A ‘Green’ Christmas Won’t Save the Economy

(This one has drawn some interesting comments — nearly two dozen of them as of Monday evening — so I’m letting it run for a second day. RA)

It’s come down to this:  Economically speaking, our very survival depends on how many flat-screen TVs, major appliances, sweaters and pearl necklaces are sold by Christmas.  That, at least, is the apparent view of the mainstream media, whose obsessive focus on signs of a “green” Christmas has more than the usual whiff of desperation about it this year. Do they not trust the simple fact that the stock market has been rallying for nearly 21 months, or that the Dow Industrial Average is currently trading within 19 percent of its all-time high?  If those are not signs of a robust economic recovery, then what would be?  We ask this question facetiously, of course, since no one outside of the nation’s newsrooms could possibly believe that Christmas sales, no matter how strong they appear, are in any way indicative of economic recovery. And no economist other than Keynes (the leftist quack!) or his misguided disciples could possibly mistake a seasonal surge in charge-card consumerism for the growth in savings and capital investment that alone can restore America’s economy to health.

Still, old habits die hard, and so we weren’t surprised to see this headline above an AP story about “Super Saturday” featured on Bloomberg:  “Shoppers Crowd the Malls in Christmas Countdown”. The article went on to report that shoppers came out in “droves on the last weekend before Christmas, tackling their gift lists and driving traffic up at malls across the country.”  On what evidence?  The reporter, one Mae Anderson, apparently checked in with Mall of America’s public relations office to substantiate her presumably pre-ordained conclusion. One suspects that mall parking lots would have to have been virtually empty for Ms. Anderson to have concluded that this year’s yuletide shopping scene was less than robust.  As it happened, we were at the mall yesterday ourselves, buying a $40 set of skateboard wheels for our son. The wheels were manufactured in, of all places, the USA, but this is hardly the kind of merchandise whose sale, even ten sets apiece to each and every American, will help bring unemployment down and get the factories humming again.  Still, there was our car, helping to fill the Flatirons parking lot. And there we were, two shoppers doing our bit to further the appearance of a throng. Perhaps the AP should be conducting exit polls, checking bags to see whether it is pearl necklaces and cashmere scarves that shoppers are bringing home rather than bric-a-brac?

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  • david December 22, 2010, 4:46 am

    steve,do your homework.Do you have artwork or antiques or diamonds or any valueables.Do you freely concede your life away.maybe you hide it or store it somewhere and buy it now with cash so they cant track it.Buy miners in an investment account.More millionaires created in the great depression than ever.Don’t let your heart be downtrodden Steve.My wife divorced me after 16 years and I have 5 kids ranging from 9 to 20.I live in my mom and dads basement and my dad almost died on october 19.He lived.What a blessing.Do what you can control….Hows that Steve.!!!!

  • Anthony F December 21, 2010, 11:40 pm

    This is some information following up on China Real Estate debate….

    The ghost towns of China: Amazing satellite images show cities meant to be home to millions lying deserted

    http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html

  • roger erickson December 21, 2010, 5:59 am

    There remains a LOT of uncertainty in gold mkts. It’s best to know & understand ALL of the operations before becoming overconfident about predicting kinetics.

    “Soros Gold Bubble at $1,384 Has Miners Push Every Button in Tale of Tears”
    http://www.bloomberg.com/news/2010-12-20/soros-gold-bubble-at-1-375-has-miners-push-every-button-in-tale-of-tears.html

  • david December 21, 2010, 5:33 am

    Cam,ill tell you what to do my boy.Worry about only what you can control and even then don’t worry.Pray.Finally buy lots and lots of physical silver cause when this global ponzi scheme comes home to roost you will be on the right side of the greatest wealth transfer of fiat curreny (have nots ) to real value precious metals (haves) in the history of the world and a global reset will occur and things will become better,truer and simpler.

    • Steve December 21, 2010, 8:35 am

      David, bring home lots of silver. That way you will have something to give when they come to take. They will come and take it if they know you have it. This is all so easy to talk about until the rubber hits the road.

  • Martin Snell December 21, 2010, 3:30 am

    Of course people are shopping, and why not?

    Every single day, on average, the US government borrows and spends about $4 billion dollars. That is more than 4 times what US WalMart sales are each day! So sure, people are buying, but much of the money they are spending comes from debt put indirectly on the national credit card.

