Due to an ongoing health crisis in the family, blogging will be 'on and off' as time and circumstances permit for the foreseeable future. I also beg your indulgence if I am slow in responding to emails. New posts will appear below this notice.

Monday, December 27, 2010

Brace Yourself: Good economic news

Lest I be accused of being a perma-bear...
NEW YORK — Forget the returns line. People hit the stores after Christmas to buy, indulging the rediscovered retail appetite that may have made 2010's holiday shopping season the biggest ever.

Revenue for the holiday season is on track to grow at its strongest rate since 2006. Total spending for November and December could exceed 2007 sales — the best season on record. This despite an uncertain economy and a rise in thrifty habits.

Shoppers spent more on their family and friends and for the first time since before the Great Recession, treated themselves and even their pets. And after Christmas, even an East Coast blizzard didn't kill the mood as they headed to stores armed with gift cards and eyeing a new crop of discounts.
Read the rest here.

I have no problem with spending... as long as people are not going into debt doing it. I will be interested in seeing how much of this was charged and how much was paid for in cash. I vaguely recall reading that the weekend following Thanksgiving was very good for retailers, but that people were mostly paying with cash and that credit card use remained low. If that trend held throughout the last month I would call that encouraging news.

P.S. The above is intended to reference the economic implications, not the cultural problem of excessive commercialization of Christmas, which remains a serious problem.

7 comments:

Anonymous said...

Save, not consume? Cut the federal budget? Cut entitlements for the Boomers? Bah, humbug! And the band played on. Statmann

Anam Cara said...

I wrote a check or paid cash for my after Christmas purchases.

The Anti-Gnostic said...

A market economy is always in the process of recovery: bad debts are discounted, unsustainable ventures are liquidated, capital and labor re-deploy, savings accrue and fund future consumption.

Government efforts at 'stimulus' only hinder this process. The government is pouring capital into enterprises on which the market had rendered its death sentence: McMansions in the California desert, urban condominiums in the middle of criminal feeding grounds, AIG, Goldman Sachs, US Treasuries, Sallie Mae, Freddie Mac, Fannie Mae, General Motors, various States and municipalities, etc. To the extent they survive, it is only because of government intervention. They are zombie institutions, consuming capital which the market would otherwise direct to productive enterprises.

Employees of these zombie institutions doubtless have some extra cash to spend: monetary inflation. Others have cash because they shut off the spigots in 2007, violating every dictum of Krugman and Cramer.

Anonymous said...

Ag - you really really need to wean yourself off that "Austrian" the-market-is-always-working-toward-the-best-of-all-possible-worlds bs. I mean seriously: bookmark this page and read it 5 years down the road after the koolaid has worn off.

Heracleides said...

AG - well said (and pay no attention to the Anonymous 'Owenite Socialist').

Anonymous said...

Yes, yes - I must be a socialist if I don't have a blindly Panglossian view of the market. Good one.

Thing is - been there, done the free market platitude thing - as well as even more foolish things. I can see ag is smart, so my sense is that he'll learn over time...

The Anti-Gnostic said...

Anonymous,

What do you think is keeping the fraudulent enterprises I listed afloat--the market?

Looking forward to your answer.