Consumer confidence. It has such a reassuring, solid sound. If
only it would come back, the economy surely would get better.
It was even up a bit in April, the poll takers reported
recently, although not nearly as much as last December when hopes
were so high for the newly elected president, Bill Clinton.
But such avid attention to the monthly fluctuations has
concealed a most troubling trend. Ever since the 1960s, the
optimism of Americans about the economy and their own
circumstances has gradually deteriorated. And today millions of
people view their future with no sense of certainty that things
can get better.
Put starkly, the soaring optimism of the 1950s and 1960s that
life in America could only become more prosperous has gradually
given way to what Richard T. Curtin, director of consumer surveys
at the University of Michigan, calls "diminished expectations."
The 1970s and early 1980s _ a transition period _ brought
fist-banging and frustration as living standards stopped rising
for most Americans. And now, particularly over the past three
years, the struggle to regain the old prosperity has dissolved
"People are satisfied today if they can keep their incomes and
living standards from declining," Curtin said. Other poll takers
have picked up the same shift in attitudes, among them the Daniel
Yankelovich Group, a market-research firm.
"Happiness is being able to cut it with less," said Florence
Skelly, the firm's vice chairman. "Rather than trying to climb
the economic ladder, people are becoming more concerned with
relationships and family and community involvement."
The phenomenon is still too new to trace all its consequences,
says Christopher Jencks, a sociologist at Northwestern
University. But some are becoming evident. Above all, Americans,
having lost the old confidence that next year will bring a higher
wage or a better job, have been unexpectedly reluctant to help
turn the weak national economy into a stronger one.
As interest rates fell last year, for example, many economists
thought that homeowners would refinance mortgages to lower their
monthly payments. They did refinance, but the savings were not
spent on consumer goods. They have gone mostly to pay down debt,
to clear the family balance sheet, in case a wage earner is laid
off or is forced to take a lower-paying job.
Such bad luck, so alien to the 1950s and 1960s, so resisted in
the 1970s, is accepted today as anyone's possible fate _ in an
age of diminished expectations.
"People were more comfortable with debt in more optimistic
times," said William Dudley, a senior economist at Goldman, Sachs
Until well into the 1980s, there had been a safety valve.
Women entering the workforce added a second paycheck for millions
of households, and that helped mask the fact that the median
individual wage had failed since the early 1970s to keep up with
"The number of persons per paycheck shrank, but that is gone
now," said Frank Levy, an economist at the Massachusetts
Institute of Technology. "Part of it is that women's labor force
participation has leveled off, and some of it is that the birth
rate has kicked up as couples who had put off having children
finally took the step."
Adjusting to the change, retailers are endlessly offering
bargain prices, opening more discount stores and pushing what
they call real value. The new ethic is that less is more, Skelly
said: "You don't need 100 shirts, 15 are fine, and you don't need
designer watches and Mercedes-Benzes. …