Changing Business – Consumerism and the Changing Economy – Where We Are

How quickly times can change. It was like a consumer party until the middle of 2008. That all changed in the fall. By the beginning of 2010, the US was still climbing out of the shipwreck with no rescue in sight. A result of the crash was a collapse in home building. While home building is a good economic indicator, there were many other dynamics at play with this period of American economic history. There was a financial panic, reversal of wealth and an extreme credit contraction.

There was a state of risk aversion and credit contraction that caused the deterioration of non residential construction. The savings ratio was out of step with the over the top consumption of the past decades.

Attempts were made by the government to insert itself into the solution. Unfortunately, initial attempts showed short term gains only. We had the cash for clunkers program and the home buyers tax credit. Both showed promise right away but indications were that the benefits were short term and could not be repeated any time soon. Further attempts looked promising but were stealing demand from the future.

History does repeat itself so we can rest assured we will climb back out of this abyss. It is fairly easy to make comparisons to periods of history where we saw significant drops in consumer confidence and expendable income. After all, the great period of innovation that resulted in the industrial revolution was followed by the roaring twenties and later the great depression.

If you would like to learn more about Paul’s books and publications, please visit his publications site at http://dg-one.com or his planning business site at http://devetterplanninggroup.com.