Shop Til You Drop

[QUINNSCOMMENTARY]

Spend It :-6

No matter where you turn the news is not good. It seems as if everyone is looking for the easy way out. The latest are big developers who are worried that the loans coming due on shopping malls, office buildings ands the like will not be able to be renewed and so, they too are looking to the federal government.

Guess what, that ain’t going to do it and in fact, not only will more and more government intervention prolong the mess we are in, the time will come when we will be facing equally disturbing problems of high interest rates, debt and high inflation.

What can you do? Get they heck out there and spend money, and start investing in the stock market. No I am not talking about speculating on GM, but rather periodic investing in a good mutual fund with a long term outlook. The worst thing we can do in times like this is to hunker down and stay gripped by fear. Gasoline prices are down and will stay that way for awhile. Your 401(k) by be off 30% or more, but now is the time to add more money so that you participate in the recovery over the next ten years or so.

Heck, go buy a bargain priced SUV :driving:

If you have a job and are not in imminent danger of losing one, go buy something, even something small. There is such a thing as the ripple effect and now it is all a bad ripple, the trick is to give business, business so that business can give money to its employees and suppliers and they can give money to¦you get the idea.

If nobody is spending money how is your employer going to keep paying you? Although I hesitate to quote Roosevelt, the only thing we have to fear is fear itself. The US was built by people willing to take risk in anticipation of profit (not a dirty word by the way). Now it is time for consumers to take a bit of a risk and start consuming again so that the “profit will be getting us out of a deepening recession. The simple truth is that government cannot buy us out of this. Consumers made up 70% of our economy so without you spending we are not going anywhere.

Bargains abound, grab your piece of the pie while you can (and eh, try not to charge it just yet).

Shop till you drop! (I sure hope my wife is not reading this, she needs no further encouragement).

Even the most pessimistic among us see unemployment going to 10%. Let's hope that does not happen, but if it does 90% of Americans will still be working (and trying to support those who are not), so let's hope you are among the 90% and your chances are better at achieving that goal is you go spend something... preferably American made, but even that is not essential to get things going. :guitarist

[CARLA]

Sorry I won't be shopping till I drop anytime soon. The doom and gloom hit my office last week laid off 4 people and everyone left had to take a 5% cut in pay. :-5 Wages gone, or going down and the price of food keeps going up, when will it end.

[mikeinie]

The reality is that it is not just banks and businesses that have hit the credit crunch wall, it is also the consumers who been over spending and have reduced access to credit as well as high repayments.

It is estimated that in the USA the average credit card has a debt of $5,000. Consumer debt statistics also show that 4.1% of credit card accounts are more than 30 days past due. That does not sound like much in % terms, but in the States where there are 164million credit cards, it means that 6,855,2000 people are behind on their payments and are paying high interest rates on outstanding balances.

With jobs disappearing on a daily basis, and slipping consumer confidence, than add in the disbelief in the banking systems and Wall Street, oh, and the government is not about to start bailing out people who are bankrupt, people will not be spending their way out of this one.

If you have any money and are smart, you would want to increase the % of your income to savings as it is at an all time low of only 2% of income.

Therefore, although it is nice to think that the way out of this disaster is to continue doing what it was that got us here in the first place, shop till you drop, even if you can’t afford it, it will not be the solution.

I am afraid that nature (well economic nature anyway) will need to take its course on this one.

[Kindle]

Now would be a good time to purchase those higher price tag items that you need or will be needing. This would be a win-win situation. Stock would move. Sales would be made. Comsumers could save some money, which they could use to purchase more "needed" items.

I, for one, would love to have a 52-54" flat screen TV. I am not in need of replacing a TV, but if the price was right.................... why I just might do my patriotic duty to help this economy. :yh_rotfl

[qsducks]

I just got back from shopping but went for the bargains. Have to.

[Odie]

on a budget here, no shop till I drop!

[along-for-the-ride]

At this point, Uncle Quinn, Hubby and I are just trying to make sure all our bills are paid.

[Lon]

QUINNSCOMMENTARY;1091357 wrote: Spend It :-6

No matter where you turn the news is not good. It seems as if everyone is looking for the easy way out. The latest are big developers who are worried that the loans coming due on shopping malls, office buildings ands the like will not be able to be renewed and so, they too are looking to the federal government.

