Updated: Aug 14, 2020
Sixty-four thousand Americans have lost their lives. Thirty million Americans have lost their jobs. GDP is projected to decline 40% in the second quarter, the worst economic performance in U.S. history. And yet, there are positive signs.
Social distancing is working, and the curve is flattening. Some states are starting to open and there are hopeful signs that economic activity is picking up. So now, the big question is, “When will our economy recover?”
To answer this, I took a look back in history to the 2008-2009 Great Recession. One thing the Great Recession taught us is that the United States is a consumer-driven economy. When the consumer spends, our market grows. Consumer confidence (and spending) can lead us out of our current economic crisis. The consumer is king.
The Coronavirus crisis is unlike any other in recent history. We are living through a global health crisis that has triggered a global economic crisis. It really is unprecedented. Until our health crisis is resolved, our economic crisis will linger. Maslow’s famous ‘Hierarchy of Needs’ helps make the case for this argument.
According to Maslow, people are motivated by basic physiological, psychological, and self-fulfillment needs, with basic needs at the bottom of the pyramid taking precedence over all others. Until basic needs like food, shelter, health, and safety are met, people are unable and unwilling to move up to higher-order needs like belonging, self-esteem, prestige, and self-actualization. Higher-level needs r