don't "get out there and spend" and think you are being patriotic. save for yuor ownfuture like you are supposed to. true capitalism doesn't need a coerced consumer
Are Consumers Driving Us into Recession?
by Llewellyn H. Rockwell, Jr.
With recession looming or already here, the time has arrived for finding scapegoats. Expect a long list of these. Here is the target of the day: tightfisted consumers. A decline in personal consumption, writes the New York Times, "would be the first since 1991, and it would almost certainly push the entire economy into a recession in the middle of an election year."
This recalls Bush's advice after 9-11, when he assumed the mantle of the nation's personal financial planner. He told everyone to go out and spend money so the economy could avoid recession. Even then, there was confusion about whether he was right or wrong. Some sensible voices pointed out that economic expansion is based not on spending but on capital expansion rooted in savings. That is to say, the only path to future prosperity is delaying current consumption in favor of future investment.
One only needs to think of the household budget here to see the point. If you are planning for the future for your family, what is the wisest course? Does one go into debt as much as possible, buy the largest house and the biggest car, throw lavish parties, hand out all existing liquid funds to friends and strangers? Based on the view that consumption is the way to avoid economic problems, this would indeed be the right course.
But this also defies everything we know about family finance. The path to a secure prosperity is delaying consumption. One should spend as little as possible and save as much as possible for the future, and let that money be used in the service of investments that yield a solid rate of return. Those who have chosen a different path now see the folly: they are being burned in the soft housing market, for example.
The lesson is also true for the nation at large, because the logic doesn't magically change when moving from the family budget to the national stage. Just because something involves "macroeconomics" doesn't mean that we should throw out all good sense. But that is precisely what people have done with regard to the economy, since J.M. Keynes somehow convinced the world that up is down and left is right.
In a recession or a crisis, the right approach for individuals is to save. So too for the national economy. A looming recession will prompt a pullback in consumer spending as a rational response to the perception of economic troubles. This action does not cause the economy to fall into recession any more than more spending can save it from recession. The downturn is a fact that cannot be avoided. We don't blame umbrellas for floods, and, in the same way, we shouldn't blame tightfisted consumers for recessions.
There is no question that this is what is happening. American Express reports that the rate of spending by its cardholders fell 4% in December. Surveys of consumer satisfaction with the economy report a 15-year low. Retailers report that December was a "blood bath" (NYT's words) for them, with sales growing at the slowest rate in seven years. Market watchers are mostly concerned that high-income buyers are bailing out.
Again, it is critical to keep cause and effect in mind. The pullback on spending is not going to cause a recession. If we think about the long term, this is not a dangerous trend but a hopeful one. The more people pull back and save, the more the foundation is laid for a recovery after the current correction takes its course.
To see that requires that we take a long view. Government, however, seems constitutionally incapable of seeing the long term, much less doing the right thing to prepare for it. Making matters worse, this is that dreaded event called an election year. Prettying things up to make the economy palatable to voters is priority number one.
What does this mean? More monetary expansion. More government spending. We can fully expect that the Bush administration could resort to its old program of sending checks out to every American family with the proviso that the money has to be spent, not saved.
No doubt that many people would be thrilled by this. But look beneath the surface. Government has no money to spend on anything that it doesn't extract from the pockets of you and me and the whole American public. This is easy enough to see concerning taxes. It is not so easy to see when the government runs up debt that is guaranteed by the printing presses.
The monetary issue can be understood by analogy to orange juice. The more water you add, the less substance it has. If you keep adding, eventually you come to the point when you can no longer tell that it was ever orange. This is the same with money. If you print enough – literally or electronically through the credit markets – it will continue to lose value. If money grew on trees, it would be about as valuable as autumn leaves.
So long as we have a central bank, government will be tempted to take the easy path of easy money. There do not need to be any secret phone calls from the White House to the Fed. The culture of policymaking itself is capable of broadcasting the right signals to all important players.
In any case, it is a myth that the Fed makes policy independent of political pressure. It is subject to the screams and hollers for looser credit in the same way that bureaucracies are responsive to demands for more regulation. It is what it is most suited to do in any case.
Yes, government can increase consumption, but by doing so it does nothing to care for the long term. The long-term health of a nation is not different from that of a household budget. Tough times require cutbacks and a beefing up of savings.