Guess what, that ain’t going to do it and in fact, not only will more and more government intervention prolong the mess we are in, the time will come when we will be facing equally disturbing problems of high interest rates, debt and high inflation.

What can you do? Get they heck out there and spend money, and start investing in the stock market. No I am not talking about speculating on GM, but rather periodic investing in a good mutual fund with a long term outlook. The worst thing we can do in times like this is to hunker down and stay gripped by fear. Gasoline prices are down and will stay that way for awhile. Your 401(k) by be off 30% or more, but now is the time to add more money so that you participate in the recovery over the next ten years or so.

Heck, go buy a bargain priced SUV :driving:

If you have a job and are not in imminent danger of losing one, go buy something, even something small. There is such a thing as the ripple effect and now it is all a bad ripple, the trick is to give business, business so that business can give money to its employees and suppliers and they can give money to¦you get the idea.

If nobody is spending money how is your employer going to keep paying you? Although I hesitate to quote Roosevelt, the only thing we have to fear is fear itself. The US was built by people willing to take risk in anticipation of profit (not a dirty word by the way). Now it is time for consumers to take a bit of a risk and start consuming again so that the “profit will be getting us out of a deepening recession. The simple truth is that government cannot buy us out of this. Consumers made up 70% of our economy so without you spending we are not going anywhere.

Bargains abound, grab your piece of the pie while you can (and eh, try not to charge it just yet).

Shop till you drop! (I sure hope my wife is not reading this, she needs no further encouragement).

Even the most pessimistic among us see unemployment going to 10%. Let's hope that does not happen, but if it does 90% of Americans will still be working (and trying to support those who are not), so let's hope you are among the 90% and your chances are better at achieving that goal is you go spend something... preferably American made, but even that is not essential to get things going. :guitarist


I agree with everything in your post, including not charging for goods. however, do you really think there are that many that have the cash and can buy without charging? The problem compounds if charging prevails.

[guppy]

My children will receive a little cash from me this year. i am giving no presents to anybody..this year we will have to do with chili and turkey sandwiches christmas eve and enjoy eachothers company. and you know what...its a relief.

[QUINNSCOMMENTARY]

Lon;1091776 wrote: I agree with everything in your post, including not charging for goods. however, do you really think there are that many that have the cash and can buy without charging? The problem compounds if charging prevails.


Good question, frankly I don't know, but one would hope there are few out there.

[Odie]

IF retailers would just realize, by cutting their items down to 50% off as they do now for Christmas, they still make a huge profit.....but keep those prices all year round.....there would be no recessions!:-5:-5



really, how hard is it?

[Peter Lake]

Odie;1091933 wrote: IF retailers would just realize, by cutting their items down to 50% off as they do now for Christmas, they still make a huge profit.....but keep those prices all year round.....there would be no recessions!:-5:-5



really, how hard is it?


I find the whole credit crunch one large vicious circle. The shops and small business's need people to keep spending to stave off collapse. Yet, the mark up on some goods is criminal and if shops would pass savings onto customers, it would generate more sales. The greedy one's will go under, the one's willing to take a cut in profit to survive will do just that.

In all country's it is the fear of recession that clogs up the recovery. People fear the worst is going to happen and begin to spend less and stash money away. This simply dry's up the economy.

If shops can make these offers at Christmas and cut prices so drastically, it shows the profit they are making during the rest of the year.

[Odie]

Peter Lake;1091952 wrote: I find the whole credit crunch one large vicious circle. The shops and small business's need people to keep spending to stave off collapse. Yet, the mark up on some goods is criminal and if shops would pass savings onto customers, it would generate more sales. The greedy one's will go under, the one's willing to take a cut in profit to survive will do just that.

In all country's it is the fear of recession that clogs up the recovery. People fear the worst is going to happen and begin to spend less and stash money away. This simply dry's up the economy.

If shops can make these offers at Christmas and cut prices so drastically, it shows the profit they are making during the rest of the year.


exactly and their mark-ups are high!

some sales now are 75% off, people here are grabbing the sales up, the retailers can afford this, its been going on since late November and will run well into January, for those oh so wonderful boxing day specials, it was the only way this year to have shoppers buy this Christmas, so why not continue it?

Mid-January is going to hit them hard when prices go back to normal, and to me, its their own damn faults!

then also no one can afford the regular prices to continue making revenue.