    The question should be with all this stimulus why are we not seeing good growth in consumer spending (not the .1% and .2% increases we see). Retail sales are about $350 billion a month, government borrowing is about $120 billion, so a .5% increase in sales could come from a 1.5% increase in deficit spending (I know that that is not technically precise, but the idea is to get an idea of scale.) The increases being reported are mere rounding errors.

    • Steve December 21, 2010, 8:36 am

      Nice job Martin.

  • TahoeBilly December 20, 2010, 11:59 pm

    Rick,

    Skateboard wheels are a work of homespun work of art, not bric-a-brac!

    • Rick Ackerman December 21, 2010, 8:49 pm

      You’re right, TB, but I’m so happy my son has settled on frequent replacements of generic $40 wheels instead of the $60 kind with Death’s Head designs, Bam Margera’s autograph and such.

  • Nowhuffo December 20, 2010, 11:41 pm

    Middle Ohio. Have been to a local national dept store twice in the last 2 weeks. Very busy. Lots of stuff in baskets, long lines w/all registers open. UPS is using rental vans to deliver. Saw 2 today on my street. I tend to agree with a lot of what I read here but slow sales is not one of them. At least not in this area compared to last year.

    • mario cavolo December 21, 2010, 1:33 pm

      ….I appreciate this comment N because it indicates a theme I believe in and believe is backed by legitimate stats which is that we have a divide, not that the whole pie has gone to hell. Its more of a societal shift problem rather than a pure economic problem. I keep saying it.. 100 million are ruined, the other 150 million, better than ever and will somehow move forward. That is NOT to say that all the evil goings on in the financial system are not reason for worry and anger and frustration, I am NOT saying that! I am saying that there is a new world of “haves” and for the haves in the new world all is well…and apparently there’s a cluster of ’em with you in middle Ohio 🙂

      Cheers, Mario

    • redwilldanaher December 22, 2010, 5:35 am

      Once again Mario, I respectfully but strongly disagree with you. All isn’t well for the “haves” in the USA that seem to be throwing around a little more disposable income and opening up the credit faucets again. Acquiring more consumer goods (on significant sale pricing) when measured against abysmal shopping seasons of 2008 and 2009 isn’t anything to rejoice over. As many have noted, most of the important things are rising dramatically in price (save for post insane bubble housing), while the prices of disposable cr@p is falling. What a panacea? Every real measure of this society economic or otherwise is in WTC 7 freefall from where I sit. Having a little extra change to live large for a few moments when your society/culture is on the precipice isn’t something I wish to “have”. All of this insanity is literally held together by fantasy, collective fantasy. There’s nothing to any of it. It’s completely detached from any semblance of reality. I’ve noted several times here over the past few years that new “highs” etc. wouldn’t surprise me because I’ve seen the cartel operate round after round for nearly 20 years and I’ve followed it pretty closely. These lunatics have it set up so they’re able to confiscate our incomes to buy stocks after fleecing us but before taking over the Internet to make it more “fair” for us. There’s an enormous apparatus aligned us against us to maintain and perpetuate pure fantasy. I ask, Do you think these people are benevolent? Do you think that these engineers will hesitate for longer than a nanosecond to induce another plunge when they see fit? (When they’re certain the system will handle it.) The “haves”, have nothing that is permanent. They’re in Club Silencio and Rebekah Del Rio will walk onstage when they aren’t expecting it and that’s when we’ll hear the saddest rendition of “Llorando” of our lifetimes.

  • abprosper December 20, 2010, 9:25 pm

    Of course retail figures will be exaggerated. The media which is paid by retail advertisement and exists to manufacture consent and stability has to. The truth would cause serious chaos.

    As for those saying we need more better jobs making stuff, preach on but with automation and computers, even if we could recapture 100% of lost manufacturing, its only a delaying action.

    We are going to need to find new means by which people can support themselves as pretty much every job will be done by machines or streamlined to eliminate middlemen

    Frankly speaking, 200 million workers cannot all be “Value added knowledge workers”

    • Steve December 21, 2010, 8:32 am

      Go back to taxing corporations, not individuals. It worked before, it can work again.

