The New Consumer, Same Old Helicopter Ben

The Great Recession (And Probable Depression) is permanently changing the shopping habits of tens of millions of American consumers.  Pat Conroy of marketing research company Deloitte explains:

This new consumer no longer laughs at Depression-era grannies who reuse wrapping paper and gift boxes, and stash Sweet 'n Low and condiment packets in the cupboard. They are too busy re-washing their plastic baggies to use in the lunches they bring to work.

They also take pleasure in beating retailers at their own game. The vast majority of Americans—some 92 percent of those in the survey—have made some kind of change in the way they stock their pantries.

Under the old way of shopping, consumers bought products indiscriminately and often didn't know what items they had in their cupboards, forcing them to frequently throw out items because they bought too much, Conroy said. 

The new way of shopping is much more deliberate. Some 84 percent said they have become more precise in what they buy. 

This shows itself in many ways. For example, many consumers traded down to private-label brands and found they were just as good, if not better, than the branded product. Consumers are now much more willing now to try private-label brands. 

"We had some people saying, 'It only costs me a dollar to try it, what do I have to lose?'" Conroy said.

In fact, there were "less than a handful" of categories where consumers feel they would go out of their way to purchase the branded product. 

"People's brand loyalty has really shifted and shrunk," Conroy.

Buying extra stuff is out for good, folks.  The new consumer is making every dollar count and doing it every day.  The problem is as a consumer-driven economy where demand is shrinking, that means massive deflationary pressure on the economy.  The question is what will replace the spending consumers were doing in order to power our economy?

The answer of course from conservatives is "nothing".  They believe supply always creates demand, when nothing could be further from the truth in an economic downturn.

Prices will continue to crash as the economy ramps downward to the new normal.  That means more layoffs and more cutbacks, and less spending,and less demand for items, and prices will continue to crash...

Something's got to give, which will be one of two things:  A) a depressionary lock-up of our entire economy, or B) Helicopter Ben's Magic Printing Press is turned on.  The stock markets all dropped yesterday as Helicopter Ben made his report to Congress yesterday afternoon saying that we face an "unusually uncertain" economic outlook ahead and that the Magic Printing Press was in fact fully ready to go.

That to me is the giveaway option B is not only on the table, but the real question is how soon it will be implemented, before or after the elections.