This holiday season was exceptionally moribund this year out here in New York City with empty stores throughout the months including the weekends immediately before Christmas. While this is not surprisingly considering the current economic conditions in this country, what is amazing is that so much of the world's economy is dependent upon these end-of-the-year sales. It seems rather counter intuitive that American people (who overall have a negative savings rate) would open up their wallets when so many companies are laying off their employees, home values (that used to provide liquidity and capital) have plunged and the overall economy is in flux.
Providing companies with federal monies to remain solvent may help the employment rate but companies that continue to innovate and develop new technologies and products will still be exposed to declining sales activities in the market. Wisely, the personal savings rate climbed in November but putting aside more money in savings leaves less for splurging at the mall and retail outlets. The economy depends on people not saving and continuing to consume. The problem is not about "restoring confidence in the buying climate" but people coming to the realization that for years people have spent way more than they have earned on worthless commodities and that 20 percent compound interest on credit card debt does add up. Perhaps a change in buying behavior will lead to further financial turmoil, but perhaps this system of economic functioning needs to change.
"Les bourgeois c'est comme les cochons, Plus ça devient vieux plus ça devient bête" (The Bourgeois are like the pigs, the older they get, the stupider they become)
~Jacques Brel
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