Rampant Consumerism Is Dying

February 24, 2009

Right after 9-11, Bush and the administration told the American public to go out and SHOP! I know the message that he was trying to convey, “Don’t let THEM change your lifestyle”. Well, someone or something has to change our lifestyle and maybe it’s the economic crisis that we’re now in; however, Obama is singing the same song, albeit a different verse. Let’s SPEND our way out of the crisis.

When will we finally get the message? Ever?

American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment. But the worst is yet to come, according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American’s standard of living is undergoing a “permanent change” – and not for the better. We’re looking at a whole new WORLD financial up-rooting. How can things be the same when-

1-There has been an $8 trillion negative wealth effect from declining home values.
2-A $10 trillion negative wealth effect from weakened capital markets.
3-And a $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”

The average American used to be able to borrow to buy a home. Remember those days? We used to be able to send our kids to a good school. Once upon a time people bought new cars. Ah, but all of those things were made available through CREDIT markets and that no longer exists! If you don’t think so, try and get a loan thesse days.

The end of rampant consumerism is ultimately a good thing; however, the unraveling of an economy built on debt-fueled spending will be painful for years to come. As the Bush administration was forever changed due to 9-11, so too whatever Obama thought he’d accomplish in his presidency has been forever altered as well- and not for the better. Yet we are beginning to learn some lessons that will help build our character going forward.

The stripping away of the invulnerable illusions, the letting go of the pretense, the exposing of the false self, and the idea of not taking self too seriously are all being out before us in some form or fashion. Even the wealthy are having to curtail their spending. The Russian billionaire who had written an earnest money agreement to buy the most expensive home ever sold or purchased, is now on the rocks. And, he wants his fifty million dollar earnest money back.

What a shame! NOT!

Written by Ernie · Filed Under Daily Commentary