Who predicted an increase in Xmas shopping this year and what kind of hallucinogens did he/she take to get that number?

My best commercial account was a high-end appliance store. They sold Wolf ranges and SubZero refrigerators, and I put these items into any number of expensive houses where the kitchens were being remodeled to the tune of multiple tens of thousands of dollars. This account was worth about #30,000 a year.

What paid for these remodels? Equity loans, and as a blog reader who knew which way the wind was blowing, I have speculated all year about what would happen when these loans dried up.

The check for the October invoice bounced, but I got paid after about a week. Two weeks later the employees were laid off, four days later the doors closed, and the November invoice is toilet paper.

I'll survive, because the rest of my business is moving pianos, and the world won't run out of those, but my friends lost their formerly thriving business in the space of two months.

Amazon did well -- sales were up.

Oh noes! Next we'll discover that basing an economy on selling each other things made elsewhere isn't viable. C'mon, adding value is for other people. We Americans have the economic miracle of sustaining ourselves by buying and selling things we don't need with money that we don't have to impress people whom we don't know.

Of course Luxury sales took a huge hit. A lot of the growth in luxury sales was "keeping up the Jones' down the street" by tapping their fictitious home equity like an ATM. There are not enough real rich people to sustain the number of luxury brands and supplies that are out there. A lot of their growth (I'd bet) was to the home equity up to debt in our eyeballs crowd.

Once the spigot was cut-off, the number of "rich" people dropped dramatically. It's going to be interesting once this country realizes how much of the past decade's economic growth was built on the back of spending that was sustained by home equity debt that no longer exists as a source.

Can you provide names of eight friends and loved ones who are in dire economic circumstances and may not have enough money at the end of the month to make ends meet because of a layoff or slowdown in business or bottoming out of unearned income?

Well, if you can, forget the recession, because we're already smack dab in a full fledged depression! -Kevo

The thing that bothers me about the tone of these belated 'revelations' in much of the media is the sense of entitlement expressed by the retailers. You can almost hear them saying, "We brought in all this bling -- we kept our part of the bargain -- now SHOP, damn you!"

Very rare is the thoughtful consideration that the vast majority of Christmas "stuff" is neither necessary nor useful. As people get more wrapped up in "stuff," they get more divorced from why and for whom they're buying it.

The arc tracks like addiction: first it was about the beloved person or friend or relative as a way of expressing connectedness; then it became about impressing them, and the neighbors and helpful folks (garage mechanics, hairdressers, newspaper deliverers, etc.); then about impressing ourselves with how 'generous' we could be; now it's about just keeping the retail world on an even keel.

Maybe it's time for cold turkey: buy what's necessary and useful, and preferably locally made; the best gift is time spent with loved ones doing what they enjoy.

"We now know, of course, that something can discourage Americans from spending money: an economic crisis and deep recession." And not having any money to spend discourages spending.

Well, there is one bit of good news: Huckabee didn't get elected.

I am not an economist, and in fact I am terrible with numbers, but even I saw this coming. For over a year I have been telling my friends and family that the economy was teetering on a ledge and could very easily fall. Of course, not being good with numbers I couldn't provide concrete reasons. I just kept saying "look, when a person runs up debt to the point where it takes everything just to make the payment, that leads to bankruptcy. Is it any different for an economy?"

I know this is way over simplified, but it is still true on the whole. A national economy cannot thrive forever on debt financed spending...and here we are.

The silver lining in this mess is that we all have an opportunity to re-assess our buying habits. What are truly needs and what are merely wants? Food, water, shelter, friendship...everything else is luxury? If we internalize this simple mindset, then we can live happier, more fulfilling lives.

It is interesting to note that in central Florida where I live most the resale houses are going for under $99 a square ft with many around the $80 mark. You can not build an outhouse for that price , so that lets me know it is only going to get worse as there must be millions upon millions of those "house" ATM's that are worth maybe a half or less of thier mortgaged value. I am lucky in that the properties I bought in '05 are worth only slightly less than what I paid.

There's no doubt we are in a Depression, and, in some ways it may be worse than '29. True, we have a social safety net that didn't exist, and the luckiest thing is that we have an adult taking over the economy a few months in, instead of suffering through 3 years of Republican economic misrule before the change.

But in soime ways we are worse off. We've lost the 'agricultural safety net.' In '29 a large part of the population still lived on farms, and another substantial chunk were only a generation removed, and had the option of 'going back home' if things got too bad. People on farms may not have thrived, but at least they didn't starve -- and the informal cooperatives that rural communities frequewntly became helped make things less tight for everyone.

Gone!

The 'toolbox option.' My grandfather and my wife's were both carpenters, not construction workers, the kind that built things from scratch and sold them. Other people 'fixed things' from refrigerators to radios to cars. (Some people even survived as 'scissors grinders,' going around with a portable grinding wheel sharpening scissors and knives.)

Today, most people don't even realize that things CAN be repaired rather than replaced -- and things that ARE repairable, like cars, require far more skill and knowledge -- and equipment --than they once did. You can't learn to do it with one class a week in high school and talking to your Daddy in the garage.

The 'emergency job' option. We talk a lot about how manufacturing jobs have been outsourced, but we've lost a lot of other types of 'safety valves,' and we can't blame 'greed' for them. I survived much of my life because I could always work as a foot messenger and temporary file clerk. Faxes and e-mails have almost ended the messenger business, and try to find a job 'just filing.'

