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History Repeats: Are We Due For Our Roaring Twenties?

In an article by Jeremy Gutsche there was a mention of the roaring twenties returning. To put this in a little context, Jeremy argues that after a period of deprivation (thanks to the pandemic) there will be a period of exuberance. He mentions that “the Renaissance Period emerged from the Bubonic Plague. The Roaring 20s emerged from the Spanish Flu. And now, as we emerge from a new crisis, The Roaring 20s are coming back. This is a cyclical pattern of history.” So according to Jeremy, consumers would be bursting at the seams to blow through their money. Parties, travel, luxury purchases, you name it and they would’ve bought it. But is that really what’s happening?


Let’s examine the argument of a cyclical pattern of history and put it into context. The original roaring twenties were a period of post-war economic prosperity. In the wake of World War I and the Spanish flu, there was the urge to get back to “normalcy” as well as shake of the years of uncertainty, sorrow, loss and desperation. People were hungry for the better things in life. This period saw the large-scale development and use of several technologies, such as cars, phones, films, radio, and other household electrical appliances, reaching millions in the Western world. These advances were largely driven by research and developments during the war. Following from this, aviation soon became a business as well, making the world that slight bit smaller and allowing for more travel. Nations saw rapid industrial and economic growth, accelerated consumer demand, and significant new trends in lifestyle and culture. As a result of the revolt against the Prohibition laws in the States the parties became grander (and more boozy). The music became wilder (Jazz). The fashion became more daring (the Flappers). And the money rolled. The media moved its focus to glamorous celebrities and movie stars or sports heroes, using the new industry of mass-market advertising driving consumer demand, and fill the new palatial cinemas and gigantic sports stadiums. Everything was en masse, and a large part of it was conspicuous.

The roaring twenties were a great example of what happens to the human psyche once you tell it “no” for too long. During the war there was no time, money or safe space to splurge (predominantly Europe). The Prohibition laws (US) ruined even the best party – and made them go underground, where they became bolder, more daring and broke more than just Prohibition laws. Humans are adaptable, but only for so long. After a while, they’ll want to regress to the mean. Regression to the mean here just means that for several years of living below the “normal” standard, they now had several years (or for however long financial means allowed) of living above the standard to compensate. Everyone was due a party and the sky was the limit! Of course, the sky is never really the limit and that massive economic growth turned out to be largely built on illusions and delusions of grandeur (when isn’t it?!). The roaring twenties were closed down by the crash in 1929. Bit of a downer.

Knowing this context, how do we feel about the current not-so-roaring twenties? Technically speaking they are also a period following a depression. There was a health crisis which did have far-reaching social, political and economic consequences. Months on end of staying indoors. No large social events. No events of any kind really. No travel. A life lived predominantly from home and online. Panic working if you could still work. A resulting mental health endemic for both the employed and unemployed. Yes, it was a depression. But are we now seeing a similar upward trajectory as that of the 1920s? As I’m looking at the numbers, I’m not too sure that we are. Rather than seeing massive economic growth, what we’re seeing is an increase in the cost of living, caused by a variety of factors such as resource shortages and the ongoing war in Ukraine. In addition to all of this, consumers are increasingly turning an eye towards the climate, increasingly taking the planet into account when making purchasing and financial decisions. One key aspect of conspicuous consumption will always be transport (think: flashy cars). However, the pandemic has done a number of this sector, with a strong preference for buying used cars, environmentally friendly cars and an increase of public transport use. Of course, the demand for transport has decreased in general as working from home is becoming the new norm. The new norm of working from home is also crunching the travel sector. Zoom or MS Teams can take you anywhere you need to be, and that change is reflected in the numbers. A report from Deloitte shows that “only 13% of respondents are likely to travel for business the next period. 29% of the business travel is for work with a client, followed by 20% to build client relationships. A further 23% say technology has replaced their need to travel for work.” Deloitte emphasizes that “the structural changes in business travel are changing the interplay between leisure and business travel and, therefore, are likely to significantly impact the entire travel hospitality and leisure ecosystem.” Well, the roaring 20s weren’t exactly about business travel, they were about glamorous leisure. You know, the stuff you put on “the gram” nowadays. I suppose back then you simply bragged about it to your friends during social events. What a time… Anywho, looking at consumer intentions to spend on travel, consumers are now more willing to spend on travel in the next period as compared to before the pandemic. However, it needs to be mentioned that these are measures of intentions, not numbers of actual travel. Similarly, the intention to spend more on dining out and takeout food is on the same level of willingness as before the pandemic (2020). So beware of interpreting these numbers.

Now you might still be left wondering why the roaring 20s aren’t coming. A slight decrease in car purchases is not enough to nip 2 years of living in isolation and deprivation in the bud, right?! Well, all the above mentioned factors are also aided by the fact that incomes are becoming increasingly volatile (read: unpredictable) on top of not keeping up with inflation and the rising cost of living. This inability to pay for more luxury items and experiences is likely to have been partially curbing the expected exuberance, but it has also lead to increases in consumer debt.

Consumer debt soared by $52 billion in March (US) as a result of reduced repayments due to gas price increases and inflation increases. As the debt keeps growing, the FED is worried about declines in consumer spending and another recession. In Australia similar trends and concerns are on display.


So what we have here is a period of depression (pandemic) which has somewhat been resolved, but unfortunately has not been followed by massive economic growth. Rather, it has been followed by interest rate increases, resource shortages and rapid cost of living increases, significantly contributing to increases in consumer debt. And that’s without the luxury spending we were “hoping” to see. I too would have loved for Jeremy to be right. I think I would have enjoyed experiencing the roaring 2020s. But they aren’t here. And they aren’t coming. We can’t afford them.

Behavioural Science

Personal Finance



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