Saturday, March 22, 2008
THE "MOTHER OF ALL COURSE CORRECTIONS?"
The world economy may well be headed for the “Mother of all course corrections.” Economists use the term “course correction” to talk about things like the overall direction of the economy, changes in economic policy, changes in the specific plans of a major corporation, or a group of businesses forming a segment of the economy. Think of a corporation deciding to focus its marketing on the aging ‘baby boomers’ as a course correction. A nation trying to create a more favorable balance of trade by reducing or increasing tariffs would be a policy course correction. These are conscious decisions aimed at affecting some part of the economy or market.
The term, “course correction” is rarely used regarding consumers. You will hear reports of consumer spending, consumer confidence or consumer preferences, but not “consumer course correction.” The implication is that while consumers might respond to economic conditions by either spending or saving more, consumers are not thought of in terms have having any kind of unified consciousness like a corporation. Their decisions are seen as a reaction to something, rather than a planned and coordinated response to direct a change in the economy. According to standard economics, if credit is tight, the consumer spends less and if credit is loose, the consumer racks up their credit card balances. The consumer is seen as sheep who are led by their collective noses by mass advertising and they will buy just about anything if the marketing is done right.
Historically, this has been true. Consumers have jumped at the latest fads, fashions and gadgets in a system designed for perpetual consumption. Credit has flowed freely and the consumer has almost enjoyed its courtship with corporations. Awards for best commercials attest to this marriage and ads for new products and ‘sales’ are read religiously. The shopping frenzy around holidays is an embarrassment. The consumer is the follower that has been led by the nose by big corporations.
We are all familiar with the status of the current economy. The sub-prime mortgage crisis is playing havoc with businesses and consumers. Oil prices have and will continue to climb robbing precious dollars from the already precarious economy. Food prices are rising and banks and lending institutions are scrambling for survival. The Dow, which is really based on only 30 companies, is trying desperately to stabilize. All in all, not a pretty picture as consumer confidence wanes and retail sales decline. Keep one thing in mind, all of this economic uproar is because you, the consumer, are not buying as much as ‘they’ want you to. Our economy is based upon buy, break and throw away and buy again. It is here that a “consumer course correction” may occur.
Could this be the end of the Age of Consumption? Is it possible that the light at the end of this economic tunnel is that the consumer will finally ‘decide’ what it wants rather
than being ‘told’ what it wants? As prices for the basic, food, clothing and shelter continue to skyrocket, reckless consumption will have to come to an end. This is a positive event. The planet is hurting. We are raping it of its resources, destroying the natural balance and web of life and altering its climate. In the wake of growing natural disasters, the time of reckless use of resources to feed an insatiable business appetite must come to an end. Remember, the bottom line of business is to get you to consume for the sake of consumption. It has nothing to do with socially conscious or ‘green’ buying. However, the consumer will soon find itself in a position to dictate what it wants for products. Consumers will have to make choices between disposable garbage and products of true and lasting value. The consumer can demand quality and chemical free food. The consumer can demand high mpg, non-polluting vehicles. The consumer can demand the elimination of poisonous plastic food containers. The consumer can demand products that last and that are made according to high safety standards. The consumer can demand a rapid change to alternative, clean and renewable energy resources.
How does the consumer cause a course correction? It merely spends it money on those items that meet socially responsible goals. The consumer can only buy those products packaged in glass. They can buy the higher, albeit foreign, mileage cars. They can stop wasting money on poor quality fast foods. It can stop taking their children to worthy events and activities and save gas. After a while, pressure will build for change.
They can stop attending social functions and meeting and hearings. By using their spending and their time in a socially conscious way, the consumer can take control of the economy.
All of this may sound like wishful thinking. But as the dollar is reduced in value and as travel becomes too costly, decisions will have to be made. The economy will never again be ‘business as usual.’ The consumer cannot afford it and the planet cannot afford it. Does this mean suffering and sacrifice? No, it means that the consumer will soon be in a position to do what politicians and businesses have been unwilling to do, to create a sane and rational world where humanity and nature live in harmony and balance.