Wednesday, December 10, 2008

HOW CAN THE CONSUMPTION ECONOMY SURVIVE WITHOUT CONSUMERS

Who is going to be buying cars?

Answer to that – very few. So bail out the auto industry – and It will happen – and they will find themselves right back in trough again because they can’t sell as many cars as they once did. Do we really think people are going to be traveling all over? No they can’t afford to and wait until the credit card companies cut up to 40% of the available credit of consumers. The consumer is already cut off from home equity, refinancing and will emerge regardless of bailouts hobbled at best. Well what does that do to the consumption economy businesses depend on. Yes a car wreck no matter what.

I use the car wreck analogy because as businesses like the auto industry, which is topical, are bailed out, even if you and I don’t agree, the consumer certainly isn’t going to be out buying cars and worse many just can’t. Consumers now suffer from 30-60-90-120 day lates on their credit reports. Consumers are unemployed and with an Obama program of “Great Works” the consumers supporting the economy will find themselves under employed even if they go build bridges and roads. May be great for job numbers and political equity but overall for the economy it will fail to meet the massive waves of chaos that have hit our shores and will continue to drown many industry sectors.

The government is saying this will tighten the belt – it will get worse – and this process will expunge the nation’s credit addicted consumers and bad debts. Really? So you do that and tens of millions of consumer emerge with their credit destroyed and wouldn’t qualify to use credit to purchase anymore. What do you do about that. NOTHING! There are few big ideas, including my rants, that would seem to attack the deficit (our cancer) and the various symptoms to correct our course in history. And by every measure this is historic and will be remembered as the depression of the 21st century. We feel better saying deep recession but it’s a farce. Consumers are the lifeblood of the economy and they are affected the worst.

Yes everyone is culpable – consumer – bank – credit cards etc.. in this massive upheaval, but that is yesterday. No matter where go – There you are! So we are here and watching the corpses of our consumers rotting on the credit battlefield as big business and our government just run right over them. Mark my words a stimulus package – with pandered money – with small checks to consumers will happen. Appalling – that is a waste of money for sure. What about the consumer having credit expunged so they can get credit, having all Americans consolidate debt under one payment (huge surge for banks) so the toxicity of the loans and portfolios isn’t as bad, economy bonds in exchange for some taxes (Japan was a saving nation which saved their financial industry from total wipeout),the 10 percent solution for the deficit – on and on. You thankfully allow me to rant therefore I have a voice – just as you do – can’t we together do something to impact this? Let’s see.

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