So let's not demonize the consuming public for doing what it should be doing. It's a good rule of thumb that when the government tells you to spend money, close your wallet.
I'd just like to say this about the recession/sub-prime market woes.
I'm not much of a consumer. And I have modest savings. I've never had trouble getting a job, no matter what the economy. I believe saving money for a rainy day is an excellent idea and if more people lived within their means, there wouldn't be a need for a sub-prime housing market.
It's just madness to give credit to those people who can't afford it. Did the financial institutions really not see this coming? If you can't afford a mortgage, charging people higher interest rates to make up for it won't make a lick of difference and just gets everyone into trouble.
I understand the need for people to have their own homes. But, for corn's sake, people, at least buy when you can afford it. And if you can't, there's nothing wrong with renting. The trouble is, when the US goes into recession, it affects the whole world. Fortunately for us, our economy is quite strong so we shouldn't be affected too badly. But it means everything will get more expensive. And that extra money you pay for food or rent has to be found somewere. I just feel sorry for those families who have to choose between paying the power bill and eating for the next week.
In this culture of gross materialism and instant gratification, it's no wonder so many people are in debt and struggling. But responsibility for your situation starts with YOU. The government isn't responsible for your smoking/gambling/crack/alcohol habit. Nor is it responsible if you don't put aside a little money every week for your power bill when you choose to go out and buy a $500 handbag like Paris has.
A little more fiscal conservatism by the Mr and Mrs Average Joe would go a long way to making things better. And the economy wouldn't suffer, because people will always buy stuff. Hell, even I love my DVDs, books, CDs, cosmetics, hobbies. But I don't pay for them at the expense of putting a roof over my head or food on the table for me and my son.
Here endeth the rant.
Lester sometimes you say things that almost make sense.
Sometimes you sound like Tom Cruise ... this is one of those times.
Let me make it simple ...
Recession, economy recedes.
Capitalism is driven by consumerism.
Consumer don't buy, retailers don't sale.
Retailers don't sale, wholesale order aren't placed.
Wholesale order aren't placed, manufacturers don't produce.
Manufacturers don't produce, employees at all levels are laid off.
Employees are laid off, unemployment jumps, spending stops and recession begins.
And you end up in economic gridlock.
This is why pumping money into the economy through consumerism wards off recession. It's a whole lot easier to keep the economy moving than trying to jump start it once it stops. I've made it much more simple then it actually is, but that's it in a nutshell.
Should people save some money, yes. Should they bury it in a jar in the backyard, no.
Llewellyn H. Rockwell, Jr. is a noted Libertarian and Ron Paul crony so a large grain of salt is required.
Quote from: Killer Bees on January 17, 2008, 11:25:10 PM
I'd just like to say this about the recession/sub-prime market woes.
I'm not much of a consumer. And I have modest savings. I've never had trouble getting a job, no matter what the economy. I believe saving money for a rainy day is an excellent idea and if more people lived within their means, there wouldn't be a need for a sub-prime housing market.
It's just madness to give credit to those people who can't afford it. Did the financial institutions really not see this coming? If you can't afford a mortgage, charging people higher interest rates to make up for it won't make a lick of difference and just gets everyone into trouble.
I understand the need for people to have their own homes. But, for corn's sake, people, at least buy when you can afford it. And if you can't, there's nothing wrong with renting. The trouble is, when the US goes into recession, it affects the whole world. Fortunately for us, our economy is quite strong so we shouldn't be affected too badly. But it means everything will get more expensive. And that extra money you pay for food or rent has to be found somewere. I just feel sorry for those families who have to choose between paying the power bill and eating for the next week.
In this culture of gross materialism and instant gratification, it's no wonder so many people are in debt and struggling. But responsibility for your situation starts with YOU. The government isn't responsible for your smoking/gambling/crack/alcohol habit. Nor is it responsible if you don't put aside a little money every week for your power bill when you choose to go out and buy a $500 handbag like Paris has.
A little more fiscal conservatism by the Mr and Mrs Average Joe would go a long way to making things better. And the economy wouldn't suffer, because people will always buy stuff. Hell, even I love my DVDs, books, CDs, cosmetics, hobbies. But I don't pay for them at the expense of putting a roof over my head or food on the table for me and my son.
