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Surprise! Retail Sales Are Total Debacle
Late last week, when December payrolls showed the leisure and hospitality industry shed nearly a half million jobs, I suggested the read-through for consumer spending was not good.
While it's common sense that people who lose their jobs will be reluctant to spend money, it goes beyond that. In America's services-driven, consumption-addicted economy, "the people providing the services for meager wages are in most cases the same people consuming them when they’re not providing them," as I put
Excellent graphic up top!
Yeah, a perfect capture of the state of the American system.
Unfortunately for all of us, broken windows can only be replaced. What the replacement window is, no one knows. Dicey and dark times. We had a good thing and let it all slip away. Though I don’t believe in historical determinism, looking back over the trajectory of the last 40 years, it seems inevitable. I’ve been seeing our unfolding as a comeuppance.
The Fed is one institution that hasn’t been attacked (however this is to be interpreted) yet. Let’s hope they can somehow stand immune from the impulses of demagogues. It’s granted they they have played a role in our unfolding. As yet, they are, and will continue to be, an institution required to function for us to avoid a financial depression.
Perhaps, as there is so much focus on the Constitution, and the Fed is a 20th century creation, the Fed can remain unscathed until we can grow out from under the depression we are in.
Operation Eagle Claw, April 1980. Had it succeeded, would the trajectory have been different?