economy over the last 60 years. I expect that American consumers will leave their frugality behind once their incomes pick up again.
As Free Exchange puts it: "Long live American materialism and conspicuous consumption!"
Photo by John Keefe, all rights reserved