[Bryn Mawr]

Peter Lake;1091952 wrote: I find the whole credit crunch one large vicious circle. The shops and small business's need people to keep spending to stave off collapse. Yet, the mark up on some goods is criminal and if shops would pass savings onto customers, it would generate more sales. The greedy one's will go under, the one's willing to take a cut in profit to survive will do just that.

In all country's it is the fear of recession that clogs up the recovery. People fear the worst is going to happen and begin to spend less and stash money away. This simply dry's up the economy.

If shops can make these offers at Christmas and cut prices so drastically, it shows the profit they are making during the rest of the year.


If the economy wasn't 70% consumer driven then we wouldn't be in this position.

Trouble is, we no longer produce anything and it is not sustainable for the only way for one person to make money to be another person spending money.

The only sound basis for an (enclosed) economy is the production of goods - the service industries are just that, servicing those producing the goods. When the service industries are servicing service industries then there are no pit-props holding the economy up. For there to be distribution and retail industries there must be goods to deliver and sell.

[Bryn Mawr]

Odie;1091959 wrote: exactly and their mark-ups are high!

some sales now are 75% off, people here are grabbing the sales up, the retailers can afford this, its been going on since late November and will run well into January, for those oh so wonderful boxing day specials, it was the only way this year to have shoppers buy this Christmas, so why not continue it?

Mid-January is going to hit them hard when prices go back to normal, and to me, its their own damn faults!

then also no one can afford the regular prices to continue making revenue.


The retailers cannot afford this - 75% markoff is the last gasp of a drowning man trying to pull in a little air before going under.

[Galbally]

Bryn is right; you have to look at it this way. In the past couple of decades we have built a global market in capital, goods, and services. But we still have the same independent nation states, and no overarching rules of the complicated markets we have created (and that no one can understand or control to any great extent)

So you have a global economy where goods are services are created and sold across the world, but on a national level you have huge imbalances, with some countries doing much of the production (e.g China), and others most of the consuming (eg The USA).

That situation was OK as long as the structure held together; but its been blown apart now, and there is no point in American consumers trying to spend money they don't have on products they can't afford that were made somewhere else anyway to prop up retailers in the states for a few more months. It will just keep the merry-go-round going for a while until the little bit of extra credit (that has been extended) is exhausted in another round of consumption.

The basic problem with a lot of businesses out there now is that their model of profitability and cost base was developed in a situation that no longer exists (ie people being allowed and prepared to buy a lot of stuff on credit and loans that they shouldn't really have taken out; mostly because they felt that they were rich because their house or stock portfolio kept increasing in value) and these businesses are simply going to fail now: thats basic-level market economics.

Any attempt to buck it will just be throwing good money after bad, and (trust me) we will need all the cash we can our hands on to maintain the structure of our socities and countries in the coming years, we have already wasted far too much on propping up consumerism. The next bubble is going to be government bonds, securities, and currencies, and if we don't stop that happening we may see a "political crunch" similar to the credit one we are now enduring.

So to rebuild the global economy and make it secure again you either regularize the current globalized economy, create one currency, and one set of (enforceable) macro-economic rules, (and inevitably political rules as well). This would be in a process similar to what has happened in Europe since 1955, which has eventually resulted in the EU and the Euro (it works for a single continent with a shared civilzation, but to attempt a similar idea on a world level is (to my mind) going to be impossible to achieve and anyway is politically unacceptble to the majority of the citizens of most of the nations on the planet). Or, if not, then countries will simply have to be more self-sufficient and less dependent on borrowing foreign money to prop up public consumption (and asset price levels) at home once more.

For us in the West that will simply mean producing more ourselves with our own capital and resources, paying ourselves less to do so, and also stop consuming things we simply can't afford en masse; this includes houses at 7 and 8 times the average industrial wage, bought on 40 year mortgages with no deposit, or new cars every year based on 5 year financing deals.

Of course all of this now involves very significant short-term pain, but this is inevitable. Anyway trying to keep this broken reed of an economic system (based on overvalued land and paper prosperity) propped up is only going to create far more intractable economic problems in the long run.

We are already in a terrible mess from a massive over-extension of credit, a policy of western de-industrialization, and the creation of asset bubbles that were completely unsustainable, we have to move away from all these ideas, and stop the madness as quickly as possible, quit trying to find an easy way out, and take the harder road of working harder, borrowing less, earning more, and consuming less.

This is the only way that true prosperity is going to return, otherwise we are condemming ourselves to an ever decreasing spiral of debt and decline.

