God bless the new frugal America

November 30, 9:33 PMSF Politics ExaminerArthur Bruzzone

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Three generations of Americans -- who never faced an economic depression -- are coping well with the worst credit and economic downturn in 70 years.  They’re becoming as frugal as they were extravagant in boom times.  They  surprised forecasters with a Thanksgiving weekend surge. here and across the nation.

Fact is while the economy shows some resemblance to the economic ‘depression’ of the thirties, a psychological depression has yet to appear.

Of the three generations, the millennium generation  (aka Gen Y)  Americans are best suited to adapt because they’ve been bargain hunters from their first visit to a Bay Area mall.

Gen Y-ers began doing comparison shopping on the Internet.  They know a good deal when they see one and will try to save money;  and they use text messaging regularly to alert each other about bargains and quality

So in malls around the Bay Area, teens are text messaging incredible deals, because that’s how they’ve been shopping even before the downturn. 

"Gen Y-ers exhibit a price consciousness and brand consciousness that far exceeds their age. ‘They have grown up feeling entitled and think of themselves as collectively special,’ says Nancy Robinson, vice president and consumer strategist with Iconoculture. ‘That makes them demanding and discerning consumers who live in an environment of ever-expanding choice.” [From Retail Traffic]

Retailers are aware of their behavior and cater to Gen yer's.  For example, Kohl’s Corp., the fourth-largest U.S. department store, opened Bay Area stores at 4 a.m on Black Friday.

SO as the world’s economic leaders are adapting with force to stem the credit freeze and prevent a deep economic downturn, younger Americans are also changing behavior and hunkering down. 

Bargain hunting is becoming a lifestyle choice out of necessity for all.

Add under-30 adults have not been hurt as much as older consumers (the infamous Gen X generation)  by stock-market declines, and were also out shopping in force this Thanksgiving weekend.

All three generations have learned quickly to do more with less.  Example:    Less frequent runs to Starbucks.  And Starbucks has noted it ----by closing 600 coffee kiosks and drive through’s. 

Because young and middle age Americans are adapting to the downturn so quickly, if, and that’s the key, if credit flow returns—with more scrutiny of the borrower – this unprecedented worldwide collapse could rebound faster than many forecast.  Black swans fly both ways.