Low Spending Is Taking Toll on Economy

[onehandle]

Source: New York Times

For months, beleaguered American consumers have defied expert forecasts that they would soon succumb to the pressures of falling home prices, fewer jobs and shrinking paychecks. Now, they appear to have given in.

snip...

“This is not a fluke or a technical quirk,” said John E. Silvia, chief economist at Wachovia in Charlotte, N.C. “It’s fundamental. Real disposable income has been squeezed.”

Consumer spending fell for a broad range of goods and services, including cars, auto parts, furniture, food and recreation, reflecting a growing inclination toward thrift. Areas in which spending rose were predominantly those not considered optional purchases, including health care, housing and utilities.

The fact that the economy expanded at all, even by a tiny margin, sowed hopes that a recession might yet be averted. But most economists found in the details of the preliminary report signs of broadening economic distress at home even as businesses expanded production to meet growing demand from abroad.

Read more: http://www.nytimes.com/2008/05/01/business/01econ.html

---

Are you spending? We're not spending.

I had to return something to a mall last night and it was EMPTY.

[Delphinus]

1. Reagan's voodoo trickle-down economics at work!

Everything contracts.

[DrDan]

7. beat me to it - I was going to post that very thought

St Reagan's economics at it's glorious best

[Sanity Claws]

2. Home Depot seemed desperate

I was on Long Island yesterday and stopped off at a Home Depot to pick up some household items. It was hard to determine how busy it would normally be at that time of day on a Wednesday. What struck me as really unusual was twice, while I was walking through the aisles, I was approached with sales spiels for home improvements and prepaid cards with a discount. Usually, stores just set up a display and let people come to them for such things. Strange.

[onehandle]

3. That happened to me at Home Depot a couple of days ago.

A young lady approached me in an aisle and offered a "free kitchen cabinet remodeling consultation."

Struck me as very odd. Now after reading your post, I get it.

They are based here in Atlanta. Their sales have been way down for the last couple of years.

[AlexDeLarge]

17. Best Buy too

The same thing happened to me in a Home Depot here (Maryland). As I walked into the store, a woman approached me about getting a 'Free' estimate on kitchen design/upgrades.

The other thing I noticed when I went to Best Buy the other day during lunch was that there were more sales people in the store than customers. This was a Friday, a warm, beautiful day, at noon.

Where are all the consumers that are supposed to boom this economy?

[Lorien]

32. Target was a ghost town tonight

they only had two registers open, and I didn't have to stand in line. Last year at this time five would have been open, and all would have had lines (it's in a very busy section of town).

[soothsayer]

4. Take your money out of the evil large banks and put it into nice local banks in

your community. Send a strong, clear message that we don't like an economy that depends on us racking up huge debt, with all the profits from that being funneled to the same gigantic financial institutions and a small group of the uber-rich, with none of it staying in or benefiting our local communities and one another. When you put your money into large banks, you end up supporting and financing all kinds of things you dislike, like outsourcing jobs to other countries. We can actually change things by changing our behavior. We can kill the tapeworm before it starves us to death. visit catherine austin fitts' site (www.solari.com) to read more about the tapeworm economy and loads of ideas as to how we can act to change things for the positive.

[taylor egv420106]

5. What are these "local banks" you speak of

Most towns all the local banks have been gone for quite some time.

[soothsayer]

23. Credit unions. Savings and loans.

from solari:

How to Find a Local Bank

A. Identify Local Banks

1. Compile from your local Yellow Pages a list of the banks and credit unions in your area. Delete names that you know to be large banks, including names on the Solari U.S. Banking Tapeworm 20 List.

2. Visit your local Chamber of Commerce and ask for a list of all banks in your area. Ask which ones operate only locally and/or regionally and which are owned locally or regionally (or, if credit unions, which ones are controlled locally).

A local bank is a bank that operates within your local area and is primarily owned or controlled by people who live within or near your local area.

A regional bank is one that operates in your state and a few other states and is owned and/or controlled by people based in those states.

http://www.solari.com/campaign/HowToFindLocalBank.htm


http://www.solari.com/banks/


I know that my county has one, but I haven't checked to see how crooked they are yet.

[SpiralHawk]

6. "You noisy proles are at fault for the bad economy." - Republicon propaganda borg

"Smirk." - Republicons

[Phred42]

8. I knew it! It's you DAMNED CONSUMERS - NOT CONSUMING

That is killing this economy.