Here endeth the rant.
Very well said. Karma for you.
Cheeze, your response would make sense... IF Lester were advocating anything remotely like burying money in a jar in the backyard, which he (or the column quoted) was not. Nobody's advocating pulling money OUT of the economy; the idea presented was very clearly "save and INVEST, rather than spend now." Investment is also a big part of the economy, and it's certainly more responsible in both macro- and personal economics than simply acting as a conduit between one's income source and retail outlets.
Quote from: nshumate on January 18, 2008, 07:36:43 AM
Cheeze, your response would make sense... IF Lester were advocating anything remotely like burying money in a jar in the backyard, which he (or the column quoted) was not. Nobody's advocating pulling money OUT of the economy; the idea presented was very clearly "save and INVEST, rather than spend now." Investment is also a big part of the economy, and it's certainly more responsible in both macro- and personal economics than simply acting as a conduit between one's income source and retail outlets.
It says ...
QuoteThe path to a secure prosperity is delaying consumption. One should spend as little as possible and save as much as possible for the future, and let that money be used in the service of investments that yield a solid rate of return.
Currently in this volatile time, I'm not sure anything will yield a solid rate of return as the column states. Short of long term capital investment, but this goes against the grain of this guy, and he doesn't answer what is a investment with a solid rate of return? He leaves if open to vagueness, he says delay consumption as long as possible, well
capital investment is a form of consumption so what's left? Burying it in jar in the backyard?
So anyway, I said that was in a nutshell and not an all inclusive lesson in Capitalism 101.
cheeze- first speaking of scientology did yuo know the fair tax was ifirst put forth by scientolgists? they oppose government intervention into health care (mainly pyschiatry). just fyi
anyway, like the policies that created it, the solution being bandied about for remedying the recession are short term and meant to influence the upcoming election. How about cutting out the department of education? or FEMA? I'm positive we can get along without those two organizations and that's a couple billion worth of beaurocracy there.
We have a 3 TRILLION dollar budget. There's NOTHING we can cut? for the sake of our country?
I saw Sam Browwnback and Chuck Schumer a month ago on CNBC begging ben bernanke to cut interst rates. brownback for the business owners and Schumer for the consumers (in general). there's your democrat and republican representation. devalue our currency, literally steal from us, so that these guys can get past their next electoral hurdle.
the people have done their part, it's time for the government to live within THEIR means
Quotethe people have done their part, it's time for the government to live within THEIR means
See you can say things that make sense ... I agree with you on that and I could go on a long diatribe about what government can cut spending on, and I'd start with entitlements, which is a single largest outlay of cash every month, thank you FDR.
Bush is said to be going to announce tax rebate here in a bit up to $1600 per family and that will
not work either, tax cuts work, tax rebates don't.
Here is a good primer on why ...
http://www.heritage.org/Press/Commentary/ed011008c.cfm (http://www.heritage.org/Press/Commentary/ed011008c.cfm)
have you read bruce bartlett's "Imposter"? I'm not the biggest fan of his but it's very good and makes the same point. rebates are a gimmick, they are almost welfare really.
defense spending is wholly out of control as well, it has to be said. not just the war, though I would argue that owuld be the FIRST place to cut. It's like 657 billion out of the 3 trillion or something. so they can make lasers that shoot around corners. how about don't get us bogged down in close quarter urban combat for 5 years? then we can get more of the best techology there is : soldiers.
The original article is a bit simplistic for me. Economic growth depends on keeping money circulating, which depends on keeping it in the hands of those who will spend it.
Keep it in a bank, and they'll loan it to people who will spend it. Invest it in a company, and they will spend it to make more money, which they make from people spending money. The more hands it passes through, the better.
Whether you personally consume, save or invest, the economy is driven by one thing - spending.
And personal spending can give you some control over who benefits from your money. The local Mom and Pop stores aren't likely to benefit as much from your mutual funds as the big corporations, but if you buy from them, they are more likely to spend their profits in your community.
From a personal point of view, you need to have some savings to retire on, and some money in the bank for emergencies, but from a larger economic point of view, there is only spending. Money in circulation, that's what it comes down to.