    • Larry D December 21, 2010, 5:30 pm

      Steve, you don’t prepare taxes for a living, do you?

    • VegasBob December 21, 2010, 6:27 pm

      abprosper noted: Frankly speaking, 200 million workers cannot all be “Value added knowledge workers”

      In this technological age, we have reached the point where adding workers causes negative productivity. For proof, look at just about every governmental unit in the United States. For more proof, look at corporate profits, which do not seem to be suffering despite millions of layoffs.

      &&&&&

      A brilliant insight, Bob. Let’s hope there’s an influential book out on this soon. RA

    • Benjamin December 21, 2010, 10:24 pm

      @abprosper and VegasBob…

      One thing that really surprises me in this day and age is not that we can’t seem to employ more and more people. It’s that we insist on employing them full time.
      More jobs need to be split into part time. For many obvious reasons, and many non-obvious ones, though, this is a “laughable solution”.

      One of those reasons is that of health care benefits. These things are such nuisance! We don’t NEED insurance, nor to tax circulating money to pay for national programs. It only increases the demand for more them, being a massive strain on capital as it is.
      Anyway, they block the part-time splitting because people don’t want to lose their benefits, have them reduced, or have to pay for them by making less money…

      So this blocks a much-need shift, so we keep losing, so we keep fighting to hold rotting scraps of malinvestment… More debt, more inefficiency, less real returns…

      What gets me is that people also tend to complain about not having enough time in their daily lives, yet they insist on full-time employment. Go figure!

    • Rich December 22, 2010, 1:25 am

      @Steve et al
      “Go back to taxing corporations, not individuals. It worked before, it can work again.”
      A corporation is not a person, but now enjoys better Constitutional rights than those of natural born persons taken away by corporations.
      Corporations paid just 11% of income taxes in 2010, while individuals paid the rest.
      http://en.wikipedia.org/wiki/2010_United_States_federal_budget
      Corporations control the legislative process that creates red tape and taxes for the rest of us.
      GS received $13 B from taxpayer bailouts after lobbying $31 M, an ROI of 419 times. http://www.huffingtonpost.com/bill-donius/goldmans-great-return-on_b_549900.html
      Foundations and other non-profits, many funded by corporations, avoid taxes and lobby heavily.
      Studies found returns of 22,000% and more on special interest lobbying for lower corporate taxes and tax holidays.
      http://sunlightfoundation.com/blog/2009/04/09/return-on-lobbying-investment-22000/
      According to 2010 10-K financial statements, GE paid no taxes on revenues of $157 B. Yes Virginia there is a GE Foundation and GE enjoys media monopoly shaping American opinions from dawn to midnight.
      Our founding ancestors feared corporations and trusts would become immortals above the law, so they considered them unconstitutional until crooked Courts ruled otherwise.
      http://www.corporatepolicy.org/issues/constit.htm
      The private Federal Reserve pays 6% dividends to member bank shareholders plus significant excess profits after expenses to the Treasury, but paid no income taxes on profit margins of 1180%.
      http://www.federalreserve.gov/monetarypolicy/files/BSTcombinedfinstmt2009.pdf
      If we taxed such corporations, foundations and tax-exempts at 28 basis points per transaction, allowing our law to pierce the ethical veil, we might correct warnings generations ago that immortal immoral corporations and trusts would destroy America’s freedom like King George.
      After all, the Kings taxes were less than 3%.
      Ours are more than 39.5%.
      Time for the APTT 28 basis point automatic transparent transaction tax replacing all other taxes, with Ron Paul auditing and eliminating the Fed to return to prosperity for all?
      http://www.apttax.com/

  • Rich December 20, 2010, 9:20 pm

    Bond disintermediation into dollars and stocks anyone?

  • nonplused December 20, 2010, 8:25 pm

    Up here in Canada everything is on sale, and it’s still before Christmas. I was in the Best Buy looking at a touch screen computer, and dude tells me “today only” if I buy a touch screen computer I get a laptop and a printer thrown in free! Sadly I already have more computers than I can shake a stick at.

    Clothing stores are doing 2 for 1, departments stores are 30% off, etc. You’d expect this sort of thing boxing week but not 6 days before Christmas.

