AMERICAN "ANIMAL SPIRITS" ARE REPRESSED, NOT STIMULATED/UPDATE
Remember the infamous"green shoots?" From the very beginning of the current crisis, the administration tried to convince the American people to spend their last dollar by insisting that the economy is under mend. The number who were moved decreased with every false improvement pronouncement. It simply could not square with the reality of the average American or their understanding of their own financial prospects.
First and foremost, 17% of the American work force is jobless or underemployed. That means few outside the burgeoning Federal bureaucracy feels their job is safe. At the same time, their house is losing value, their savings accounts bring paltrier and paltrier returns, the stock market seems untrustworthy and their taxes are expected to rise.
If that is not enough to make them cautious consumers, their pension funds are in trouble and they are told they should not count on Social Security or Medicare to continue to cushion their retirement. Oh, yes, the Fed tells them that their is no inflation but food and gas prices are continuously rising as do restaurant and air travel prices. To add insult to injury, Ben Bernanke just announced that he is about to start printing money which means that every dollars they still own is going to be worth less.
No, this is not the way to awaken the American animal spirit. This is a way to convince more and more Americans to pay top dollar for gold. If that bubble bursts as it did in the 1970s, Americans are going to end up even poorer than they are today.
Much has been written about the elite/public divide. Not enough about the failure of this giant experiment in behavioral economics. You can not fool all of the people all of the time.
That's the average amount U.S. households say they intend to spend on Christmas gifts this year.
The data point -- $6 less than last year's estimate -- comes from The Conference Board's annual survey of holiday spending intentions in 5,000 households.
“Consumers are approaching the holiday season in a somewhat cautious mood,” says Lynn Franco, Director of The Conference Board Consumer Research Center. “However, with retailers already enticing consumers with markdowns and bargains, this season could very well match, perhaps even surpass, last year’s.”
Only 25 percent of all households intend to spend $500 or more on Christmas gifts, down slightly from 26 percent last year, the survey found.
Among other households, 39 percent plan to spend $200-$500, up from 35 percent last year, and 37 percent expect to spend less than $200, down from 39 percent in 2009.
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