[Odie]

Bryn Mawr;1091978 wrote: The retailers cannot afford this - 75% markoff is the last gasp of a drowning man trying to pull in a little air before going under.


That much is true, but even if they slashed some of the outrageous prices, people would buy then.

- and I mean the larger stores, like Wal-Mart has done, their prices are tops!

-smaller business owners don't do well because everyone else has lower prices everywhere.

[qsducks]

Gift cards are always a good deal. Bought 6 this morning.

[Bryn Mawr]

Galbally;1092127 wrote: Bryn is right; you have to look at it this way. In the past couple of decades we have built a global market in capital, goods, and services. But we still have the same independent nation states, and no overarching rules of the complicated markets we have created (and that no one can understand or control to any great extent)

So you have a global economy where goods are services are created and sold across the world, but on a national level you have huge imbalances, with some countries doing much of the production (e.g China), and others most of the consuming (eg The USA).

That situation was OK as long as the structure held together; but its been blown apart now, and there is no point in American consumers trying to spend money they don't have on products they can't afford that were made somewhere else anyway to prop up retailers in the states for a few more months. It will just keep the merry-go-round going for a while until the little bit of extra credit (that has been extended) is exhausted in another round of consumption.

The basic problem with a lot of businesses out there now is that their model of profitability and cost base was developed in a situation that no longer exists (ie people being allowed and prepared to buy a lot of stuff on credit and loans that they shouldn't really have taken out; mostly because they felt that they were rich because their house or stock portfolio kept increasing in value) and these businesses are simply going to fail now: thats basic-level market economics.

Any attempt to buck it will just be throwing good money after bad, and (trust me) we will need all the cash we can our hands on to maintain the structure of our socities and countries in the coming years, we have already wasted far too much on propping up consumerism. The next bubble is going to be government bonds, securities, and currencies, and if we don't stop that happening we may see a "political crunch" similar to the credit one we are now enduring.

So to rebuild the global economy and make it secure again you either regularize the current globalized economy, create one currency, and one set of (enforceable) macro-economic rules, (and inevitably political rules as well). This would be in a process similar to what has happened in Europe since 1955, which has eventually resulted in the EU and the Euro (it works for a single continent with a shared civilzation, but to attempt a similar idea on a world level is (to my mind) going to be impossible to achieve and anyway is politically unacceptble to the majority of the citizens of most of the nations on the planet). Or, if not, then countries will simply have to be more self-sufficient and less dependent on borrowing foreign money to prop up public consumption (and asset price levels) at home once more.

For us in the West that will simply mean producing more ourselves with our own capital and resources, paying ourselves less to do so, and also stop consuming things we simply can't afford en masse; this includes houses at 7 and 8 times the average industrial wage, bought on 40 year mortgages with no deposit, or new cars every year based on 5 year financing deals.

Of course all of this now involves very significant short-term pain, but this is inevitable. Anyway trying to keep this broken reed of an economic system (based on overvalued land and paper prosperity) propped up is only going to create far more intractable economic problems in the long run.

We are already in a terrible mess from a massive over-extension of credit, a policy of western de-industrialization, and the creation of asset bubbles that were completely unsustainable, we have to move away from all these ideas, and stop the madness as quickly as possible, quit trying to find an easy way out, and take the harder road of working harder, borrowing less, earning more, and consuming less.

This is the only way that true prosperity is going to return, otherwise we are condemming ourselves to an ever decreasing spiral of debt and decline.


Thank you for putting my ephemeral ideals into a more concrete reality.

I know what I mean but I cannot always express it so that others can understand - you say it so much beter than I can.

[Bryn Mawr]

Odie;1092132 wrote: That much is true, but even if they slashed some of the outrageous prices, people would buy then.

- and I mean the larger stores, like Wal-Mart has done, their prices are tops!

-smaller business owners don't do well because everyone else has lower prices everywhere.


You have to take the year round picture - looking at the sales price is all very well but the chain cannot exist if all of its stores charge the minimum price all of the time.

[Bryn Mawr]

qsducks;1092134 wrote: Gift cards are always a good deal. Bought 6 this morning.


That's all very well if they're worth what you paid for them in a month's time when they're cashed.

If the government devalues the currency by printing more of it with nothing to back up the paper then tokens are worth less than the goods your money would have bought at the time.

