TAMPA-The Great Depression changed the mindset of an entire generation. But despite quickly rising savings rates today it remains to be seen if thrift will be a long-term trend or a passing fad for those enduring the current recession.
"I want to think that people will have learned a lesson. But the one thing I have learned in the 20 years in this business is that the American people have a very short memory," said Bob Fisher, CEO of Grow Financial FCU. "Many people will eventually get back to their own ways. I'm hoping people will change, but five to 10 years from now I would be shocked if it did not go back the other way." It's not likely that Americans will even be able to return to rampant consumerism if they wanted to, he argued, because the system has changed. Loan underwriting standards becoming more conservative, the decline in home equity and a decrease in creditworthy people all add up to a society that will be forced to rein in its spending, at least in the short and medium terms.
Fisher believes that Americans nearing retirement, most of whom had parents that endured the Depression, will be more inclined to follow their predecessors and switch from equities and other higher-risk investments to more conservative products." "This changed forever the people who are in the 55-65 age range, especially when they got stung in the stock market," he maintained, saying the baby boom generation "got killed" by the 50%+ collapse in stocks. "The older people it has effected forever but the younger generations will get through it and they'll forget about this."
