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greenoak
09-29-2009, 09:28 AM
hi....im hearing a lot about this economic NEW NORMAL...like how the economy will be different after this big situation is over....how the buyers wil spend differently.....
what do you think? ann
magpie cottage (http://www.magpiecottage.blogspot.com)

Patrysha
09-29-2009, 09:38 AM
If there are any lingering habits, I think they will blow off in a few years at the very most...maybe not even that long. Oh everyone will start out with the best of intentions, but not many will make a lasting change. Some will, of course...but I think most will loosen up as time goes on and memories dim.

It happens every recession...

Spider
09-29-2009, 10:41 AM
A few times throughout my life, I have heard claims that a new era is upon us. That this catastrophe, or that, will change the way we do business. I have never believed it until now. I believe that we are, now, on the edge of a new era in the way business is done and in the way societies are organized.

The 20th.century didn't change much in attitude from start to finish, although there were some great physical changes. I think the 21st.century will see a great change in attitude. We are beginning to think differently.

However, it is not as a result of the present, or recent, economic turmoil. The recovery from that is mixed up with some other fundamental changes that are taking place, that we, as a society, have not experienced before.

1. Global climate change and the measures that must be taken
2. Global instant communication via the internet
3. Global interactive social media
4. Water shortages
5. Food shortages
6. Overpopulation

10% of the 21st.Century is already gone. We are already changing our attitude in many ways.

Paper Shredder Clay
09-29-2009, 12:50 PM
I think things will swing back closer to what they were but will still be off some.


hi....im hearing a lot about this economic NEW NORMAL...like how the economy will be different after this big situation is over....how the buyers wil spend differently.....
what do you think? ann
magpie cottage (http://www.magpiecottage.blogspot.com)

Harold Mansfield
09-29-2009, 06:28 PM
People forget the hard times when they start making money again...it's like the old Seinfeld joke...when you first sit down at a restaurant you are starving and order everything, but after you eat and the bill comes, you can't ever imagine having been that hungry or how you spent so much money.

Steve B
09-30-2009, 05:27 AM
I imagine it will pretty much go back to the way it was (irresponsible spending in many cases).

It's kind of like when gas prices shoot up and we make some initial attempts at car-pooling and reducing trips. But, then gas goes down a bit (but still relatively high compared to a few years ago - and all of those thrifty practices go out the window).

KristineS
09-30-2009, 09:41 AM
I think some people will learn and make changes and some won't, just as it's always been. Some people remain oblivious to the signs of danger no matter how big they are. I hope we can learn from our mistakes, but I'm not optimistic that will happen.

Business Attorney
09-30-2009, 11:42 AM
I think we'll see some people permanently making changes, just as many Depression era people retained the thrifty habits forced on them by necessity during those lean years. But just as the economic rebound after World War II led the children of the Depression to suburban living, cars, boats and vacations, I think that prosperity will bring back most of the basic lifestyle purchases that people made when times were good.

One change that we need to make is that people must improve their savings habits. I don't know if those of you in Canada, Australia and elsewhere have our problem, but the personal savings rate in the U.S. has been dropping steadily for two decades, to a point where it is has been almost negligible for the past several years (and even negative in some quarters), even before the recent economic crisis. It's one thing to have enough confidence in the future to spend your excess income to enjoy yourself today; it is quite another thing to set aside nothing for the future. Saving a reasonable portion of today's income is critical, both to the individual and to the entire economy.

Let's hope that if there is one lesson taken away from today's economic turmoil, it is that creating a nest egg is essential.

billbenson
09-30-2009, 01:54 PM
One assumption is you are expecting salaries and the way business is done to return to the way it was. The current economic situation has forced companies to change the way they do business. Overstaffing of the past, won't return. Many benefits won't return. Outsourcing will stay to a large degree. Companies have learned how to do things in a more economical way. That won't change.

Jobs or new jobs may return. They will start out at lower pay schedules for the most part. That means that when you get your anual 5% raise, its based on a lower dollar amount. This will all have to hit consumer spending. I don't see as big of an impact in b2b, but they aren't going to add back the bloat that they figured out how to live without.

Business Attorney
09-30-2009, 07:46 PM
In addition to reduced salaries, the other thing is that there are real investment losses, not just paper losses, that will affect peoples' ability to spend.

Let's say someone put away $40,000 in 1999 for college savings at a time when tuition, room and board at a state university cost $10,000 a year, expecting the savings to grow more or less at the same rate as inflation in education costs. Due to the drop in the stock market to 1999 values, and the growth in costs to more than $20,000 a year, he now only has enough in savings to cover 2 years, not all 4. He must now sell other assets, at depressed prices, to cover the immediate cost of the other 2 years. Even if stock prices rebound over the next 10 years, he has had to liquidate another $40,000 of his core savings, so any growth is going to only on that impaired base. That is $40K that can't be spent on discretionary items because it is GONE.

That is a lot different than a temporary rise in gas prices that causes people to park their gas guzzlers for a while but which is easily forgotten once the prices return to more reasonable levels.

greenoak
10-02-2009, 08:46 PM
i too think it will be a big change in how people look at their spending...i was suprised to see so many high end places hurt in this downturn....but its like mentioned above...people lost a whole lot...even tho they might be still working...
from being in antiques i see how the depression affected people for the rest of their lives..i know we arent in that bad a situation yet....but i think people will be wary...and seek out the sales and frugalista idea ...
im guessing we will recover but people will be harder to sell fluff to or overpriced things......they might want better value and be pickier and more thoughtful...which should help our business....
what scares me is the constant discounting by the biggest best stores.....its everywhere......i wonder how anyone will ever respect full retail prices again....and what that means for me with a store...is that my new normal!!! .... thats what im facing in retail anyway...
ann
magpie cottage (http://www.magpiecottage.blogspot.com)

Patrysha
10-02-2009, 09:21 PM
I think our views might be different because of where we live - we haven't felt it as deeply as many areas in the East and to the South of us. It's only really been since about October of last year that we've started to feel the pinch in our community.

Plus, I believe that a solid business that puts service and quality first can weather nearly every economic storm...sometimes that means tweaking things and making adjustments but the past has a lot lessons. One of those being that we know it's going to end sometime - it's just a matter of positioning yourself well for the rebound.