Comments on: Here lies the Great American Consumer http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/ Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Comment from Munich http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-24082 Sun, 13 Sep 2009 23:29:58 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-24082 Dear James Saft,

just wanted to say that I really appreciate every one of your analyses.

Brilliant, outstanding.

Keep writing

Malte
Munich, Germany

]]>
By: krishnamurthi ramachandran http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-24073 Sun, 13 Sep 2009 21:01:36 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-24073 Dear Mr.James,
I am a one of your follower from twitters captions.
This is an interesting article on Americans consumer interests.
Americans always wants to have new, and a latest invention on communication and on new automobiles.
The evolution of electronic and communication devices-
Record Players, CD,Video Player, VCR,DVD Player, latest Land line phone sets, Mobile from single digit to very latest,Mobile with video pictures, Mobile with music downloading, mobile with web surfing, lot of storages,PC,PC with all latest devices, and now with latest gadgets,cameras, digital Photo graphic devices, web services ,credit cards, debit cards, ATM ,and now with mobile payment systems.
These are all creations to luxurious enjoyment.
If these latest technological advancement with high rates goes on few years, then there will be no direct contact with their own fellow beings.
You might have read !Future Shock! by a famous author.
Even that books arrived conclusions had crossed to write a new book on a great,great future shock.
B.Russel, a well known philosopher, author on many books on mathematics, logic, economic and political ideas,and many urges to live peacefully with all nations.
When i was in Honors degree level, one lesson on this famous authors writings says, A Day will come, world people will take capsules instead of meals for their today life.
That is happening on now.

]]>
By: Drew Kreutzweiser http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23992 Sat, 12 Sep 2009 11:52:16 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23992 I would like to touch on something mentioned about consumer goods and electronics.

In the 80’s the VCR came out (I’m getting old…rats) and with this new gadget everyone went out to buy one. And then came the PC and again everyone went out to buy one. The DVD next. The cell phone. Flat panel TV. LCD TV. Digital Cameras. Ipods, etc.

What the world needs is the next technological advancement, which will bring billions of consumers back into the stores and restart the Keynesian model.

]]>
By: Dermot http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23816 Fri, 11 Sep 2009 16:26:59 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23816 Yes we can all take credit for reducing debt and whilst it has always been an objective of mine and doubtless the majority. I feel that the premise of the article this is that this is voluntary, “The new Frugality” is incorrect .
In the last 2 years , bearing in mind that my personal circumstances have not changed, the interest rates that I am paying have gone from an average of 9% to 19% [bank rate here from +/-6%-0.5 %], my access to credit has been cut by 35% + on the basis that “this reflects my credit score”. I say again my personal circumstances have not changed.
In this same 2 year period I have paid off my mortgage early and am within 2 months of having paid off a personal loan ,my long term savings with credit provider exceed my total credit by a factor 8, and reduced my credit card debt by 30%
Whilst I agree with the analysis that if we don’t spend there will be pain on the consumption front I do rather feel that if the current criteria applied to me had been applied to the financial institutions , I would say in 2000, the current mess would have been avoided.
In summary it seems to me simpler than James suggests and his criteria should be the recession [ in all it’s guises] will not finish until 1] the banks have recapitalised [ probably by extortionate interest rates and reneging on or dramatically varying agreements ] 2] we as individuals have recapitalised under the duress outlined above rather than by ” a change in mood “.
Speaking for myself only ,the duress is counter productive as it makes all my planning irrelevant at the stroke of a computer pen and therefore much more cautious whether we are talking investment or spending.
Once the banks stop acting irrationally and become trustworthy on the contractual front I have no doubt that we will all be prepared to enter into agreements with them , In the meantime only the desperate will hense reinforcing the “sub-prime” Catch 22 , i.e. the only people who want to borrow cannot repay therefore whoever wants to borrow cannot repay .
James I feel that your statistical analysis is correct but the motive your suggest is not .
Credit=trust according to the dictionary if the bank’s computers don’t trust us and we don’t trust the banks none of us are going anywhere is the bottom line . So I agree with you but for different reasons which I hope you will note and comment on .

]]>
By: Dennis de Champeaux http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23812 Fri, 11 Sep 2009 15:32:25 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23812 Paying off my 15-year mortgage in about 8 years (at the end of the 90-ies) has been my best “investment”:
– Psychologically: the stress removal by not having to make a monthly payment has changed me substantially
– Financially: I would have lost a ton if I would have bought stocks instead

It would be wise if the government would do the same at its level: slowly decreasing the entitlements for which it is responsible. The well-intended generosity of the previous century has – as a side effect – caused the majority of the population to become economically
dysfunctional, i.e. consuming more in social services than what they pay in taxes (healthcare and public education).

Economists using the GDP metric for short term analysis makes sense, but is totally flawed for assessing the long term trends of nations; see:
http://rs6.risingnet.net/~ddcc/wbi/
and in particular:
http://rs6.risingnet.net/~ddcc/wbi/Econo my.html

]]>
By: Bob http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23800 Fri, 11 Sep 2009 14:22:01 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23800 One would hope the US Government would take the same approach the consumer has …!!

]]>
By: Jim Smith http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23797 Fri, 11 Sep 2009 14:09:09 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23797 It is about time that Americans wake up and realize that debt is bad…not good.

]]>
By: Joe Bonasses http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23795 Fri, 11 Sep 2009 13:55:01 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23795 I think this is more of a demographic trend that is just now starting. Baby Boomer spending will continue to decrease, its a function of age and the number of people in this age group. I think people from my generation (Gen-X) are generally much more conservative when it comes to spending, consumption, and most importantly the desire to take on a lot of debt. With the looming shortages in government entitlement, it doesn’t make a whole lot of sense to borrow against the future, and everyone in my generation knows it….

]]>
By: Ian Kemmish http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23794 Fri, 11 Sep 2009 13:54:43 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23794 I grew up in the UK in the 1970’s and early 1980’s. As a result of those formative experiences, I have always been frugal. But it didn’t take long for another generation to grow up under me and start consuming again — indeed, I still experience a kind of culture shock when I hear people refer to “the 80’s” as a boom time!

So if you’re hoping for current generations of consumers to start spending again, I agree, you’ll have a long wait. But I don’t think you’ll need to wait as long for their children.

]]>
By: Anonymous http://blogs.reuters.com/great-debate/2009/09/10/here-lies-the-great-american-consumer/#comment-23677 Thu, 10 Sep 2009 16:53:13 +0000 http://blogs.reuters.com/great-debate/?p=5282#comment-23677 The fact that US consumers decided to cut down on consumption is not as bad as it seems, and not as bad as it would have been just a couple of decades back when America actually produced most of what was consumed, and then some for export. Since most of consumer goods are imported, it’s the producing countries that would take the hit. Mostly it will affect China and other emerging economies of Asia, though Europe and Japan would also feel it.
As for the drop in borrowing, the consumers as profligate borrowers are being replaced by none else but Uncle Sam himself. The funds borrowed by US tend to be spent domestically, so this change may actually be to some extent beneficial for American economy. With so much money either borrowed by US or created by Fed out of thin air (or paper and green ink, which is essentially the same) inflation is more probable than deflation.

]]>