Defenestrating the ‘Old Normal’

The phrase “new normal” is cropping up in discussions of how consumers will behave when the recession ends — the assumption being that the “old normal” is a goner. Is it? An ABC News poll finds consumers feeling that way when they look “beyond the next year or so.”

Respondents were asked whether significant aspects of economic life will revert to the way they were pre-recession, become better than they were then, or become worse. “Worse” won a plurality of the vote on nearly all the issues about which the poll asked, including the ability “to afford the things you want and need” (42 percent) and to “save or have enough money for a comfortable retirement” (50 percent).

The notable exception was the ability “to afford small luxuries, like dining out”: 45 percent believe this will revert to its pre-recession state, 29 percent think it’ll be worse and 22 percent think it’ll be better. As for “expensive things you’d like but really don’t have to have,” though, 50 percent think their ability to afford these will be worse, vs. 16 percent saying it’ll be better and 28 percent saying it’ll be as it was pre-recession.

This outlook is reflected in predictions of unwillingness to spend or to take on debt. Fifty-two percent said they’ll be “much less willing” (plus another 14 percent “somewhat less willing”) to take on credit-card debt; 33 percent said they’ll be much less and 23 percent somewhat less willing to take out loans or get a mortgage; 24 percent will be much less and 30 percent somewhat less willing to “spend money.”

Investing in stocks has come to be seen as one more fly-by-night behavior, as if on a par with piling up credit-card debt: 33 percent said they’ll be much less and 19 percent somewhat less willing to “invest in the stock market.” By contrast, 67 percent of respondents said they’ll be more willing to “save money” post-recession than they were before the current bad times arrived.