Funny
how, back in 1929, we had a black Thursday and then a Black Friday as
the market crashed, plunging the country into a depression. Now we have
every retailer in every mall in America on their knees praying for a
prosperous black Friday the day after Thanksgiving.
If
you read this argument before, it's because I have been making it since
2007, year in and year out. That's on account of the reality that our
economy is driven more by consumption than production, and most
consuming takes place during the holidays.
So once again we are being asked to join a global ritual even if we are broke.
Get
in gear people, and get your wallets back to the mall: do your duty for
Santa and Wall Street. It will be difficult for the economic recovery
to make much headway without a pick-up in consumer spending as it
accounts for two-thirds of the economy.
Here's
the scenario as this Thanksgiving rolls around. Once again the economy
is in deep doo-doo with unemployment high, millions on food stamps, and
millions more facing foreclosures. The big banks seem to have
"recovered;" most Americans haven't.
Nevertheless,
Christmas is for the shopping, a time to feign merriment through gift
gifting, to spend what you don't have. And the process will be
"stimulated" and we will be guilted and mesemerized in our own homes by a
non-stop electronic sell-a-thon as TV advertising goes into hyperspeed.
Local
TV channels will soon start hyping the "action" at the local malls
announcing plans to "go live" without mentioning that they are doing it
to attract more advertising, or as part of the deal they already have
with sponsors to add news time to ad time.
If
the past is any guide, we will be told how packed the parking lots
are--and they will, thanks to the hype, probably be packed. Part of the
reason is the deep discounting and special sales -what are called "lost
leaders" to get customers into the store even if you have to bribe them
to come. All night sales are the latest marketing shtick.
What
happened last year was that most consumers only bought the sales items
and left most of the other goods untouched. No wonder, a number of malls
are now in foreclosure.
At
the same time, all we hear publically from business is optimism,
including the use of the term "surge" that has been used so deceptively
in Iraq and Afghanistan.
Example news boilerplate: "Some e-retailers expect a strong surge in Thanksgiving weekend sales", "Having
already unleashed a flurry of deals, discounts and other incentives,
web retailers are looking for strong sales the day after Thanksgiving,
one of the busiest online shopping days of the year. And unlike last
year, when the tough economy reined in spending, many retailers believe
this Friday after Thanksgiving, often referred to as Black Friday, will
deliver significantly higher web sales."
Higher
until the credit card bills come and the returns start when folks
realize they can't afford what they bought. Almost every year, after
Christmas, the credit card companies report sales described at the time
as "historic" became in the end "disappointing" or didn't "didn't live
up to expectations."
But
consumption requires people with money to spend or with credit cards
that are not tapped out. This is no longer a sure thing especially as
unemployment benefits run out and discretionary income freezes.
Quiet
as its kept, banks are in many cases as tapped out as their customers.
And at long last, some are being probed for criminal conduct. Reuters
reports:
"The Federal Deposit Insurance Corp (FDIC) is conducting about
50 criminal investigations at U.S. banks that have failed since the
start of the financial crisis, the Wall Street Journal said.
The
FDIC, which is responsible for dealing with bank failures, is probing
former executives, directors and employees at failed U.S. banks and is
taking efforts to punish alleged recklessness, fraud and other criminal
behavior, the Journal said."
This
is just the tip of the iceberg. Paul Farrell offers 15 reasons on
Marketwatch about how the people behind the economic collapse continue
to get away with it.
Here are 5 of them.
1. Gross denial of any moral damage caused by their rampant greed
2. Narcissistic egomaniacs with secret 'God complexes'. Today,
all of Wall Street is dual diagnosed: They're morally blind money-addicts who believe they're "God's chosen." AA would say: They haven't
"bottomed," won't recover from their disease till a disaster hits, with
another market meltdown and the "Great Depression 2." Then maybe they'll
"quit playing God."
3. Paranoid obsessives about secrecy, guilt and non-disclosure
4. Power-hungry need to control government using Trojan Horses
5. Borderline personalities who regularly ignore conflicts of interest"
He
goes on with an indictment that clearly suggests nothing has really
changed when it comes to the folks who are making money and sucking in
bonuses when others aren't.
(This
is the reason I and others have launched a "Jailout campaign" with a
national petition calling for more prosecutions and incarcerations of
wrong doers. See newsdissector.com/blog.)
So
we go back to square one: A distorted and troubled economy. A
population addicted to buying things. A manipulated media. And, many
signs of deeper trouble ahead as wars are escalated and extended while
the Congress is paralyzed along parochial and partisan lines.
The
resurgent Republicans will not be ringing jingle bells but playing
Scrooge this year. Many consumers will not be able to shop until they
drop this year because they have already dropped to new lows.
Unfortunately,
a feast followed by days at the mall will not change any of this, and
remember, if you will, the price our first Americans paid so that we
could stuff ourselves on the road to national obesity.
Happy Thanksgiving.