Saturday, November 29, 2008

Making Cents of Dollars

It's always going to bring a snarl from me to hear the business reporters pinning fault for the poor economy on consumers' holding back on spending. Black Friday was the occasion for a new spate of conjecture about what it will take to get those meanspirited consumers to open up their pockets... ignoring that there's nothing in those pockets when they are opened. Hint: lack of salary means loss of consumption. When eight years of right wing reverse Robin Hood policies prevail, there is a loss of buying power by the consumers. Somehow that logic escapes financial planners for the corporate section.

Seems like a simple enough equation to me, but somehow that relationship continually misses the followers of Ayn Rand who seem to be dominating our corporate realm at the moment. Gloom prevails, what to do, what to do when the American shopper disappears?

Good sense may be returning out of sheer desperation to policy makers. (However, I have gained over the past eight years a growing confidence in the power of obstinance (pigheadedness) on the part of those who are wealthy by the accident of birth.)

While calling it consumer confidence, yesterday the Gallup Poll showed a measure of common knowledge about the state of our economy that I thought worth a good look. Record levels of negative readings are being swept in by polling. It can be labeled as mere opinion by those reporting it, but the public at large is up against the wall and that is showing up in the statistics. Jobs and salaries are disappearing, and this is how it appears to business planners.

... the late October/November readings on this measure (Economic Confidence) since 1992 punctuate just how negative consumer attitudes are today compared with past holiday retail seasons. Public confidence about the economy is more negative today than at any other time since the trend was established in 1992.

Entitled "Americans In No Mood To Shop", what the Gallup Poll report shows almost inadvertently is that reality is trickling up from the former working class. Their perception is from the scene of the crime, where jobs and salaries are being obliterated.

From a business publication,, I extracted the following fact, with advice:

Starting Salaries Decline

A study finds some new hires are making up to $10,000 less than a month ago.
"While overall median salaries might be slightly lower in a few professions, keep in mind that many new job openings are filled by professionals who are still getting a personal salary increase to go along with greater responsibilities and opportunities to grow," Jobfox CEO Rob McGovern said in a statement.

He said job-seekers should focus on finding a better job, rather than a better salary, since salary increases tend to catch up eventually.

What the business world has been interpreting as a great market for employers, free to pick and choose among the desperate while paying them less, is a vast wasteland of disappearing customers. While the employers are shuttling jobs overseas where the wage costs are less, they need to be looking for ways to get by with less, as well.

Your standard of living is about to trickle up from your consumers. It will feel really desperate. It isn't a lack of 'confidence', which is how you like to describe it. It's a lack of the means to support yourself. Coming soon to a bank account nearer to you, fewer numerical figures in front of the decimal point.

Can you hear me now?


Today the line about buying is that merchants are stressed because they ordered for a season that isn't materializing, so are making their deepest cuts now. Ergo, you must go out and spend now, while it's such a sacrifice. This from Wall Street Journal Report expert of the morning, Dana Telsey, CEO of Telsey Advisors. Thank heavens, I have the Word so that my bank will loan me the money to get in over my head and those of all my descendants for about seven generations! Now don't tell anyone that I gave you this excellent advice free of charge.

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Blogger Shaw Kenawe said...

When eight years of right wing reverse Robin Hood policies prevail, there is a loss of buying power by the consumers. Somehow that logic escapes financial planners for the corporate section.

It was very easy for me to make the decision to scale way back this Christmas--not that I normally overspend at Xmas--I actually hate the consumer part of that holiday.

I don't think I'm the only one who will be doing next to no shopping this season. I'm happy for that, since I dislike it so much.

When do you suppose the corporate geniuses will figure this thing out?

We need to become a nation of spending on public works (bridges, infrastructure, and working on those issues).

We don't need anymore plastic crap toys from China.

12:17 PM  
Blogger Ruth said...

Scolding us to Go Shopping just didn't do it for the Worst Administration Ever. Unfortunately, it will take awhile to dig ourselves back out of the pit they threw us in. We just need to arrange to leave them there while we get back out.

12:34 PM  

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