Note his allusion to shopping reflects the fact that 70% of the economy is based on consumerism. A bullish Christmas Shopping season is supposed to make up for a whole year of dramatic ups and downs
It starts on the day after
the Thanksgiving holiday with heavy sales and deep discounts called "Black
Friday."
And this year shopping marathon seemed off to a good start. The crowds grew and initial reports said that sales were up. But, as the press reported. that the big day was driven by aggressive discounts and earlier than ever shopping hours.
The Washington Post
later reported that "Black Friday
is a bunch of meaningless hype because strong sales results around Black Friday
actually predict slightly weaker holiday sales overall."
The National Research
Federation's estimates for Black Friday spending are widely disseminated but
not believable either because they are based on a consumer survey, not real data, with their accuracy open to question .
"Even a legitimate
boost in sales can indicate variously that consumers are feeling flush, or that
they're desperately chasing door busters because money is tight. While the U.S.
Commerce Department doesn't break out Black Friday sales, its figures suggest
that the final tally for holiday spending isn't likely to be as stratospheric
as the trade group's weekend numbers suggest."
The Wall Street
Journal now admits consumer spending is "wobbly."
In fact, every year,
the initial reports show a shopping boom, but later filings by credit card
companies reveal a fall-off. In January next year, stores are likely to be
flooded with returns by shoppers who realize they can't afford all their
goodies. This proves Christmas shopping it is not the economic miracle it is
always cracked up to be.
Meanwhile there are
other economic indicators that show there may be more pain than gain, as these
headlines attest:
" Home Seizures are
way up as the flow of foreclosures pick up
" A delay of Bank of
America'a return to selling mortgage securities shows the bust is limiting the
housing market's revival.
" More and more bank scandals offer evidence of massive fraud and manipulation. Cash fines substitute for prosecutions assuring the frauds will continue. A new report by the center for Responsible Lending confirms that predatory lending has not been checked.
"The Federal Reserve
Bank is twisting up its "Operation Twist" and pumping more money--money they
print--into, reports ML-implode.com, "buying $45 billion of longer-term Treasury
bonds per month in addition to the $40 billion per month of agency mortgage
backed securities announced in September. By dropping the sales component of
operation twist, it means that the entire $85 billion of asset purchases will
add to the Fed's balance sheet as none of it will be sterilized.''
None of these issues
are discussed in any comprehensible detail in our media. The focus since the
election has been on a contrived distortion--the so-called "Fiscal cliff."
Writes Paul Street, "The fiscal fixation is childish and
irresponsible in a country plagued by mass unemployment, endemic job
insecurity, and related widespread poverty
But that's not all that gets lost in the current mass-mediated deficit mania. Let's assume that "the deficit" is a genuine problem with grave long-term implications for the U.S. economy (i.e., crippling interest payments, loss of national sovereignty, and more). Two obvious solutions are to (1) cut U.S. "defense" ...expenditures and (2) initiate serious health care reforms on the model of the health insurance systems that prevail in other industrial powers."
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