Our economy shrunk in the past few months. The mighty shoes the U.S. once filled are now just a size too big. We’ll wear thicker socks to compensate and for a while, until the next time we buy shoes, few will notice the change.

I don’t write this stuff to address political issues though sometimes I do get pulled into the downdraft. Politics aside, let’s just imagine I’m right. Play along.

In our new, thick sock economy, most manufacturing jobs are gone. The option of skipping college and making $30/hour at ‘the plant’ is gone. The plant is gone. It went to China and the bastard that engineered the move took his bonus and retired. He’s now writing books about how he turned around various companies by outsourcing, downsizing and generally screwing his workforce.

But all those manufacturing ‘heads’ that were part of his reduced headcount, are no longer able to buy the toys that kept most of your businesses going. They can’t afford a home. They can’t afford a new car. They can’t buy boats and motorcycles. They can’t afford 72″ plasma TVs. Those past and not future manufacturing workers are going to be a lot tighter with their money. We’ve all learned something. The party is coming to an end and we’re now in that uncomfortable time when the check gets passed around.

And the retired? Well, the millions of Boomers headed for retirement have just been raped by Wall Street. While their 401k plans dropped by half, the government threw a couple trillion dollars at the thieves.

Corporations are working on ways to get out of their health insurance obligations. That damned “Turn Around Kid” (please don’t read his book) used that ploy a few times—the retirees are killing us! Perhaps, had these same corporations left the retirement money in the retirement accounts instead of using the money as ‘wasteable’ capital, it would be there today.

Our venerable government does the same with Social Security funds. Bush liked to tell us how rich we’d be at retirement if we ‘privatized’ Social Security. Even a simple 6% return and most workers would retire as millionaires. The government could get the same 6% return if it left your money in the Social Security account until you retired. But we’re a greedy society. Everybody wants more and the government is going to give it to us. Until it can no longer borrow.

Back to the point: The new, downsized economy. Better get used to being Avis, “We’re number 2 and we try harder”.

Watch for these signs that things are going downhill permanently.

World governments want to get off the dollar as the standard currency. Oil producing countries prefer to be paid in currency other than the U.S. dollar (did you know all oil is traded in dollars now?) China makes noise about holding too much U.S. debt. More countries are willing to threaten us militarily. Watch for China to challenge us. Russia too.

Most of all, watch for kooks. As our educational standards have dropped, people are dumber and they’ll believe anything. Mostly they’ll cling to insane ideologies. Watch for this. UFO nuts are just the tip of the ice berg. Watch anti-gay sentiment rise. Watch for “Obama is really a Muslim” type stuff—did you know his birth certificate is a forgery and that he is not a U.S. citizen? If you believe that, I never want to meet you, don’t call me. Ever. And yes, global warming is an Al Gore plot. That one is a giveaway. Anyone who won’t discuss the science but is rabidly on either side of that issue—kook.

Your business needs to prepare for this shift. Your customer base is soon to be very stupid people with very little money.

How to respond? Simple. Yes, simple. Simple is going to outsell complicated. The easier something is to understand and use, the better it will do in the market place. If your new product has 20 great new features, reduce it to 5 new features and lower the price.

When buying resumes, people will seek out simple, easy, understandable, durable and cheap products. Plan the next generation of your product line to be simple, durable and cheap. They won’t be pulling out the VISA and saying, hell, it’s only $100 more. Instead they’ll say, “we don’t need it.”

Better seriously consider this.

Chris Reich, Author of TeachU’s Business Talk Blog
[email protected]