"Suddenly, our consumer society is doing a lot less consuming. The numbers are pretty incredible."

The article starts out by describing this as a crisis of confidence, but it goes on to describe the realistic underpinnings of that crisis -- people are worried about their jobs, they don't have as much money to spend as they used to, and they need to pay down debt and rebuild their retirement accounts.

A return to thrift may be painful in the short run, but we need to move past the borrow-and-spend economy.

Comments

[Joel Gillespie]

Yes, we do. A economy built upon borrow and spend cannot last - I am talking about consumers, folks like you and me and our neighbors. I anticipate tough times ahead but necessary times. We have to find a way back to basic thrift and stewardship - living within our means, saving money, going without having "stuff," and the like. Long term it is best. short term it will be very very hard I fear. I hope our own community can rise to the occasion and be there for one another.

I hope you're doing well.

Joel

[cm]

"...our consumer society is doing a lot less consuming."

Silver lining. But sad that a cloud was required to reverse our course.

Common sense: If you don't have it, don't spend it. Give a little. Save a little. Be content.

[Tony Wilkins]

jg and cm...you guys mean kinda like...uh...being...uh...conservative?

[Ed Cone]

An elemental sort of conservatism is exactly what I'm advocating in that column - prudence, stewardship of resources, and adherence to a foundational American value.

How to reconcile it with consumerism and the policies of the borrow-and-spend "conservatives" now preparing to leave the White House is quite a challenge.

[RBM]

from Reuters:

"The agency's World Energy Outlook for 2008 stopped short of sounding the alarm that oil supplies may have peaked, but highlighted obstacles to accessing new fields that include the increasing dominance of national oil companies.

The gap between what was being built in terms of new capacity and what would be needed to keep pace with demand was set to widen sharply after 2010, the IEA said."

I'd consider 2010 short term.

[scharrison]

I don't know about that, Tony. I've engaged in some pretty heavy debates with conservatives over the last few years or so about the dangers of debt (personal and national), and their most common stance has been: "the debt itself is no problem, it's how you deal with it that can hurt you."

In other words, as long as your borrowing increases your net worth, or as long as the government borrowing increases the gdp, any steps you take to reduce the debt will actually hurt you. Keeping revenues the same or even lowering them stimulates growth, giving you a net increase in revenues, which you can then use to lower debt (if you must). But using it to lower debt is a waste of resources, which would be better used by giving even more tax breaks to the wealthy, yada yada.

Now, you might say, "That's not true conservatism", and you'd be right. But it is what conservatism has allowed itself to become, at least with the more influential of the Republican Party.

[Anonymous]

Um, I consider myself and my family conservatives and we have been HORRIFIED by the economy of the last fifteen years (under both W and Clinton). We have falsely built up our economy on personal debt, created a bubble housing market that included more debt for consumers as they upsized homes as well as the use of imported cheap labor (ie illegal alients) and at the same time mostly grown jobs in the service economy. America is no longer making practially anything-no innovative technologies or products-we just built a bubble based on the average joe spending more than they made to livestyle they really couldn't afford.

[winstongator]

The idea that America has produced no innovative technologies over the past 15 years is false. >90% of computers use intel or amd processors, huge percentages of internet traffic use cisco routers, cdma was brought to market by qualcomm, and most computers use either windows or apple operating systems.

The increased leverage & debt on the federal budget, household, and corporate level was irresponsible and damaging, as was expecting a lion's share of our nation's corporate profits to come from financial firms.

It's more than just a crisis of confidence, and I think one reason we are in the problems we are in today is that people did not worry enough. People didn't worry about what if my home price falls, or if I actually have to start paying off my credit cards, or if I can't refinance my mortgage, or if I lose my job. Too many households weren't just operating without a savings cushion, but with a negative debt bed of nails. The deleveraging of household spending is painful, but i think we'll all be better off.