[Odie]

Bryn Mawr;1092458 wrote: You have to take the year round picture - looking at the sales price is all very well but the chain cannot exist if all of its stores charge the minimum price all of the time.


hmmmmmmmm never thought of it that way, your right!

so how do we make people buy again with a recession....certainly is hard when so many are losing their jobs, their homes, no one buying homes here right now or anything major.

[Bryn Mawr]

Odie;1092461 wrote: hmmmmmmmm never thought of it that way, your right!

so how do we make people buy again with a recession....certainly is hard when so many are losing their jobs, their homes, no one buying homes here right now or anything major.


Is spending the answer to all of our troubles this time round?

I think that we're in too deep and that we need a fundamental shift in the basis of our economy.

Instead of generating profit on the back of profit we need to generate profit on the back of production.

I sell X to you so that I can afford to buy Y from him is OK for as long as someone is producing X and Y. When X and Y are nothing but the output of the last person down the chain then we have a problem - we cannot all be middlemen.

[spot]

QUINNSCOMMENTARY;1091357 wrote: What can you do? Get they heck out there and spend money, and start investing in the stock market.It would be interesting to compare what news is in the US papers this week with what's being said in the UK.

BBC NEWS | Business | Mood amongst US consumers worsens

"US consumer confidence has unexpectedly dropped to a record low in December, in the face of the US economic slowdown and continuing job cuts."

The article tries hard to see light at the end of the tunnel but, seriously, there ain't none.

[Oscar Namechange]

spot;1096748 wrote: It would be interesting to compare what news is in the US papers this week with what's being said in the UK.

BBC NEWS | Business | Mood amongst US consumers worsens

"US consumer confidence has unexpectedly dropped to a record low in December, in the face of the US economic slowdown and continuing job cuts."

The article tries hard to see light at the end of the tunnel but, seriously, there ain't none.


The news here is awash with stores reporting all time records of the British spending. It may just be the sales but we will see in time. I myself, believe the mood of this country is in good spirits.

I personally have been spending like mad in the past few days but that is just down to a fine horse called 'Kauto Star'. :-4

[QUINNSCOMMENTARY]

spot;1096748 wrote: It would be interesting to compare what news is in the US papers this week with what's being said in the UK.

BBC NEWS | Business | Mood amongst US consumers worsens

"US consumer confidence has unexpectedly dropped to a record low in December, in the face of the US economic slowdown and continuing job cuts."

The article tries hard to see light at the end of the tunnel but, seriously, there ain't none.


Well, one pundit economist in the US today said the Dow Industrial Average will be back to 11,000 by the end of 2009 and another has said 10,000 by the end of the first quarter. That would make my day or year as the case may be.

[minks]

Time to live within our means I guess, tighten our belts (oiy second round for me here in Alberta) and pay down our debts.

Hang in there everybody I hope we all come out ok in the end with minimal scrapes and bumps.

Pool your resources, invite your kids back home and keep grammy and grampy home too everybody has to pitch in and hey maybe this is were we see the value of extended family I dunno maybe the east isn't so wrong regarding this concept.

Jester does that mean you are moving to Canada or is it Mexico for you???

[Odie]

well people in Toronto didn't cut back this year, stores and malls said they had a whopping Christmas as usual!



I cut back, wayyyyyyyyyy back!

[Odie]

Scrat;1098097 wrote: I went out to the malls last week and frankly it didn't look good. One shop owner told me he wasn't going to be there January 12th. There was no way that could stay even if he sold everything he had in the place.

Everything was heavily discounted, up to 60% off. All I bought was an 18mm wrench at Sears for $10. I didn't need anything else. In 6 months I don't know if I'm going to have a job, why should I spend?

Everybody knows it's all my fault if I end up on the street correct?

No thankyou. I'll keep my money until I need it, if it's worth anything then.


your smart, best to keep all monies especially if your not sure about your job!

We had the same sales here, 60% off, but why buy when we don't need it?

[QUINNSCOMMENTARY]

Odie;1098113 wrote: your smart, best to keep all monies especially if your not sure about your job!

We had the same sales here, 60% off, but why buy when we don't need it?


If this attitude continues to prevail, we will never get out of this mess. Think about it, consumers not consuming means businesses closed, jobs lost and a continuing of a vicious cycle. The government, any government, is not going to be able to buy us out of this.

