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The No-No Years


Some benefits to the new Age of Austerity.

No salary increases: In fact, take-home dollars will be reduced substantially as wages are frozen, overtime eliminated and benefits cut. Worse, survivor stress (the pressure on those who keep their jobs, for whom workloads will increase exponentially) will be common.

No full-price purchases: Coupons and competitive pricing will return to the forefront for American consumers. And it will truly pay to wait, as deflation will cut the cost of most discretionary purchases.

No "private" solutions: Public transportation and public education will explode as the economy demands "just-enough" solutions. Coupled with changing population demographics, this will have an enormous impact on our nation's private schools and universities, where consolidation will ultimately be required for survival.

Similarly, private day care will be replaced by in-home solutions provided by either a newly unemployed parent or a retired relative. Finally, in health care, the burden on public medical solutions will be intense, and, for the elderly, part-time home health care will replace a significant portion of residential retirement and assisted living care.

I could go on and on. But the cumulative economic impact will be enormous, as now-unaffordable excesses (both financial and societal) are wrung out of system. For those running businesses, the focus won't just be on cutting expenses, but on eviscerating them, as smart managers prepare to buy the revenue of their failed competitors at the bottom.

A pretty grim outlook? Unfortunately, yes. But while the period ahead is indeed notable for what it lacks, I would offer that there are 2 clear benefits - one economic, and one social.

At the bottom, demand and supply will once again return to a more appropriate balance. And with far less capacity, sellers will have sustainable margins to grow their businesses anew.

On the social front, I see a return to what's truly important. If "no stuff" defines what's ahead, then perhaps we'll fill that material void with far more socially constructive uses of our time. And maybe -- just maybe -- we, no longer blinded by our own material excesses, will become aware of the plight of others, as we have failed to be in the recent past.
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