I’m not an economist but I am an avid gardener and I know that green shoots can be deceiving. Not everything that pokes its little green head above the soil is desirable… or survives the frost. I hope reports that this recession is coming to an end are correct, but even if they are, or when it does, I do not think our economy is going to look anything like what it did oh, say, three years ago.
It’s about slack. The US economy is said to be the engine of the world economy with the US consumer being the driving force. The US consumer will, I think, not ever go back to the kind of free for all spending that was driving the world economy just a few years ago, because there is a long way to go before anywhere near that level of demand will be seen again. The US consumer has a lot of budget tightening that can still be done, or that can be continued, and a lot of it will.
Just take shoes for example. Most adults in this country could go literally years without buying shoes and not be stuck with the choice of having to buy shoes or go barefoot. It’s different for children who grow out of their shoes, of course. (And for little for children, there a lot of good, barely worn, used shoes in the pipeline — just drive around the garage sales some weekend.) I’m confident that if not a single new pair of adult shoes were imported into this country in 2010, we could shrug it off. We might prefer to buy shoes, but for very few of us is there a real need to.
Housing is another area in which a lot of slack still exists to be taken up. This is because economic necessity is forcing families to make due with smaller homes or reduce expenses by sharing homes. Kids moving back with parents is just one trend that has been noted, but other family members are doubling up housing as well.
We could substitute almost any other consumer good and find the same thing. People do for the most part have in abundance what they really need. Most consumer purchases replace something that still works, but that the consumer wants to “upgrade” — this is true of everything from winter coats to washing machines, from blenders to cars.
On top of this is the fact that the biggest transfer of wealth in the history of the world has just begun with the retirement and death of the baby boom generation. However conspicuous their spending habits were, they are coming up against the most brutal of the brute laws of economics — you can’t take it with you. “You are dust and to dust you shall return.” And everything dust leaves behind, from teapots to homes, from dressers to lawn mowers, goes into the hands of someone else who then does not need to buy that item new.
And there aren’t nearly as many of those someone elses as there should have been because going forth and acquiring has taken the place of going forth and multiplying for the baby boomers like no generation previous to them. That means that the goods they leave behind are usually not being spread among a large number of living descendants, especially considering that the voice of the blood of millions of them cries out to God from the ground.
For those of the baby boomers’ children and grandchildren who do survive, however, this recession will be a defining moment. Defining in the way that the great depression was defining for the boomers’ grandparents. It will deeply alter their relationship with money and the “consumer culture” — making them wary, suspicious. Dave Ramsey’s slogan echoes ever more loudly across the fruited plain: “Debt is dumb and cash is king.” Even the depression era’s “use it up and wear it out” philosophy is being recycled.
Running the printing presses day and night to churn out dollar bills is not going to revitalize the economy. At is most basic level every economy is about dealing with the “dust from the ground” of which we are made, with the rocks and soil of this planet. We aren’t like God, able to create ex nihilo; we aren’t angels who can sustain ourselves on “information.” The real stuff that makes an economy hum is fished or grown or mined. It is taking the raw materials of this earth, “by the sweat of your face,” and making it edible, wearable, or otherwise usable to some other human being that forms the basis of any economy. When we see growth there, that is when we will be back.