truth about the recession (don't blame umbrellas for floods)

[Fishasaurus]

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.

[Killer Bees]

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.

[lester1/2jr]

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.