A coming period of pragmatism?
While it may not be rocket science to assume that a more pragmatic outlook may be settling upon the U.S. given the teetering state of the economy, there are a couple of other factors which are coming into play at the same time. This convergence of trends may have a more substantial impact than currently anticipated.
1. Clearly we are heading into rough waters from an economic standpoint. However, this recession appears to be different from the last. Back in 2001 – 2002, the middle class cut back but luxury spending actually increased. This time around, however, luxury spending has taken a big hit. This would appear to be counter-intuitive as the slowdown is blamed on the sub-prime mortgage crisis, a crisis that doesn’t directly affect the affluent.
2. As I’ve written previously, there is a generational shift underway. The Boomers are moving out to be replaced in short order by the next large group: Generation Y. However, there will be a brief moment in the sun for Generation X (hurrah!) as the older generation exit and the younger generation take the stage. For a little while, at least, the spending power of Generation X will give them more influence over the economy than Generation Y. And while the myth of “slacker” still persists, it’s now widely accepted that Generation X are, in general, more grounded, and more centered than the others. In fact the defining characteristic of Gen X seems to be their desire for balance.
3. Underlying all of these is a planetary crisis that is very literally forcing us to reconsider our consumption. Global warming has dramatically raised awareness of the effects of our lifestyles. As John pointed out in a recent article for Campaign (and in his excellent book which I am reading right now) “Green is in.” Whether this heightened consciousness is here to stay no one knows but we are unlikely to know less about what we are doing to the planet tomorrow than we do today. Therefore, it’s a safe bet that we will continue to “discover” that our planet cannot support the pace of consumption that we’ve grown accustomed to.
These three ‘trends’: economic, cultural and ecological are converging at the very same moment in time; creating (perhaps for the very first time) a counterweight powerful enough to balance America’s insatiable appetite. An era of pragmatism and restraint that this country hasn’t seen for quite a while.
Projecting out further in the years to follow, Boomers may actually contribute to this trend. As they age, they will inevitably downsize their homes and their lives. Meanwhile, Generation Y will hit their prime earning years in an economy that is growing far less quickly and their ability to spend and therefore impact the economy will be muted.
Rather than being a pessimistic forecast, I see this as cause for hope. Events are converging to force us to take steps that are entirely necessary and overdue.