  • indeed December 20, 2010, 7:18 pm

    Buy only what you can afford it. Buy only American, if you can afford it. Keep away from the bankster loans (this includes credit card loans). Turn down “help” from the state, if you can get by without it.

    I don’t blame the frenzied shoppers looking for a “deal”. Just make sure it’s a deal and that it’s worth risking your life for. If you haven’t figured it out the system has failed and has been replaced by a police state, no matter what label you want to paste on it. Thousands of comments on the internet about the cutted “benefits”, which 40% of us are living on. Disabled people with no escape from abject poverty. Keep the rose colored glasses on and you’re dead. Take care of yourself first, then help someone else. And I mean HELP, not giving to fraudulent “nonprofit”. Help by sharing not taking.

    Keep the “Keynesian”, “socialist”, “democratic”, “republican”, etc., etc., etc. comments to yourself. We’re in an economic holocaust. Greed, waste and fraud doesn’t cut it anymore. We NEED to get the money to the bottom by VIABLE jobs – no question.

  • C.C. December 20, 2010, 6:38 pm

    ‘Consumer’ as an adjective to describe patrons of retail businesses, has been around since the 80’s, if I am not mistaken. As well, ‘Consumer Spending’ has been around as a metric/barometer of economic ‘health’ for in or about the same amount of time, correct me if I’m wrong.

    I remember my old man hated that word – and being referred to as one. It sounded funny to me as well, that news reports would come across so ‘concerned’ about whether or not ‘consumer spending’ had improved over the last reporting cycle. It didn’t make sense back then – for how was it that spending discretionary income – or savings, could be such an important metric, instead of a report on what we built or exported…?

    It makes sense if you think it over: A ‘consumer’ based economy would be subject to the emotions, whims and (sentiments?) of the ‘consumer’ himself, so the ‘action’ in that market would be expectedly neurotic, no?

    Is this entire facade of an ‘economy’, not neurotic?

    I guess building and exporting stuff became too damned boring…

    • Cam Fitzgerald December 21, 2010, 5:17 am

      Defining buying as a source of wealth is one of the biggest lies we have ever been told as a society. I hardly have words to describe my disgust over how the calculations of all the important measurements of our time are summed up.

      Everything from the estimates of inflation rates to measurements of unemployment (both truthful and fabricated), gross domestic earnings, trade and GDP numbers are suspect now. Nothing is the truth anymore and no credible economist after two martinis would stand behind this charade of creative accounting.

      No business in America would ever be allowed to put forward this kind of fabrication and then use it later to calculate it’s taxes and liabilities to government. No government would ever accept it anyway. And that is how you know that the whole system has been rigged and falsified to make ends meet.

      Heck, I could not get this BS past my ex-wife, never mind the IRS. And yet investors buy it up every single day like it is gold itself. Does anyone else know what I am talking about here?

      We are in S*** to our eyeballs based on all the fabrications and manipulated numbers. It frankly makes me sick some days and I do not mean that rhetorically or theoretically.

      I mean I really feel sick about the all the lies and manipulations and it is because I know better and cannot do anything about it I cannot sleep some nights.

      I just don’t know what to do about it anymore.

    • Benjamin December 21, 2010, 10:03 pm

      Cameron: “Does anyone else know what I am talking about here? … I know better and cannot do anything about it… I cannot sleep some nights … I just don’t know what to do about it anymore.”

      I know what you mean, Cameron. I’m getting over that stage myself, so, this being the holiday season and all, allow me to present you a gift of what I’ve learned…

      For all hope to be lost, all hope must be found. It cannot, as it hasn’t, because it all remains to be discovered yet.

      I know, I know… that must all sound like such optimistic drivel. But it’s as far from drivel as one can ever hope to get. I know exactly what I am saying and why I am saying it. Trust me… the answer is right under your nose, just as surely as it was under the nose of your parents, grandparents, and theirs.

      And just as there is a solution so apparent you’ll not believe you ever overlooked it, there’s great ironies that you might not ever seen before.

      What is the true root of all debt? Why do men lie, cheat, and evade?

      The irony is, he does these things mostly to be honest and responsible, to escape the things he has chosen to needlessly impose on himself ever since there was a civilization to speak of. To do the one thing he is really, truly obligated to do: Serve himself, live his own life. Each person is a full, thick blanket in the cold of reality, but each person accepts it as necessary to give away some part of it, in one or both dimensions of it. He stretches himself thin and/or sells himself short.