[QUINNSCOMMENTARY]

Odie;1091933 wrote: IF retailers would just realize, by cutting their items down to 50% off as they do now for Christmas, they still make a huge profit.....but keep those prices all year round.....there would be no recessions!:-5:-5



really, how hard is it?


That's a little like saying that oil should stay under $40 a barrel and yet the facts are to generate production, exploration and new refiners, the price has to be around $60 a barrel. Russia can't make money at the current prices. While it would be nice to say the heck with Russia then we are back to the problem of supply and demand again.

[spot]

QUINNSCOMMENTARY;1099303 wrote: If this attitude continues to prevail, we will never get out of this mess. Think about it, consumers not consuming means businesses closed, jobs lost and a continuing of a vicious cycle. The government, any government, is not going to be able to buy us out of this.


Is it inevitable that capitalism can only be fed by consumerism? Because consumption, particularly wasteful conspicuous gloating consumption, is pretty sick. We've all watched it for a generation and the sooner people grow out of it the better. Can capitalism not be driven by the production of more interesting products than the eye-glitter tat which has filled the shops these twenty years? And while we're at it can we perhaps find an alternative consumer black hole to pour resources into that isn't the military?

The one end worth working toward in the long term is galactic colonisation. It can take all the labour and productivity we're capable of, it doesn't kill people and it needn't involve feeding the diseases of the rich. A capitalism based around the space industry is something I'd applaud. If it would get rid of those filthy dispiriting malls at the same time it would be irresistible.

[QUINNSCOMMENTARY]

Lon;1091776 wrote: I agree with everything in your post, including not charging for goods. however, do you really think there are that many that have the cash and can buy without charging? The problem compounds if charging prevails.


If you have the money to pay the credit card you have the money to pay in cash, it's just a matter of timing isn't it. If I want something I save for it and then I buy it. I may not get it exactly when I want it, but I get it.

[QUINNSCOMMENTARY]

Odie;1091933 wrote: IF retailers would just realize, by cutting their items down to 50% off as they do now for Christmas, they still make a huge profit.....but keep those prices all year round.....there would be no recessions!:-5:-5



really, how hard is it?


Unfortuantely, they are not making a big profit by doing that, the problem now appears that there is too much competition in the retail section, too many stores too many retailers selling the same thing, etc.

There appears to be general consensus that during 2009 many of the big name stores will simply dissappear, Sears and K-Mart are in trouble, Talbots has been metioned (my wife claims she will be naked the rest of her life if Talbots goes out of business- I'm still trying to figure out is that is a good or bad thing).

Linens and Things is already gone (ever notice how close the Bed Bath and Beyond Stores were to them).

As with other sectors of the economy, there is to much of everything, too many malls and outlet stores, too much of what we don't need and never could afford.

[QUINNSCOMMENTARY]

Scrat;1099400 wrote: So Quinn I am supposed to go out and buy a 42" big screen TV, throw out all my blue jeans every 3 months and buy new ones, buy another truck and have the wife buy another car and all new wardrobe?



I see what you mean, I see what will happen if people don't consume. This weird kind of socialism you are talking about really has a dark side to it. I see it in the people losing their homes, in debt up to their eyeballs barely able to feed their families and pay the rent.

You know what this game is about? Who's left holding the bag!!! It's about who's stupid enough to dig their own hole using a shovel they put on a credit card and having to pay for each shovel full of dirt.

I am not going to go to little clothing store downtown and buy new bluejeans because the owner has his new Mercedes parked out front. Why should I support his lifestyle at my expense? Why should I be left holding the bag? When I'm up to my receding hairline in debt he's the one that's going to be calling me a fool FOR GETTING INTO DEBT!!

It looks to me as though Americas model of capitalism, of success, is being murdered by a brutal set of facts.

Our system, just like the Soviet Unions, has failed. Unfettered capitalism does not work. These pyramid schemes in housing, hardware, all of it has fallen to pieces. We ran out of people to hand the bag to Quinn, now we all have a hand on it.


Overly pessimistic at best, downright depressing at worst. Of course capitalism works, it works within the context of people who operate it from the little guy to the Wall Street mogul. And while there is little doubt we went over the top now, some of the fundamental reasons it is as bad as it is are the measures government took and fostered that were counter to pure capitalism and which created artificial situations such as forcing sub-prime mortgages, targeting minority groups for home ownership without regard to affordability. In other words, social engineering.

And, of course, the good old keeping up with the Joneses.

