Well Thanksgiving is over, “Black Friday”, “Blue Saturday”, “I’m not sure what the hell I’m doing Sunday” and “Cyber Monday” have all come and gone. Consumers spent record amounts of their hard earned cash like there was going to be no tomorrow. Maybe they know something we don’t. Then again, maybe not.
We have been in the throes of a DEPRESSION, that’s right I used the “D” word, for the last two years. Millions have lost their jobs, unemployment is still holding at over 9% and if the housing market were a patient at a hospital they would have been pronounced dead a long time ago. Obama’s Healthcare is set to kick in scaring the crap out of all the major companies in the United States (something that should scare the crap out of you too), the federal tax cuts are set to expire and no one on the hill seems to be able to pull their heads out of the ground long enough to know what to do next. But it is estimated consumers still spent over 45 BILLION dollars in stores and on line over the four day Thanksgiving holiday. Go figure.
However, this could be simply a “He who dies with the most toys wins” scenario or consumers saying “Screw it I want that 42 inch Hi Def LCD flat screen TV and the rest of the world can go to hell.” Either way it looked good for a little while but now retailers have stopped counting their money and good fortune and have snapped back to the real world. You know, that place where no one has any money to spend on anything. Suddenly retailers are worried that they did too good a job luring in those poor, salivating consumers with tales of 80% off and “buy one get one free”. Making all of us believe that an $800 laptop was something we couldn’t live without. Now that it is the day after they are afraid that most of us have spent all our cash and will have nothing to spend for the rest of the month or for that matter the whole of next year. “Lions and Tigers and Bears Oh My.” And you know what; they may be right.
This country has, for at least the last 50 years, encouraged it’s consumers to spend their hard earned bucks on things they didn’t really need. Like that new fangled refrigerator that actually tells you when you’re low on food; I guess opening the door and looking inside takes too much of an effort. Or that brand, spanking new 52 inch High Def, multi functional, 3D ready, internet connected, blue tooth and Wi-Fi compatible, computer savvy, TV. Yeah, the one that needs a $200 dollar a month satellite or cable connection to run. Or how about the trash can with the motion sensor to open the lid for you and while it’s at it also sprays an air freshener to keep it smelling lilac fresh(or was that the new toilet bowl). Either way it sounds good to me.
The trouble is it sounded good to a lot of people. But you know what this increase in consumer spending tells me? It tells me we’ve learned nothing in the past two years. That we are still like Lemmings following each other over that financial cliff happy in the fact that misery loves company, global company.
In reality this Recession, yes I know I now called it a recession because certain economic indicators tell the economists that we are on the upswing again, will take at least 5 to 10 years to work itself out. Some are even saying decades. Which is understandable since it took us decades to get into this mess. While consumer spending does help it will only help if consumers are spending EXTRA money not the money meant to pay bills and the money meant to live on. Is that the case this last weekend? Only time will tell. Will this be a very, Merry Christmas or just more “Bah Humbug”? Personally I think most are leaning towards the “Bah Humbug”.
To really pull out of this financial tailspin I think two things need to happen:
The first is the American consumer needs to change the way we shop. We need, at least for a while, to go back to a mindset that has not seen the light of day for close to 60 years. We need to buy ONLY the things we really need and not the things we really want. We need to shop smart and shop when only necessary not every time the retailers dangle their artificial saving in front of our faces. Then when we see economic growth it will be real not artificially inflated.
The second is the American people need to understand there is no “quick fix” scenario out there that will help us out of this mess. As I said earlier this has taken time to happen and will take time to adjust itself. We just need to let it run its course no matter how painful it is. As my good friend Frank said of President Reagan in his article “Is the Future Still in America?”, “he did not act when he believed that no action was necessary. When the stock market crashed in October, 1987, he did nothing despite the cries for government intervention. After this correction, one of the longest peacetime periods of growth continued. If only Mr. Obama and Mr. Bush had done nothing when this economic crisis occurred? Maybe, it would be over now.”
Maybe it would but I guess we’ll never know now. The Recession is still with us despite this weekend’s upwards blip on the radar. And it’s that very reason that has left retailers scared and asking themselves, “Is there a Morning After?”
In a closing note I’d like to comment on the passing of one of Hollywood’s most versatile and funny actors, Leslie Nielson. His career spanned more than fifty years and included such classics as “Airport”, “The Poseidon Adventure”, The “Naked Gun” trilogy, the short lived TV series “Police Squad” and my personal favorite “Forbidden Planet”. Mr. Nielson died at his home in Ft. Lauderdale, Florida Sunday from complications due to pneumonia. He was 84. His sharp wit and infectious smile will be missed. And remember, “Don’t call him Shirley.”
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“The first is the American consumer needs to change the way we shop. ” Really? Why?
Isn’t the real problem the artificial injection of the so-called stimulus? Isn’t the real problem the out of control spending by the government?
Don’t you think a large part of the problem is the group of greedy, lying, crooks we elect as our representatives?
There’s nothing wrong with the fair and free exchange that a lot people decry as consumerism.
lynn…you’re so wrapped up in Obama hatred you really miss the point. Regarding the debt our spending is a drop in the bucket to be sure but when people spend money they don’t have on products they don’t need it artificially inflates the recovery. That falsifies the upswing in the economy and everyone thinks things are alright when they are not. You can blame all of this on the Obama Administration, and they are responsible for a portion of this problem but this problem, as I stated, started decades ago and was allowed to fester by every administration…Republican and democrat alike. Like I said our shopping is now based on want not need and as long as we continue to spend money we don’t have on things we don’t need this recovery will take longer. And no I don’t agree that the crooks we elected are the major part of the problem.
Ira, you and I agree on a lot of things and I respect your opinion on a lot of things but your line about being wrapped up in Obama hatred in response to my argument is just really stupid. Obama doesn’t get all the credit for messing up the country. It started around 1913 with the advent of the Fed and most politicians have been on a feeding frenzy ever since.
Also, you didn’t talk about consumers buying on credit; you talked about them buying what they need and what they want. The financial crisis isn’t about consumerism. It is about the growth of the leviathan government. It’s ALL about government spending and punishing the productive and rewarding the moochers.
If your neighbor wants to go buy a 52″ tv that was earned who gives a crap??? How does that hurt anyone? How does that person’s expediture effect anyone else adversely?
By contrast, how does it effect EVERYONE when our government decides it knows better than we what our health choices should be? Or what light bulb we can or can’t use? What about when they take the one-size-fits-all approach to our energy use and will begin turning off our thermostats from their central location?
How does it effect you if I want to buy a diamond ring – even if I buy it on credit?
It’s not private sector/consumer spending that is destroying this country. It’s the government’s spending and regulations that are strangling us.
I objected to the premise of your article because it was moralistic and frankly, wrong.