You all ought to be ashamed of yourselves.

Now suck it - get out that credit card (remember that "Reagan taught us that deficits don't matter") and get out there

and SHOP!

[crim son]

10. In love with your sig pic.

:rofl:

[Phred42]

19. Tx

;-)

[bdamomma]

25. that picture is speaking the truth.

that is what these repigs are doing to us.

[tanyev]

9. Welcome to the p3wnership society.

[LiberalEsto]

11. Well, gee!

If those corporations want us to spend money, why don't they let us have some decent paying jobs so we can earn some money?

They're all so busy laying Americans off and sending our jobs overseas, or importing cheap foreign workers on H1-B visas, that they haven't seemed to notice that we need jobs in order to make money. Well, duh!

And for some peculiar reason, we seem to need jobs that pay enough to let us get someplace to live and take care of food, medical and utility bills, in order to have anything left over for buying non-essential products. Aren't we a nervy lot!

Why is it that the corporations/repigs can't seem to grasp this simple fact:

People - need - money - in - order - to - spend - it!

We can't buy very much if we're all working at low-wage Mall-Wart or McD's jobs.

I guess the corporate types are too busy counting their loot to notice this.

[GTurck]

18. They are beginning to hurt...

The moneyed class has finally begun to feel a pinch but they won't ever understand the reality until it hits them hard.
My husband and I have known for a long time that they are living in the biggest bubble of all. One that is so vast they don't even know it exists but watch out when that one bursts. It may be us proles who are angry now but when the silver spoon set has to settle for a smaller house, cheaper car, fewer if any vacations, etc, they will be the loudest and most violent revolutionaries on the planet. The communist party under Stalin was run by the elites not the workers and small businessmen.
Our greatest strength is to let them eat their own assumptions; that is that they won't have to pay for their arrogance.

[soothsayer]

24. Wrong. They don't want you to spend money; they want you to create DEBT.

Debt = money. Spending money you actually have doesn't help them. It helps you, but not our overlords.

[Trajan]

30. There it is right there .... Bingo ....

Wages ...

Wages .....

WAGESSSSSS !

Scream it from the rooftops, Brotha ....

These right wing ass-bastards have been suppressing wages for so long while the false economy of easy credit with exorbitant fees have combined to strangle family income for DECADES ! ...

We are reaping what they have sown ...

In the end: EVERYONE takes it in the shorts when sales revenues dry up ....

Whassamatta Mr. Pickens ? ... Aren't the Chinese buying enough of your goods ?

But now the filthy rich can now buy everything for pennies on the dollar because they can wait out the storm, and then come roaring back when liberal economic policies return some balance to compensation ....

That would be after the conservatives lose control of government by being voted out of office by angry citizens ....

That IS going to happen ... right ?

[bronxiteforever]

12. A Strong America is a THRIFTY America-Maybe the country will get back to its roots

Materialism is a national dead end.We have lost ourselves in a spending bender.
Time to get rid of the money changers in our republican temple and sober up.
Consumerism is bad for the planet, bad for the country and hell on the workers slaving away in unsafe conditions making our crap.
Real values are not pins worn on lapels but LIVED.

[Demeter]

13. Killing Lower and Middle Class Income Loss Is Taking Toll on the Economy

Get the story straight, MSM! WE ARE the Economy--and we've had the fraudsters' foot on our throat, squeezing the life out of us, since at least 1973. We die, you die, everything dies. Even Cheney.

Inflation will not solve this problem, but that's all that TPTB are trying. Jawboning won't solve this problem. Taxing the untaxed wealth will.

[Thor_MN]

14. Sorry folks, it's my fault

After getting laid off last November because the manager they hired two years after I started didn't like me noticing that he usually didn't know what he was talking about, I found a job that paid much better in January. Being out of work for two months put me into no/low spending mode, so now my bank accounts are spiraling upwards with cash that I can't force myself to spend. Haven't had Credit Card debt in 10 years, have a zero interest car loan and a mortgage that my payments are now over half principle reduction. Damn, I'm a saver... It's all my fault...

Seriously, I found it interesting that "Liberal" me is vastly more fiscally conservative (personal financewise) than the sterotypical "Conservative". I see the RightWingnuts out there, credit card debt, interest only mortgages, maxed out home equity accounts out of their ears and they call themselves Conservative. Close minded, fiscal idiots in my book.

