These guys must be smoking the same stuff that Alan Greenspan smoked when he celebrated the virtues of variable rate mortgages, assuring us around the same time that inflated home values constituted “wealth.” The quotation marks around that word are ours, since we doubt the former Fed chairman was using it ironically. Nor, we surmise, was he being ironic when he spoke of a supposed boom in capital investment at a time when household savings growth was negative. I’ve repeated this point numerous times, since I still find it dumbfounding that a guy with his academic chops could have said stuff like that. What a tragedy for the world that he did not pursue his calling as a jazz musician. In 1943-44 he was a promising clarinetist studying at Juilliard -- playing with a young Stan Getz, no less!

Alleged Roast Beef

The Wall Street Journal’s steadfast support for rampant consumerism nicely complements the economists’ desire to see us spending mindlessly again. The Journal doesn’t much care what we buy, as long as it puts cash in someone’s till. They once did a lengthy article on profitability problems that for a while plagued Subway sandwich franchises. Nowhere did the reporter who wrote the article think to mention the Subway sub itself, which in a place like Atlantic City that serves real subs, ranks right up there with Arbee’s “roast beef” sandwich and Long John Silver’s seafood.

As a result of our failure to spend, spend, spend, retailers are more glum than ever. The big chains don’t even see the possibility of an upturn before next spring. Let’s hope for their sake that the spirit of the Easter bunny returns with a vengeance. The fact is, Americans are holding back on spending because the money isn’t there. Economists seem to think that because the household savings rate shot up in the last few months, Americans must be hoarding cash. Get real, you guys. Other than buying big-screen televisions to take the place of other, more expensive forms of entertainment, Americans are not in a spending mood. How could they be when so many Baby Boomers are sifting through the ruins of their retirement plans, wondering how things could have gone so horribly wrong? If shopping on credit is what passes for economic recovery in this country, consumerism will be dead for the next 50 years.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Friday, 21 August 2009 | Digg This Article