Andy- his point is this current problem was not BROUGHT on by tight fisted consumers and cannot fairly be said to be EXCACERBATING it as much as the governments own policies. You don't have to tell americans to spend for god's sake. People didn't make this one of the slowest christmas's ever retail wise because they felt like it. they did it because of gas prices and other economic factors. deal with those factors not the victims of all this, the american people
No, he's pretty clearly saying that saving your money is the way to long-term prosperity. Personal prosperity perhaps, but the bigger picture depends on keeping money circulating, and especially putting it in the hands of the right people, to spread the benefit to the retailers, wholesalers, manufacturers, and all of their investors and employees.
Slow retail sales are something of a chicken-and-egg issue. Are they part of the cause or just an effect. I'd say a bit of both. They're part of a cycle, just as Cheeze described. I've always been of the belief that recessions are self-fulfilling prophecies. Think of how the bottom can fall out of the stock market for no reason other than the fear that the bottom might drop out of the stock market. And they've actually put safeguards in place to prevent that since 1929.
I'm not suggesting you can have perpetual prosperity if everybody spent more money than they normally would. That's not sustainable. However, when people start tossing around speculation about coming recession, that does make some part of the population hold off on purchases they might otherwise have made, particularly the large ones. Maybe the economy has slowed, but suddenly, it's just slowed more, and that will cause it to slow more, and so on.
You can't argue that it's because the average consumer has no more money to spend. Regardless of where it goes, if something is costing money, then somebody is making money. The only answer is that the money has either left the economy and entered someone else's, or it's just not moving around as much as it was. There is always the possibility that years of buying has caused a drop in demand, and a surplus of goods. However, a drop in demand would be met by a drop in price, and the result would be more buying.
Think of this. The dollar you spend is spent again and again and again. Now, if you decided to hang onto even a little bit more of it than you normally would, the effect is multiplied.
I'm not suggesting that recessions don't have other causes, but they are made worse by people reacting to the situation by changing their normal spending habits. Increased spending can ease a recession. The answer here is not that p**sing your money away is a good thing, it isn't. But maintaining your normal spending habits is helpful, while being unusually tight with your money in the face of a looming recession will only make matters worse. Remember, I'm talking about consumers as a whole, not individuals.
After 9-11, Bush had a very good reason for telling people that spending money was the patriotic thing to do. They were scared to death, and there was a very real possibility that the economy of the United States, and the rest of the world, could have gone into the toilet if people suddenly stopped their usual buying out of fear about the future. Self-fulfilling prophecy. The point was not to make people buy more, but to make sure they kept buying.
Quote from: lester1/2jr on January 18, 2008, 11:34:31 AM
defense spending is wholly out of control as well, it has to be said.
It also has to be said that "common defense" is one of the few Constitutionally mandated responsibilties of the federal government; there are not many.
We can debate "how much," but I sure hope you are not saying we should not have a military just because war itself is evil. As others have pointed out before me, it sometimes is a necessary evil.
You may think the current war is not justified; that's a separate debate, which I don't want to have here. But I am wondering, just out of curiosity, is it your stance that we should NOT have a military? If you DO think we should have a military, what is your idea of a "good" amount of money to spend on running/operating it?
lol no I don't think we should eliminate the military. As you rightly point out the constitution calls for one. but our military budget is infamiously large, larger than all the military budgets in the world combined or something.
We have too many committments. that is all I'm saying.
[quote="andyC]Personal prosperity perhaps, but the bigger picture depends on keeping money circulating, and especially putting it in the hands of the right people, to spread the benefit to the retailers, wholesalers, manufacturers, and all of their investors and employees.[/quote]
I say there is no difference between personal prosperity and national prosperity.
The two are closely linked, with national prosperity simply reflecting the proportion of prosperous people, and how prosperous they are, on average. The difference is that it is an average.
One guy can live like a miser and save every cent above minimal food and rent. He'll build up a sizeable nest egg. But if a whole population did that, it would be disastrous.
When you save money, the people down the line pay for it. If you decide to economize by giving up your morning coffee and donut, that means lost income for the coffee shop, as well as for their suppliers, and eventually for their employees. For one person, it's a tiny amount, but if more people do the same, things get worse. And the ripples keep spreading. And your own savings are not entirely a guarantee of prosperity, as the chain reaction can come all the way back around to you.