[bronxiteforever]

15. I thought all of us liberals were "elite"? BTW how do conservatives

appear as fiscally sound after the trillion dollar Iraq adventure:shrug:

[Habibi]

16. Funny--every time I go to a mall here in Rochester

(which admittedly isn't often), the lot is packed with cars. Don't know how many are actually buying, but it did seem that quite a few shoppers were carrying bags of stuff.

Saw the weirdest commercial for Visa at the gym this morning: Garden supply store doing brisk biz, birdies are flitting about, colorful flowers are popping up in pots, and there's a steady stream of credit-card swiping at the cash register. One lady writes a check (OMG WTF??) and the happy shiny commerce comes to a dead halt, while everyone looks at her as if she's crazy. Next person in line swipes the ol' Visa, and everything goes back to happy shiny. Tagline: "Life takes Visa."

God, I am really out o' touch.

[krabigirl]

20. Same here in Orange County, CA. Malls are very crowded.

I don't get it - this is like ground zero of the subprime mortgage crash. So many people worked in mortgage and real estate, and many have lost jobs. But people here seem to have to give off that air of affluence....

[ptolle]

21. faster money

Isn't the catch line of that whole campaign something about life takes "faster money"? I guess if you can spend it more quickly it gives you less time to think about sounder decisions.I'm not sure that velocity increases the multiplier factor, but I guess it sounds good, and there's all those fees and stuff to make more money for the banks.

[bikebloke]

22. The mall replacing the village square.

Without some sort of community center or village square, I suspect people flock to malls not to spend but people watch, socialize etc.

[Habibi]

26. Maybe.

And in my breezy pass-through I might have missed the social interaction. (I only go to the mall these days for one thing: a hair-care product that has the word "Shine" in it.) But it seemed to me that there was very little of that going on. Mostly it was just the odd small band of teens; young couples with babies or toddlers; lone women with packages, and elderly couples wending their way from Sears to Macy's for the exercise, all keeping very much to themselves. Maybe some of them were there *hoping* for some socializing.

But yeah, malls are a lousy place for that. They center on commerce, not community building/maintaining. Creating community assumes you know with whom you are building a community, while malls pretty much just want a bunch of strangers to spend money together and then leave when they're done.

[bikebloke]

27. I can't stand those places either.

If I have no other choice, I run in, get it and get out.

I suppose I was being optimistic. Unless they're drawn instinctively. Like in the first Dawn of the Dead movie. The zombies were returning to the place they once were familiar with while living.

[NickB79]

36. That's what we do when we go to the Mall of America

We just walk around, people-watch, window-shop, maybe grab some coffees or smoothies.

It's a cheap way to pass the time and chat with friends while getting some exercise.

[Psephos]

28. I was Time's Man of the Year in 2006, and in 2008 I am in control of the US economy

Wow. I am one bad-ass mofo.

[Doctor_J]

29. That's right - it's the (non)spenders' fault

after paying $3.50 for gas and more for milk, why don't stop on the way home and buy a computer and a second car?

Oh, that's right - you have to go to the doctor and your pay just got cut.

Have I mentioned lately how much I hate these people?

[InkAddict]

31. Have you heard the bank commercial ...

The retired couple's wife talks about taking a home equity loan, with they purchased an RV (gas hog) to drive-by and visit their children. They're going to stop at Junior's first, because he's got the beach house.

:puke:

[raouldukelives]

33. The mall here reminds me of a zombie movie

Shuffling feet and moaning at products they once madly consumed. Notice quite a few benz's and beamers in the goodwill parking lots lately as well. Shopping is a feeling.

[Jamastiene]

34. That's because the prices of everything,

especially, gas, is so high. If we cannot afford to go anywhere, we cannot spend the money once we don't get there. Yet, the oil companies made billions in profits. Methinks they could lower gas prices now.

[KillCapitalism]

35. Stores like Wal-Mart & Target are still busy around here.

I guess they're still busy b/c people still need soap, laundry detergent, T.P., light bulbs, and other everyday stuff.

What I have noticed is that restaurants are REALLY dead. I went to a local pizza joint last Friday night to pick some food up & it was really dead in there. This place used to really pack 'em in on weekend nights, but not anymore.