It's the consumer, dummy

Retailers are crashing and burning, many of them reporting two straight months of double-digit losses (in percentage points) of sales:

Of the more than two dozen major retailers that reported on Thursday, most had sales declines at stores open at least a year, the majority of the decreases in double digits.

And that, my friends, is an "Oh sh*t" moment.

On the bright side, you can get some extremely good buys, which I suggest you take advantage of while you still have a job.

“This is the year the consumer has been given a holiday gift beyond belief,” said Marshal Cohen, chief industry analyst for NPD Group. “You can get anything, anywhere, at any price.”

“What we’re hearing anecdotally from different retailers is that when they’re putting something on sale at 30 or 40 percent discount it is no longer having an effect on consumers,” Ms. Greenberger said. “They’re having to cut prices 50 to 60 percent to get consumers interested.”

Hells yeah I'm going shopping!

But seriously, this brings me back to my point: this article again mentions that consumer spending accounts for 2/3 of the economy. Now you'll have to take my word for this until I get you some solid numbers, but consumer spending does not track 1/1 as income increases. That is, a person at the lowest level spends pretty much 100% on either buying new things or paying on things they "own" such as houses or automobiles. At the upper levels, a lot of that goes into investments. So, despite the fact that the richest Americans own an inordinate amount of wealth, their real consumer spending is not what drives the economy. Hell, if it was I could at least see the reasonableness of conservative arguments that concentration of wealth is actually beneficial. But I'm rambling, so back to the point before I collapse into bed: American consumers, the vast majority of which make less than $75k a year, need a real increase in income. If this comes at the expense of the top businesses and the top earners, consider it a necessary sacrifice for the good of the nation. American wealth is based on the wealth of its lowest, not its highest. This is not socialism. I don't propose that we take all the wealth and redistribute it equally. Even I believe that imbalance is what drives the system. But we can't have these incredible degrees of inequality.

The current financial crisis is the result of two things: one, lack of oversight and regulation on derivatives markets, brought about primarily by free-market capitalists. Two, the stagnant (or retrograde) wages of the American worker. That should be painfully obvious when we realize what sorry shape we're in because people who wanted homes couldn't afford them just by working full-time and had to take bad loans to do so. If we'd negated both those problems ten years ago, we wouldn't be where we are now! End of rant.