Had to pick up a last minute gift yesterday and the local mall was a true madhouse. Parking lots were jammed and “high anxiety” would aptly describe the behaviors on the part of shoppers, i.e. impatience, fighting over parking spaces, long cues, etc. T’was a remarkable turnaround from what I’d seen only weeks earlier when area shopping district activity seemed grossly understated. I wondered if, say in our collective consciousness, people see this season as the “last best” and just spent with abandonment. Of course, I had to question my attitude about the prevailing weakness, even consider this as a sign that the public does indeed feel better off. Still, something didn’t seem right about the climate. The markdowns were tremendous. I spent more this year (I guess like most everyone else) mainly because the discounts were too abundant. While nominal sales may post a significant improvement over prior years, I am almost certain that the margin growth won’t be there. That smacks of a “do or die” strategy on the part of retailers. Charles Hugh Smith has an essay out about the Last Christmas in America. Well, he and I seem to be on the same wavelength.
“What strikes me is just how poor the retail environment is. Well poor for the merchants, great for the consumers. Would they have slashed prices this deep, this early, unless sales were off on an absolutely monumental scale?”
The Last Christmas in America
Christmas 2010 will be the historical bookend of the consumer era. (Emphasis added: CHS) The last gasp. I don’t see any possible chance of its return. This culture of spending, the conditions won’t be there for it, nor the desire to consume like that again. I think it’s simply being beaten out of us.
If 20 million jobs disappear (9 million have already vanished since 2008), so do all the taxes those wage-earners paid; if 10 million homes go through foreclosure, the inflated property taxes the owners once paid will disappear, too. Once businesses close, it’s not just wages which disappear: all the junk-fees governments levy disappear, too: the business taxes, the licensing fees, the permits, transaction fees, etc.
Does anyone think all these taxes and levies can fall and government employment will be funded by some other source? Yes, the Federal government can borrow money for a few more months or years at low interest rates; but soon, the surplus money which has piled up in exporters’ accounts will be gone, and the endless borrowed trillions will actually start costing real money–money that will be diverted from government employment to pay the interest on all that wonderful debt everyone loved when they got a piece of it.