Tomorrow is my friend Mark’s Birthday. Mark always accuses me of saying “in five years…” (likewise, Mark hates to admit that often, my 5-year predictions are rarely wrong.) So for Mark’s birthday this year, I’m writing my top 5, 5-year predictions.
First, a few observations:
This summer has been one of change. Arguably, each summer is a summer of change – and for that matter, each day, hour, minute, second is about change. However, this summer something is different. The change is not so much about the passage of time, but the transcendence of a lifestyle. The way we live, work, play, travel, and consume (as Americans) is changing.
1. Politics. Few argue that the United States is in a pickle. The political climate is unlike any that I’ve seen in my lifetime, and the overall collective morale of the country is rock bottom. I think nearly everyone (except the most resolute and the most steadfast) agrees that George Bush is a lousy president. Perhaps more important in the short term, he’s simply unlikable. Try as you might, you just can’t like the guy. Strangely, he’s not alone in the running. The potential contenders for the upcoming race are equally unlikable across a broad cross section of personalities. So, maybe that has us down, I can’t say, but I’m sure that Americans have a very short term collective memory and a few years down the road, all will seem reasonably normal again. My prediction is that in the next year or so, Congress will forcefully put an end to the Iraq war, and George Bush will leave office a broken, misunderstood, and forgettable president. The nation will breathe a collective sigh of relief, and will begin to feel better almost instantly about the direction of the country. I do believe, however, that the new president will be someone that is not yet in the current stable of contenders.
2. Economy. Suddenly, the US Dollar is worthless. Somewhere on the other side of my screen is an economist that can spend days explaining why a weak US Dollar is actually good for the US economy. I understand the macroeconomic impact of the balance of trade, and cheaper exports, and all that. But for the first time in my life, every major world currency is pretty damn near parity. The US and Canadian dollars are virtually equal, the Euro is roughly equal to 2 US Dollars, as is the Pound Sterling. The Swiss Franc is roughly equal to the US Dollar as well. Is this the new face of a global economy? Too early to say, but it seems like a peculiar economic constellation if you ask me. Again, some economists say that the economy is in great shape, and others say that its in horrible shape. I suppose it depends on whether you’re at the top of the trickle down pyramid or the bottom. Regardless, I can say that a very real metric — my grocery bill — has nearly doubled in the past 2 years. I’m buying less, eating less, and consuming less. Everyone I talk to seems to be in the same boat, so that must indicate something. As the nation, and it’s residents recede further and further in to debt, the country will experience a mini-financial crisis that will be the catalyst for health care “reform” (or at least a change in the way health care costs are managed, processed, and administered); a broader insurance “reform” that will see increased regulation of insurance firms, and a program similar to FDIC put in place to ensure solvency. Too, quasi-predatory lending (e.g., encouraging college students to take on credit cards AND student loan debt) will become (from an institutional perspective) less and less profitable as US banks consolidate and realign the standards of business practice to offer more innovative financial services (like überencrypted credit cards without numbers, as one example). Keep an eye on Bank of America in this category.
3. Entertainment. TV is in its final throes. Programming is becoming cheaper, faster, and more out of control to compete with (far more compelling) content on YouTube and other venues. This past season is proof enough that TV is done. The major 4 networks are hemorrhaging viewers, and the “hit” duration has dwindled from years to days. Broadcasters are anxious, advertisers are panicked. The whole transition reminds me of the scene in Boogie Nights where the Burt Reynolds character is talking about resisting the transition to video, and instead wanting to continue to make “films”. TV won’t go away, but it will finally become the on-demand, as-you-like-it hybrid of a beast that combines information, entertainment, and interactivity. The transition to DTV will become a major marketing fête as broadcasters wed content providers and device manufacturers to try to corner a yet undefined market. Think DuMont network or iPhone. My guess is that the casualties will be heavy, and the successes few.
4. Shopping. Green is now vogue, and there’s money in those green hills. About a year ago, everyone seemed to know what “green” meant, but it seems that in the last 5 months, the overall public consciousness has been raised. Oddly, though the message isn’t “be green: buy less” but “buy green: (or) pay the price”. Seems a bit counterintuitive, but nonetheless, I wonder if this is the beginning of a new awareness of consumer consumption habits as well as saving the earth. I have noticed that it takes about 5 years or so for logical reason to trickle down from the thinking class to middle America (for example, many of us realized years ago that George Bush was incompetent, but most are only now beginning to understand that), so that means that it will be 2010ish before the cost (and effect) of a true green movement will impact the middle class. Big box retailers like Target, Best Buy, BJs and Wal*Mart should take notice. Major cornerstones of the American economy, like the Gap, are crumbling. These early indicators should be a clear message to retailers that the dam is about to burst, and like media and TV, the way we shop, how much we consumer, and how we buy is about to change in a really big way. The model will look more like 100 years ago than 10 years ago.
5. Mindset. “All or nothing” seems to be the new mantra. Airlines are operating at full service (all) or they’re completely grounded (nothing). Electric service is either operating at full service (all) or it’s out for several days (nothing). Mortgage companies are solvent one day (all) or bankrupt the next (nothing). GM is either the #1 automaker in the world (all) or it’s nearly bankrupt (nothing). Right now, corporations are in the affected position. Soon, consumers will recognize their power and begin to drive change in major industries (like transportation and health care), and will organize “buying strikes” that will effectively put a company out of business quickly unless they redeploy services and products that meet an increasingly demanding and better educated public.
Where does that put us? I don’t know, I can’t say, just some educated guesses as to where we may be. Happy Birthday, Mark.