Is frugality fading?

Throughout the recession, bold sweeping statements were made about the deep and lasting change in the consumer mentality. Countless reporters declared that this recession was going to leave a mark akin to that of the Great Depression: frugality is here to stay.

The sky-high unemployment rates, the unprecedented call for long-term unemployment benefits, the staggering number of people struggling to make it from one day to the next, all these indicators point to the wisdom of continued frugality.

Officials talk about a “jobless recovery” which can only mean that the depredations of this recession – homelessness due to foreclosure (NY Times), students carrying tens of thousands in debt with few job prospects (LA Times), people joining the Army as a last resort for family medical care (Milwaukee-Wisconsin Journal Sentinel) – continue to take a huge bite out of whatever remaining resources, and hope, people may have.  Rainy day accounts, emergency funds, family and friends are tapped out, public and private sources of assistance are equally drained as charitable donations disappear.

And with the constant political fights over every single solution, none of which seem terribly effective [not to get political here], these circumstances aren’t getting better in a hurry.

If you read the sometimes harsh, certainly intense comments over at Bargaineering about the proposed extension of unemployment benefits, you can see that there’s a dichotomy between those who are currently unemployed, and those who are not.  Many of those unemployed have been so for months, some for over a year, and I have to wonder how deeply this will affect our career paths.

Yet, for some of those who still bring home a paycheck, the deprivation of frugality palls and as this article in the Washington Post notes, “deep and lasting change might prove challenging in a country where the phrase “shop ‘til you drop” gets 1.7 million Google hits.”

I admit that I was fatigued by all the dire recession talk by mid-May, despite my own preparation for unemployment.   Who wouldn’t become sick of such constant negativity?  But my baseline has always been set on savings and frugality.  For many Americans, that’s still a concept with negative connotations: “I’m saving/spending less because the company’s going through layoffs,” “I’m cutting back because we have less money.”   There aren’t a lot of positives associated with the notion of New Economy frugality, just a lot of coping techniques.

Because of that, I have to wonder how this will all shake out.  Will we reach a median somewhere between the high-luxe spending of the boom years and the extreme belt-tightening of this past year?  Or are we looking at the beginnings of a fissure in American society where a greater gap opens between the haves and have-nots?  Or will we return to business as usual as the cycle turns again?

[You can find my everyday writing over at A Gai Shan Life.]

About Revanche

Revanche writes the personal finance blog A Gai Shan Life.