American Express reported its cardholders spent 10% less in the last quarter — that’s my card, I despise credit card balances, I’m a total Membership Rewards miles whore — ten percent less than the previous year’s holiday quarter. That says a lot. Ten percent.
Now retail sales are forecast to also decline this calendar year. The news was delivered on NPR this morning like it was the end of the world, but it begs the question: why do we need to buy more crap each year than the year before? Sure, growth is good, but at some point the world needs to leave the SkyMall catalogue in the seat pocket and not commit credit card seppuku for that solar powered garden gnome or waterproof iPod dock.
David,
Garden gnomes are an easy target. Sure, I don’t have one, and therefore don’t see why anyone would want or need one. We can start with things the majority of us might agree we don’t need and move up the “chain”, eliminating things.
Trouble is that it’s all interconnected. The guy making gnomes probably has a PC or wants one, and if not, the person at the corner starbucks where he buys his coffee does. See the trouble?
It’s not just gnomes. It’s new cars, new houses, new ipods, new phones, new PCs, etc, etc.
Burgeoning growth is simulatenously our benefactor and our curse. I don’t see how we can unwind the world – hopefully smarter people understand how.
Respectfully agree with you, David, and disagree with Mark. If people stop buying garden gnomes, then the garden gnome makers will have to start making something else.
There’s nothing wrong with this. We stopped buying cotton gins. Fifty years ago, we didn’t buy iPods.
Maybe this will force people to turn from manufacturing to service. No one’s buying new clothes? Go into the alterations and mending business. Oh yeah, manufacturing to service already has been going on.
In my family, we’re an ex-builder and an ex-journalist. Sure people still want remodeling and news, but cheaper than a lot of other people can provide them and still make a living wage. Still watching this shake out.
Bottom line is, some businesses won’t survive. My eye is on the ones that sell $60+ “bouquets” made of fruit. That just means people who got attached to those foofy products will have to make their own and be in the market for fancy melon ballers instead. A crisis for one is an opportunity for another; blessed are the moments when those people are one and the same.
I, for one, have no problem with personal consumption declining. It sucks the wind out of our economy, like getting kicked in the nuts, but we’ve become a nation of debt.
Our collective savings rate has dropped from from 10% of our disposable income in 1984 to nothing now — with a small recent rebound. Meanwhile, household debt has skyrocketed. We borrow and spend. And what do spend on? Crap.
It would be nice if we spent money on things that mattered but now it is all disposable. “Durable goods” aren’t so much.
Yes, that washing machine in 1958 saved a bunch of time for that household. Not so sure we got those kinds of efficiencies anymore.
Instead, we borrow money from overseas (China, Japan, Germany, etc) only so we can buy the crap they make. They get dollars from us and need to do something with them so they buy our debt. Rinse. Repeat.
I believe firmly in immigration and lots of it. They’re the ones willing to forgo the purchase of a 50″ LCD TV to save money so their kids can get an education — one of the few wise spending moves. They work hard, they sacrifice, and most importantly, the SAVE. The rest of us? Screw that. I want dominoes delivered and a massive LCD. Sacrifice is for the other guy.
Obama may be able to spend ourselves out of this little kick in the nads but in the process we’re borrowing even more money. Eventually, the spigot starts to slow. Until we change our consumption habits to something we can actually afford, save some money — which goes through the banking system and gets lent out in that nice, money way — and make production the main driver of economic growth, we’ll be sucking wind.
That, and I think we need a fricking REAL high speed rail system. Acella is a joke. I want 200+mph on the NE corridor. Air is too inefficient, both from a cost per mile standpoint and a TIME standpoint considering the TSA’s needs to undress us all and confiscate mom’s salad dressing.
Garden gnomes? Show me a recent immigrant spending hard earned near-slave labor wages on garden gnomes. Nothing says, 8th generation, massive credit card debt, and obesity like a nice gnome.