arrested_development-jpgDid you catch 20:20 last night? It was all about the effects of the credit crunch on the lives of ordinary Americans (and Icelanders at the end). The first segment was the story of a wealthy family who lost everything and the parents who had no choice but to keep them all together. By cutting back on a lot of stuff. For example, they actually had to cook at home.

No, this is actually not me making fun of them. More interesting is the key takeaway revealed at the end: the fact that they’re now happier people for having less. They called it the new normal. The new happier normal. Back to the roots so to speak (literally, at one point the Dad showed a beet to his son, who marveled at the foreign sight).

Here is my own personal takeaway: did you notice that whenever something big happens, people extrapolate the effects of that into all eternity? We already knew that they do it with assets time after time, creating bubble after bubble along the way. But they actually do the extrapolation with everything. Currently every economist runs with this “no more credit EVER, so what does this mean for our future?” theme. Nobody that I know of ever expects a return to the old normal.

But experience should teach us that nothing is stable. Bubbles eventually deflate despite everybody’s frenzy that created them in the first place. Life moves in cycles. We’ve just experienced a down. Next will come an up and before we know it we’ll once again have the story of the real gossip girls and real desperate housewifes on late night TV, living it up in all decadence, and inspiring the rest of us to follow suit.

And I guess then 20:20 will have another feature on it, on the new old normal. Giddy-up!