If you want a good example of how one person's savings can hurt others, consider how the low prices at, say, Wal-Mart are achieved on the backs of underpaid staff and cheap overseas manufacturing that, in turn, costs jobs at home. People pay less, but somebody else pays the balance.
But back to individual vs. national. Numbers make a huge difference. You can look at individuals, and the results are all over the place. When talking about an economy, you have to look at large groups.
QuoteIf you want a good example of how one person's savings can hurt others, consider how the low prices at, say, Wal-Mart are achieved on the backs of underpaid staff and cheap overseas manufacturing that, in turn, costs jobs at home. People pay less, but somebody else pays the balance.
Primary reason I haven't set foot in one in many years, I order, deal and buy from locals stores, I go in they know me and generally know what I'm there for and if I need something they don't have they'll get it for me.
This keeps money in the community, provides jobs to small business and aid the local economy and tax base over having my money end up in Bentonville, Arkansas before I car to the truck.
I'm pro wal mart. the fact is, alot of people can't afford to go anywhere else. they have pc's for like 300 dollars or something.
andyc- no one just saves their money forever. I saw a thing on tv today about a guy who became a millionaire making 11 dollars an hour. he made smart investments, didn't expect to go in and make a killing right away, and in the end I think he gave a million dollars each to two schools or something.
would we as a society, or even our economy, be better off if he had just saved up for no more than a month at a time and bought TV's and Ipod's and stuff?
saving and investment is bound to lead to higher quality spending
Quote from: ulthar on January 18, 2008, 12:05:25 AM
Quote from: Killer Bees on January 17, 2008, 11:25:10 PM
I'd just like to say this about the recession/sub-prime market woes.
I'm not much of a consumer. And I have modest savings. I've never had trouble getting a job, no matter what the economy. I believe saving money for a rainy day is an excellent idea and if more people lived within their means, there wouldn't be a need for a sub-prime housing market.
It's just madness to give credit to those people who can't afford it. Did the financial institutions really not see this coming? If you can't afford a mortgage, charging people higher interest rates to make up for it won't make a lick of difference and just gets everyone into trouble.
I understand the need for people to have their own homes. But, for corn's sake, people, at least buy when you can afford it. And if you can't, there's nothing wrong with renting. The trouble is, when the US goes into recession, it affects the whole world. Fortunately for us, our economy is quite strong so we shouldn't be affected too badly. But it means everything will get more expensive. And that extra money you pay for food or rent has to be found somewere. I just feel sorry for those families who have to choose between paying the power bill and eating for the next week.
In this culture of gross materialism and instant gratification, it's no wonder so many people are in debt and struggling. But responsibility for your situation starts with YOU. The government isn't responsible for your smoking/gambling/crack/alcohol habit. Nor is it responsible if you don't put aside a little money every week for your power bill when you choose to go out and buy a $500 handbag like Paris has.
A little more fiscal conservatism by the Mr and Mrs Average Joe would go a long way to making things better. And the economy wouldn't suffer, because people will always buy stuff. Hell, even I love my DVDs, books, CDs, cosmetics, hobbies. But I don't pay for them at the expense of putting a roof over my head or food on the table for me and my son.
Here endeth the rant.
Very well said. Karma for you.
Karma from me too. My family lived off my single paycheck until my kids were well into their teens because my wife chose to stay at home and raise our kids. We were successful because we live within our means and I was still able to put money into retirement. I used to see people who I knew couldn't be making more than me, but they had lots of stuff we didn't but I wasn't in hock up to my neck like they were.
A side effect of this was that my kids know how to manage their money.
I think Killer Bees' comment brings up a point that gets overlooked in conversations like this: We're not just talking about spending, we're talking about debt and deficit spending. We're not really talking about a sustainable economy if we're talking about spending our way to prosperity IF Joe Average is carrying his weight in consumer debt. When we talk about "money has to go somewhere" in either consumption or investment, we're assuming a finite amount of buying power. Easy credit "creates" the illusion of extra buying power, or more money in the system, but Americans singly and in the aggregate are racking up more debt than there is money to pay it.
So before we talking about the relative virtues of spending vs. saving/investment, we need to realize that we're talking about relatively small bracket of the middle class on down who "own" their own money.
