Recession Resolutions

The country didn't abandon political humor or become faithful church-goers after 9/11; we didn't maintain the sense of civic duty that brought 61% of voters to the polls for the 2008 presidential election (fewer than 30% voted in the NYC mayoral election); 20% of U.S. Americans still smoke despite the medical certainty that they're inviting cancer; and your uncle/aunt/ grandfather/ grandmother never did lose the weight after that heart attack.

We are what one could call a ... resilient people. Others would say stubborn. So what makes us think that the recession is going to create a long-term change in the way that we spend money?













In a New York Times article this weekend, economics professor Carmen Reinhard was quoted saying that even during the postwar years, which were defined by rationing and shortages, the savings don't last; "you get an increase in savings or a decline in debt for one or two years, and then it reverts back.”

So while pattern suggests that our cultural obsession with spending won't change drastically, there is an element of cold, hard truth that can change patterns whether the culture changes or not: for years after this recession, many people, even if willing, will be unable to borrow, due to a collapse in personal credit.