If consumer confidence disappears, does that signal that a 4T is underway? By this I mean that people as a whole change their behavior, stop buying new stuff, and get into frugality as a virtue. I keep reading that consumer spending has been keeping the economy going, but I have to wonder how long that can last.
From today's Seattle Times, 07/21/02.What if We Stop Buying--"The really big risk is that consumers will reawaken to the timeless truth that the best way to save money is to stop spending," said Richard Hastings, chief economist at Cyber Business Credit, a retail advisory firm in New York. "And I think that will impact aggregate demand in a way that has not been seen since the 1930's."
I'm starting to think that 911, as horrible as it was, was not really a catalyst for the next 4T. I'm entertaining the idea of it as having been sort of a parallel event to the economic downturn that had already begun before 911. Perhaps such as a bad flood or a hurricane or a trainwreck might have captured people's attention in the fall of 1929, a distraction from what was actually happening. Of course, 911 was done by human beings for reasons relating to economics, politics, and history, but I've never actually been convinced for this past year that it should have had so much impact on the national economy. It had nothing to do with AOL/Time Warner, Enron, Worldcom, etc. All those problems, including the dot.com craziness needed no help from any outsiders such as Osama Bin Laden.
I'm much more apprehensive about the downward lurching economy than I am about the possibility of bearded madmen who might be lurking on the streets of Seattle, awaiting their orders from OBL. That doesn't change my behavior or my attitudes regarding daily life. The economy, though...I'm awfully glad that I already purchased a copy of the collected Tightwad's Gazette and am grateful that I've already been through a recession or two and know how to cut costs.
Anyway....despite all the hoorah of Homeland Security, neighborhood spies, airport gropings and waitings, color-coded security alerts, all that good stuff which has so captured our attention, is it possible that we've been distracted by 911 and that the real 4T catalyst will be when enough people look into their wallets and emulate Edvard Munch's The Scream?