Thursday, January 14, 2010

The Consumers Are Not Consuming

We have been endlessly informed that consumer spending is critical to any sustained economic revival, since consumer spending accounts for 70 percent of total economic activity. We all have been urged to get patriotic, do our bit to save the economy, go out and buy, buy, buy!

Remember Bush the Simple and his plea for more spending to save the nation right after 9-11? Go out and buy more and more of that cheap but high-priced offshore-manufactured stuff that will end up gathering rust and dust, unused and forgotten, tucked away on cluttered shelves, stuffed away in a closet, or consigned to the trash heap we all like to call the "garage".

Regardless of federal prodding to max out our credit cards one more time, retail sales fell in December, closing off a year in which sales have had the largest drop on record. Consumers without jobs do not consume. When you have millions and millions of jobless consumers, guess what happens:

Retailers suffered their worst annual performance in more than four decades in 2008, according to data from the International Council of Shopping Centers.

Duh.

So where is all the activity that has pushed the stock market up to 10,500 coming from? Certainly not from an upsurge of consumerism.

It comes unsustainable government spending, the spending of hundreds of billions we do not have, money we have borrowed from other nations.

We have lost millions and millions of jobs to other countries, job losses championed by the federal government with its insane polices of free trade, its disastrous course of creating permanent American disadvantage with the likes of NAFTA and GAT, their elitist but simple-minded ideas about how America could become a "service" nation and not have to dirty it's hands with all those low-class manufacturing jobs.

It's not working. It cannot possibly ever work. There is no way that 100% of America's workers can end up in glass towers, sitting in front of computers generating mountains of ultimately valueless paperwork.

Unfortunately, we just can't ask for all those ordinary American jobs back that created merchandise that had actual exchangeable value to the rest of the world, and return our economy to the status it once was. Americans that were used to $20/hr. building widgets cannot possibly compete with a Lower Slobivian being paid $1.00/hr. to do the same job, and once the widget factory is up and running in Lower Slobivia, that's where it will stay, along with all the widget jobs.

And that's what's happened. Greedy corporations, led by men of historical short-sightedness, provided the money and expertise to build widget factories around the world where cheap labor was plentiful, to provide widgets to America with a huge built-in profit. But since America has lost so many good-paying jobs - including those widget jobs - masses of Americans can't afford widgets anymore, at any price.

Well DUH.

The Lower Slobivian widget factory now supplies the world-wide demand for widgets, and even if we build a brand-new hi-tech widget factory hoping to recover widget making jobs for say, a reduced pay of $10/hr. or even less, we still lose, because there is no way we can survive on the competitive pay scale required to match that $1.00/hr. that that a (insert the nationality of your favorite slave laborer here) gets.

Those millions and millions of jobs are lost forever, and we just keep losing more, as this present federal government continues the policies that are taking us down the road to national suicide.

Bottom line? Our economy is collapsing, the gum'mint can't keep up spending borrowed money, but they will print more and more money... Until inflation destroys the dollar. The politicians will run out of lies, they will all(to save their worthless hides) skip out to some offshore haven, and the rest of us will go down the tubes.

Get ready. The only person that will help you survive is you. In the coming new America, consumerism as we have known it will cease to exist. We will buy only what we need to survive at a much lower level of comfort that we will learn to tolerate. We are about to become a two-tiered nation consisting of the haves and the have-nots, and the vast majority of Americans will be a part of a huge mass of have-nots.

We will survive, but not in a way any of you have hoped for, and those of us on a fixed retirement income are in for a new hell on earth.

1 comment:

Ted Amadeus said...

Why Bob, do you mean to suggest the "global economy" was nothing but a fairy-tale; a big fat lie created by the OMFR to bullshine the rest of U.S. while they moved their businesses and assets somewhere else?
Sounds all-too plausible to me!