      This he does because from the first day he realized the self, he has not trusted himself to peaceably contribute to the peace. He “must” use his power of decision to serve a constant, immutable obligation of no clear purpose, something that has nothing at all to do with him. And being a mysterious yet insecapable burden, again, he will come up short and then try to find all manner of ineffective ways make up the difference.

      But pennies from Heaven can only come from one place: From the hand that gives them in FULL liberty, for reasons that one figures they should be given. So even if all lies were to cease in all ledgers and all ledgers were transparent for all to see… Not being defined and written by your own free hand makes them useless burdens to you, and so you’ll do what man has always done: create debts in order to escape the weight of burdens you have no use for.

      So let me ask you… If you were to walk into the building serving the public as a Mint, and saw that a C$ (you’re Canadian, right?) was 1/2 ounce of silver… Would you coin any weight and freely lend it your government for any reason?

      First, you need to know how much you have. Second, you must know the purpose as to why you’d coin any more weight. Why do it for the heck of it, right? Besides, that’s destructive of your own wealth as well as that of others, and to do without a clear reason in mind is… Stupid!

      Those are but two questions Cameron Fitzgerald would consider. And maybe that is all he would consider. Then again, Cam might be an odd-ball that figures that somehow the number of rings around Saturn must matter to his own personal decision to coin and lend for the pupose of defining the abstract from the concrete (currency weight) as well as paying for the government he has requested for some reason. And that’s fine. Cameron is entitled to decided these things according to what he thinks is important. No need to tie his hands and throw him into a prison where his power is taken away. And even if he does the stupid thing, without reason, he can hardly cause me much in the way of long-term harm.

      Cameron is never my enemy, so I have no reasons to become political. Nor is he a thief that forces me to borrow to make up differences he might cause me. Any loss he causes me will be erased when I decide NOT to coin anything, to lower the weight of the national currency.

      So all, no matter what they do or do not do, end up contributing peaceably to the peace. No need to obligate or deceive or say F it and let it all crash and burn. And since this has never been done, not once (that I am aware of and still searching history for), it IS all hope… Not lost, as it remains to be discovered by each and everyone of us.

    • redwilldanaher December 21, 2010, 11:13 pm

      Cam, I want to offer support to your comments. Yes, I feel physically ill every day knowing that I and my children live in this Matrix that’s whatever TPTB want it to be on their demand. It literally is sickening and that’s why I take issue with comments here and abroad that treat this situation all too lightly from where I sit. These psychopaths just took another step towards complete Internet control as I write. Protests all over the world except for in the USSA. I too am at a loss for words. To compare now to when I was a boy, “disgraceful” etc., nothing fits. It’s combination of disgrace and revulsion. It leaves me feeling nauseous, it’s a sickening feeling that emerges when I think about it for too long. I want out. I want complete insulation at worst. But realistically, how are you going to get there? Even if you did, how confident can you be that you’d be left alone?

    • Rich December 22, 2010, 12:07 am

      Meanwhile, retail up 145% since March 09 and targeting another +97%…
      http://stockcharts.com/charts/gallery.html?XLY

  • ginger60 December 20, 2010, 4:26 pm

    It’s all very well to kick poor old Maynard around, but I believe he did say Gov”t should take up the slack in a downturn, BUT should save and set aside in good times.
    Well not an exact translation but you get the idea. and when has this ever happened?

    • Rick December 20, 2010, 5:46 pm

      The very idea that government spending could be productive under ANY circumstances qualifies Keynes as a leftist quack for all time.

    • Benjamin December 20, 2010, 7:23 pm

      He knew this would happen, and didn’t give a lick about the legacy he left behind. Were he alive, to feel every kick.

      Anyway, I’m curious as to why the government is entitled to even have pennies to save (especially seeing as how they don’t even know the difference between good times and bad, and any tax rate can be at odds, at any time, with changing conditions).

      How does one even determine how many pennies they should have? For how long should they have them? And what if they decide to just keep it all saved away for long periods of time, so as to end any other kind of monetary standard other than fiat?

      No wonder Keynes would’ve said. They simply don’t have a right or entitlement to it, and would find ways to be abusive, even through the seeming innocence and virtue of saving.

