Can the World Live with the Frugal American?
“There is an extraordinary sense of fear out there,” remarked Steve Adler, Editor-in-Chief, BusinessWeek, USA, kicking off the discussion on the fate of the global economy without the American consumer to drive it forward. Adler pointed out that, until the financial crisis, nearly one-quarter of global consumption came from US consumers, who spent nearly three times as much as consumers in China and India combined. Ian E. Davis, Worldwide Managing Director, McKinsey & Company, United Kingdom, observed that savings in the US have dropped to unsustainable levels and that Americans have no choice but to reverse the trend. “Americans have no option except to be more frugal over the next 10 to 20 years,” he said. Ken Rosen, Chairman, Fisher Center for Real Estate and Urban Economics and Professor Emeritus, University of California, Berkeley, USA, captured the mood: “We spent money we didn’t have on goods we didn’t need.” Rosen made it clear that a return to the way things were is unlikely.
