Source: Advertising Age

Younger people today -- in fact, people of all ages -- no longer see the car as a necessary expense or a source of personal freedom. In fact, it is increasingly just the opposite: not owning a car and not owning a house are seen by more and more as a path to greater flexibility, choice, and personal autonomy.

Underlying all of this is not so much a shift in "car culture" values but a shift in economic realities. Owning a car and a house are very costly, for individuals and the economy as a whole. What distinguished "savers" from "spenders," according to a Canadian study (.pdf), is outlays for housing and especially for cars. The amount of money the average American family spends on housing and cars went from 22 percent in 1950 to 44 percent by the 1980s to more than half today. It's not so much that America is a society of wanton over-consumers -- though some surely fit that bill -- it's that they've been trapped by the housing-car-energy complex that once stood at the very heart of the U.S. "Fordist" economy. And as any number of studies have shown (.pdf), America's over-investment in housing has badly distorted its economy.

We can't recover by breathing life back into that old economy. Lasting prosperity requires investment in a new and more efficient economic system. We'll never get there if we continue to spend every last penny on houses, cars, and energy. We need to reduce spending on the old Fordist consumption bundle in order to free up capital for new technologies, new industries, and greater skill and personal development broadly.

Some of that is already happening as people downsize their homes, downshift consumption, and trade train rides or walkable neighborhoods for long suburban commutes. Young people are at the cutting edge of these shifts, as they are just starting up in their jobs and careers; choosing places to live, work, and raise their families; and deciding how they want to live their lives. Great Resets like this are generational events. They do not spring forth overnight but emerge gradually over time as millions upon millions of individuals and families reset themselves in light of new economic realities. We remain in the very earliest stage of the current reset.

While some look at rebounding car sales or an uptick in the housing market as a sign of economic recovery, from where I sit, the shift away from driving and cars among young people is a much better indicator that the economy is starting to head in the right direction.

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