Let's start with the good news...we have begun to see a shift in the amount of savings that people are beginning to stock away (there has been an almost 10 fold increase in the last year). People are beginning to plant gardens so that they are truly more self-sufficient and even garbage production is down as is evident at landfills nationwide. It seems as if a subset of people are actually achieving a fundamental shift from acquiring stuff to focusing on family, friends and keeping it simple. The 64 dollar question of course is, will it last? Some people say that the narcissistic core that drove our consumer oriented society will soon return when the market rebounds. Others believe the lessons of the recession will have a lasting effect on people's spending, saving and investing. While only time will tell, there are some possible factors to take into consideration.
Unfortunately, many of the self-indulgent fundamentals of our society have remained the same; internet and media outlets continue to stream the "rich and fabulous", kids are not being taught the importance of a dollar and status symbols are outselling necessities. While there is clearly a need to teach kids about money and rethink the media's emphasis on fortune and fame, many people believe that the high-rolling, self-centered, over the top consumerism will not become a thing of the past. Part of what appears to influence an individual's reaction to what has happened is their emotional reaction to the recession. In other words, individuals with significant anxiety are likely to cut back, save more and probably maintain some frugality after the rebound. Because anxiety is a preparatory response for flight or fight, it causes people to look beyond the current situation and anticipate the future. Hopefully, they become reacquainted with their values and start to line up goals that are compatible. One could predict that another group of people who are feeling great loss (narcissistic injury) associated with the sadness they have about needing to cut back, will probably continue to spend to meet their ideals and will likely return to an even higher level of consumption once their income rebounds. While anxiety can be a mobilizing feeling, depression and loss often leave one paralyzed to change.
Looking at past behavior may help us understand future behaviors. An examination of people's reaction to the Depression or after WWII suggests that young people can quickly function as adults and assume work roles as well as the daily chores of family life. The baby boomers have generally embraced the values of frugality and conservation that were emphasized following such historic events. We can assume that the current generation, Generation X, will probably live at a lower standard of living and be more distrustful of capitalism, government and lack of regulation.
And so we can assume the effect of this downturn will be related to, among other things, where people are at in their life, physically and mentally. At its best, if we can reduce certain self-centered attitudes we may be able to reduce the fiscal instability that overspending brings, and thus prevent another economic downturn. President Obama has emphasized the need for community action and volunteerism in an effort to strengthen our relationships and willingness to help one another. In doing so, people will begin to see more commonalities amongst themselves, thus increasing empathy and helping behaviors. While these hard times are difficult for all of us they actually represent opportunities for us to learn. Reverting back the simpler times in our nation's history may enhance our lives, provide a better future for our children and allow us to reconnect with one another. No matter what the future may bring, for now get real and stay anxious.