We seem to forget that within the last 30 years there was as high or higher unemployment, tremendously high inflation, mortgages at 9-10% were the more the late 1980s. In the 1980s my stable value fixed income fund in a 401(k) plan was paying 16%.

What needs to happen unfortunately is to allow the system to work and get rid of the excesses and build from that point, a painful and multi-year process I admit, but necessary.

[QUINNSCOMMENTARY]

spot;1099464 wrote: Is it inevitable that capitalism can only be fed by consumerism? Because consumption, particularly wasteful conspicuous gloating consumption, is pretty sick. We've all watched it for a generation and the sooner people grow out of it the better. Can capitalism not be driven by the production of more interesting products than the eye-glitter tat which has filled the shops these twenty years? And while we're at it can we perhaps find an alternative consumer black hole to pour resources into that isn't the military?

The one end worth working toward in the long term is galactic colonisation. It can take all the labour and productivity we're capable of, it doesn't kill people and it needn't involve feeding the diseases of the rich. A capitalism based around the space industry is something I'd applaud. If it would get rid of those filthy dispiriting malls at the same time it would be irresistible.


Capitalism is driven by what people want and need, the goods and services they want to buy, good bad or indifferent, it's really that simple.

[Lon]

QUINNSCOMMENTARY;1102109 wrote: If you have the money to pay the credit card you have the money to pay in cash, it's just a matter of timing isn't it. If I want something I save for it and then I buy it. I may not get it exactly when I want it, but I get it.


Paying the very minimum each month on a credit card balance as many do is hardly having sufficient funds to pay cash.

[QUINNSCOMMENTARY]

Front page headline, the Wall Street Journal, Janaury 6, 2009.

"Hard-Hit Familes Finally Start Saving, Aggravating Nation's Economic Woes"

It is what is known as the paradox of thrift. And if it continues, it means that no amount of economic stimulas is going to help because people won't spend the stimulas, just as the stimulas early in 2008 did not help.



So, go buy something, because if you don't, you or your neighbor may not have a job. :-5

[qsducks]

I'm going shopping for groceries this morning & school uniforms. although the uniforms are made in Thailand and they charge me out the wazoo for these cheap junky uniforms.

[spot]

QUINNSCOMMENTARY;1102128 wrote: Capitalism is driven by what people want and need, the goods and services they want to buy, good bad or indifferent, it's really that simple.


No, I think you're quite wrong in that you're failing to distinguish Capitalism from Consumerism. Capitalism as practiced in the US has fed itself on the bottomless pit of military expenditure generating massive well-paid employment for a large fraction of the workforce, allowing them to conspicuously consume. Without that bottomless pit there's no way of operating a consumer economy.

Obviously there is a basic working fundamental, market forces within a regulated economy, which can underly any political system as the most efficient means of manufacture. That's not Capitalism, it's just one small aspect and it applies equally well to a Socialist model of society. I have no problem with market forces within a regulated economy. I have a complete antipathy to unregulated greed, consumerism and the lack of social safety nets.

[QUINNSCOMMENTARY]

Jester;1103194 wrote: Everybody I know down to the crossing guard lady said they were against the bailout...

This is proof our elected leaders don't represent us, when tough times come people tighten up, its common sense. But our leaders think its better to spend our way out of it- listen to what your telling people, essentially your telling us to follow congress example when we know we don't have the cash to do so, and truthfully congress doesn't either.

NO stimulus is needed what is needed is for companies that have money because they spent what they had wisely and managed their money well get to buy out the bigger companies at a discount- the new companies get to run the bigger ones and probably do it as wisely as they managed before building new consumer confidence along the way, its economic evolution- the strongest and best survive and the dogs die. That's what needs to happen, and let american ingenuity revive in america.


Well, you are right about companies needing to consolidate, become more efficient and with less of them in some industries and that is actually happening. I predict you will see Chrysler disappear with some of it's vehicle line becoming part of GM. On the other hand in the short run that means more job loss.

The fact remains, that consumer spending has been driving the economy to the tune of 70% over the last decade. We will not see that again for a long time I suspect, but the economy is not going to recover and jobs will not be created until business has somebody to sell to.

People are scared no question and they are following their instincts, but that is not helping. That is like people who saw their 401(k) cut by a third and immediately transferred to fixed income funds thus assuring their losses and yet the market has already recovered some 20% or so since the low in 2008.