(Interestingly enough, one of the most important and progressive of Obama's goals will have a side-effect exacerbating this. All of us want a sane, sensible, and simplified Health Care System -- and a lot of us figure it will wsind up a 'single payer' one. And the idea of computerizing medical records is something that will save a lot of lives. But the one 'growth area' in the 'semi-skilled clerical' category is the 'medical billing assistant/clerical' category, and there will be a lot less need there once the reforms are implimented.)

The 'entertainment business immunity.' In '29, the one area that seemed 'depression proof' was entertainment and sports. 'People need distraction' was the explanation, and in fact the period was a high spot for many forms. The American detective story boomed and became a challeger to the British. Radio boomed, and radio drama and comedy in particular. And many people think that movies never approached the peaks of the 30s since.

But the economics of the business was a lot different then. Sports salaries were low, and contracts were for one year only -- with the 'reserve clause.' People joked about Babe Ruth earning more than the President, but Ruth was the biggest celebrity of the time. Today the Yankees have at least three contracts that each total more than we would have paid the President since the country's founding at the current salary he receives. (The major league minimum -- which means the rate an individual receives if her plays in one major league game, or even if he's just on the 40-man roster -- is substantially more than we pay a Senator or Governor.)

The 'revenue stream' is different. In the 60s, Bill Veeck could write that 'the only thing I never gave away in my promotions was free admissions, because seats in the park were the only thing I have to sell.' Today, probably no team makes enough from ticket sales to pay the players, forget all the support staff from ushers to General Manager. They are advertising-supported with an assist from corporate buying of 'luxury boxes,' and revenue from the tv networks they own. (At least the first two will be affected strongly by corporate 'belt-tightening.')

Books flourished, but paper was cheap and writers would write for 1/2 cent a word -- and multi-book contracts and six or seven figure advances were unthinkable. And people could afford to buy them. Paperbacks, once they came in, cost about a quarter. And even hardbacks -- a publisher's quote from a mystery reprint from 1944 I pulled off my shelf: "formerly $2.00 and $2.50 -- now offered at a popular price."

And radio drama and comedy flourished because it was cheap to produce. It didn't require location shots, make-up, film editors, or even 'honey wagons.' A mike, some soundproofing, a few actors and a script -- and the imagination of the hearers. I'll leave comparisons with tv as an 'exercise for the reader.'

(And there wasn't competition from the Internet back then. Today, not only do most of us have the ability and equipment to produce a radio music or talk show and 'broadcast' it ourselves, but I'm surprised there aren't groups of friends 'recreating the Golden Age of Radio' by producing shows based on the original scripts with homemade sound effects.)

To swing this back to my main point, when we look ahead to the economic troubles we're facing -- and which we'll get through -- don't just think of it as '1929 plus a safety net.' The safety net is there, yes, but there have been a lot of other changes that may make the initial suffering, once this hits home, even worse.

@prup 1:25 PM:
This is a very clear and logical presentation of what is occurring, and which most of the "intelligencia" do not recognize, or are in denial of. The further we take ourselves away from "the land", the less resourceful we are, simply because we don't have the basic survival skills of our predecessors. It seems that as our society has become more complex, our coping skills have become more specialized. As you mention, auto repair is now a highly sophisticated operation, requiring a combination of advanced level skills, intelligence and sophisticated equipment. All of this costs money and requires time to develop. Our society has down-sized the levels of education mandated for its survival at a higher level. By and large, students are not provided the motivation for advanced thinking and creative endeavors that manifest as growth of the culture.

Obama represents a new paradigm in thinking and problem-solving. He must be partnered with critical and creative thinkers who are more interested in making things better than in blaming someone or some policy or some social structure for the demise of things as they have been. Change is inevitable. Our choice is in getting into the flow instead of fighting it. The river will always reach the sea, one way of the other. The Grand Canyon is a beautiful representation of what a river will do to return to its home, the sea.

I am committed to Oneness through Justice and Transformation
peace,
st john

The only tax that can consistently keep generating revenue, more or less (since even when people cut spending, *someone* is earning money) is the old fashioned, despised income tax. All the others (sales, property) are very sensitive to economic ups and downs.

So that optimistic report on Black Friday spending was just a lie to convince people the economy is fine and they should spend more? What a surprise.

Amazon did well -- sales were up.
Posted by: Gore/Feingold '16

Based on years of experience selling books online through Amazon, I would bet everything I own that they use shady accounting practices to get false numbers. I can't think of any retailer I trust less to provide an accurate view of their own economic picture.

I keep looking for those incredible markdowns and sales the MSM keeps talking about, but all I find is the same old 10-20% off on selected items that you see virtually every week.

"The river will always reach the sea, one way of the other. The Grand Canyon is a beautiful representation of what a river will do to return to its home, the sea." posted by stjohn
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Had to sorta laugh (through some tears) at this, since the Colorado River, which flows through the Grand Canyon, hasn't reached the sea for decades. Seems us homo sapiens screwed it up by taking more water out of the river than it replaces. So this is just one more example of how much more screwed we are this time around.

To: bob in fla on December 26, 2008 at 7:53 PM While you may be correct that the Colorado River has not reached the sea in its current form for generations, it does through evaporation/precipitation at some point. And, as it was forming the GC, it must have fed many tributaries along the way. Again, we have narrowed our vision so much that this metaphor does not seem to work; we must open our eyes and expand our perception to know a greater truth.
peace,
st john