    • roger erickson December 21, 2010, 12:03 am

      “The very idea that government spending could be productive under ANY circumstances qualifies Keynes as a leftist quack for all time.”

      So 1776 wasn’t productive? Nor anything up through & including WWII?

      Gov spending simply equals group effort, which generates return on coordination … to the extent it is managed well.

      Trying to refute return-on-coordination is spitting into the wind of industrial statistics, nation formation, military operations, social species, biological evolution & the physics of reverse-entropy. Must be the eggnog talking?

      &&&&&

      Perhaps I spoke impulsively. In Keynes’ defense, one could cite the invention of Tang, which we got from the Apollo project. Even so, whatever government spending has achieved, it has run up unfathomable quantities of debt in the process. Isn’t this because government spending adds nothing, nada, zero, zilch to productivity? RA

    • Steve December 21, 2010, 8:28 am

      Biological Evolution is digression. No one in government has the mind of the worst of the Framers

  • John Jay December 20, 2010, 3:27 pm

    The Federal governments master plan for our economy hasn’t changed since the days of “Let’s all hold hands and buy an SUV” which was right after 9/11 I believe.
    Now it seems the local governments are beginning to implode from bloated payrolls and unfunded pension liabilities.
    Just like the housing bubble, the government bubble can be broken down to a simple thought problem.
    Can all that accumulation of debt and pension obligations ever be serviced?
    The answer is no.
    On a lighter Merry Christmas note, here is a link to webcams at Glacier National Park with some very lovely
    winterscapes you can look at, once the sun comes up there today!
    http://www.nps.gov/glac/photosmultimedia/webcams.htm
    It also has a link to other National Park webcams.

  • Nitram December 20, 2010, 2:44 pm
    • Benjamin December 20, 2010, 3:59 pm

      Yep. Literally, one must get into stocks (shackles, ie), stay in stocks, and for goodness sake… stop buying anything else! Either that, or things tighten and no one has any money to buy anything, which means they have to take on debt to get anything done. Or just go without. This is why I now laugh at the so-called differences between prosperity and austerity. It’s all just a thin half-blanket in the cold; just can’t cover all it needs to!

  • Benjamin December 20, 2010, 2:03 pm

    Knowing the quacky economists and brain-dead media, they’re probably counting utility bills and groceries as “Christmas sales”. I mean, what kind of Christmas would it be without tree lights and the dinner, eh? And don’t forget, our money being based in fiction, that means fictitious gifts count too. By that I mean, this being the eighth day and all, the maids a’milkin’, the swans a’swimmin’, the geese a’layin, the rings a’bling blinging… and all that other stuff. Business be lookin’ FANTASTIC!

    Yep. Like the Constitution, they must be free to interpret things as the new and modern day requires…

    • Dennis December 20, 2010, 5:17 pm

      Awesome comment!
      (sad but actually true)Merry Christmas!

    • Other Paul December 20, 2010, 6:05 pm

      “… our money being based in fiction….”

      And until the good little boys and girls stop believing in Santa Fiat, this “Krugman–Keynesian” system of money creation, the mall parking lots will stay full.

    • Rich December 20, 2010, 9:16 pm

      “they’re probably counting utility bills and groceries as “Christmas sales”…

      as well as gasoline and diesel.

      We did our part with an assembled in America Vizio 42 incher, blu ray and home theatre at half price from Costco demo. Nice pic and sound.

      Anybody want a 500 pound TV?

      Internet holiday sales up +13%, 8% of it inflation.

      9 feet of snow on the slopes mean Tahoe is crowded and booming…

    • Benjamin December 21, 2010, 10:13 pm

      @Dennis… Thanks, I guess. Merry Christmas!

      @Other Paul… Hmm? Empty lots would be better?

      @Rich: I couldn’t give my 500lb TV away, as no one I know had the available manpower to come get it out of the house. How I ever got that thing IN, I’ll never remember. But it’s too heavy for anyone to move now, so I had to say hello to my brand new, very heavy shelf. I mostly store dust on it’s cover… 🙂

  • geo December 20, 2010, 2:01 pm

    I sell electronics online and this xmas has been dismal,worse even than last year and last year was horrible! If people buy anything from us it is usually a $10-$20 dollar item.