QuoteI'm pro wal mart. the fact is, alot of people can't afford to go anywhere else. they have pc's for like 300 dollars or something.
You can buy Dell refurbs for the same price, people don't shop around. Wal-Mart didn't get to have the riches family of billionaires ever by saving you money. They are geared to sell you tons of crap you don't need, we saved money by not going to Wal-Mart. But that's is another thread.
Quote
We're not just talking about spending, we're talking about debt and deficit spending.
Yes people should live within there means, trouble is many don't they'd rather go into debt than save and wait until they can pay cash for it. It's the ole "I want it now." mentality.
Quote from: lester1/2jr on January 18, 2008, 10:26:18 AM
We have a 3 TRILLION dollar budget. There's NOTHING we can cut for the sake of our country?
Taxes and the size of government, but neither side seems willing to do that. :(
Quote from: lester1/2jr on January 19, 2008, 06:07:19 PM
I'm pro wal mart. the fact is, alot of people can't afford to go anywhere else. they have pc's for like 300 dollars or something.
andyc- no one just saves their money forever. I saw a thing on tv today about a guy who became a millionaire making 11 dollars an hour. he made smart investments, didn't expect to go in and make a killing right away, and in the end I think he gave a million dollars each to two schools or something.
would we as a society, or even our economy, be better off if he had just saved up for no more than a month at a time and bought TV's and Ipod's and stuff?
saving and investment is bound to lead to higher quality spending
You're still talking in individual terms. One guy can save a lot of money, but the economy depends on the far-reaching effects of what many people do. And yes, some uses of money yield more benefits than others. However, buying consumer goods is not a complete waste either. Again, you're thinking individually. Buying an ipod is not necessarily a smart purchase for the individual, and only one person will benefit from its use. But the money spent will still find its way into the hands of the retailer who sold it to you, the company that shipped it, the wholesaler, the marketers, the manufacturer and the component manufacturers, right back to the people who produced the raw materials. And at all stages are people who will have the same choices with their money.
As for being pro-Wal Mart, that's pretty short-sighted. The original post mentions blaming an umbrella for rain. In this case, you're doing the opposite, giving credit to the cause of the problem. Many people can't afford to shop anywhere else. Why? Could it be because of large multinational corporations with overworked, underpaid employees, killing independent businesses with predatory pricing, selling cheap overseas merchandise and outsourcing many of their functions to whichever place is cheapest?
Somebody pays the balance. Quite a few of those people who can't afford to shop elsewhere are paying, I can tell you that.
Of course, economically speaking, I don't think the problem is so much whether people save or spend their money (investing is as good as spending), but when a lot of people suddenly change what they're doing with their money, such as cutting back their spending or selling off their stocks or not buying a house or car. Somebody else invested money to meet the anticipated demand, and they lose.
I read somewhere what would happen if everybody in North America decided not to spend any money for a single day. Billions would be lost from the economy. The original issue here is whether tight-fisted consumers can worsen a recession, and they most certainly can.
so do you think we should all go out and buy Ipods so there won't be a recession?
QuoteSomebody pays the balance. Quite a few of those people who can't afford to shop elsewhere are paying, I can tell you that.
They can afford to shop else were they just choose not too, I've found many, many products cheaper at mom and pop shop. Wal-Mart as convinced nearly every one that they are cheaper with price point marketing (PPM). What's PPM? Wal-Mart buts a big pallet out of basic 'widgets' for some cheap rolling back the price. But the PPM product lacks the features you want, but your in luck they've surrounded it with higher end, higher priced products that have those features. BUT more often than not the surrounding product is higher priced than what you can get from some other store. So you've been a victim of marketing and you feel you've spent less and in fact you paid more.
But wait there's MORE!
They are also geared to impulse shopping and psychological marketing by giving you a HUGE cart so that it never looks full. They never use standardized pricing, 4.88, 7.76 etc. as opposed to 4.99, 7.95. Why it looks more like a wholesale price and it's not. Also the ROLLING BACK THE PRICES bit ... marketing, that NEW lower price is higher than it was the week before. Wal-Mart will take a product that it say, 6.89 jack it up to 9.88 and then lower it to 8.44 and put a big Rolling back the prices on it and in fact you are paying more. I won't even get into predatory pricing, depress local and national wages, they yet you the taxpayer get to subsidize their employees at the rate of roughly $420,750 a year for every 200-employee store by paying for low-income services. The list goes on and on and on ...
Ask yourself this, how often to you spend over a $100.00 on a trip there and wonder what the hell did you buy?
Just in case you are bored ...
http://www.intellectualpoison.com/WalMartisPureEvil.html (http://www.intellectualpoison.com/WalMartisPureEvil.html)
http://www.walmartmovie.com/ (http://www.walmartmovie.com/)
http://www.fastcompany.com/magazine/77/walmart.html (http://www.fastcompany.com/magazine/77/walmart.html)
and for a counter view to brother cheezeflix (http://www.mises.org/story/2828)
seriously, Target is "cool"? is there minimum wage somehow less exploitative?
Quote from: lester1/2jr on January 20, 2008, 10:27:52 AM
so do you think we should all go out and buy Ipods so there won't be a recession?
How did you end up drawing that conclusion from anything I just said?
Thanks to everyone who gave me karma. You guys are great :cheers:
andy- I just don't agree with this idea that we should try and say to people don't save, or don't buy stuff for the cheapest you possibly can. economiuc freedom means doing what you want. I think people shoud do what they want!!
Quote from: lester1/2jr on January 21, 2008, 09:34:22 AM
andy- I just don't agree with this idea that we should try and say to people don't save, or don't buy stuff for the cheapest you possibly can. economiuc freedom means doing what you want. I think people shoud do what they want!!
You not seeing the forest for the trees, no one is saying don't save, no one is saying don't buy the cheapest. (If you think Wal-Mart is the cheapest, think again.) What is being said that to stop all personal spending which is impossible will kill the economy. As the song goes 'Money makes the world go around'.
People can do what they want with their money. But they don't do it in isolation. It affects other people, and the combined effects influence the economy. Not making a value judgement, just explaining how it works.
Just a few thoughts about consumer spending: I used to work on the Consumer Attitude Survey, in which 500 people a month are cold-called and asked how they think the economy will be going in the next year to five years, and how that will influence their spending. It turns out that their predictions are so accurate that the survey's results were added to the Index of Leading Economic Indicators. Not that the American public is all that psychic -- they simply change their spending habits based on their beliefs about the economy. If they expect times to be bad and tighten their fists, that does slow down the economy. If they expect things to be good and spend like millionaires, it stimulates the economy.
So the thesis statement of that article is probably right. But there's a lot more to it than cosumer spending.
Quote from: CheezeFlixz on January 21, 2008, 10:29:30 AM
Quote from: lester1/2jr on January 21, 2008, 09:34:22 AM
andy- I just don't agree with this idea that we should try and say to people don't save, or don't buy stuff for the cheapest you possibly can. economiuc freedom means doing what you want. I think people shoud do what they want!!
You not seeing the forest for the trees, no one is saying don't save, no one is saying don't buy the cheapest. (If you think Wal-Mart is the cheapest, think again.) What is being said that to stop all personal spending which is impossible will kill the economy. As the song goes 'Money makes the world go around'.
Author Paco Underhill says that if people only bought what they needed to survive, the economy would collapse overnight. That won't happen because people will always buy not only what they need, but what they want and this emotional buying response will always be in force and will always be strong.
Those advocates of Buy Nothing Day have their hearts in the right place. But what they are doing is cautioning against reckless spending and unnecessary consumption. Even if everyone was more fiscally responsible, you would always get a section of the population who do what they want financially anyway.
Trouble is greed gets in the way. Everyone wants to be rich and have lots of things. But what they want is to be happy, so they think that material goods will do that and the sad truth is, things never make you happy. But they keep buying. It's a vicious circle.
the author is not some communist or something. he is well intuned to the economy. It is a given that american is a consumer society and we shuold be. We shuoldn't or don't need to be a consumer society on steroids
fishasaurus- that is interesting. i think the problem is when people look at less consumer spending and say "well we just need to have more spending " but don't look at the REASONS for the slowdown. it's not because they are brainwashed by left wing media or there is a rumor out there that there is going to be another great depression. "perception" implies that there is something tangible being detected.