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January 06, 2009



"The simple answer-well there isn't one."

I disagree. My sense is that people are finally starting to see that "conspicuous consumption" isn't helping. Or, rather, it's helping the wrong people.

The banks and the car manufacturers have told us that they mismanaged themselves. They over-leveraged their savings, produced things nobody wanted, offshored jobs (which limited their customers), and treated customers like an inconvenience.

And the government gave them taxpayer money. We wouldn't buy their garbage, so our future money has been given to them (thank you, Congress) without our getting anything in return. And don't forget that the banks have been dropping credit scores just because the economy's bad.

So, why is nobody buying a car? Maybe because the money goes through retailers and bankers, who add no value but take an enormous cut. Maybe it's because people are starting to realize that they might not have the money to pay off the loan in a year. And hey, maybe it's because we've been told for ten years that we need to cut down on our spending--good advice, no less.

The good news is that, if I'm right, then maybe we can have a real economy with strong, consumer-oriented manufacturing again, instead of an economy that's built around the idea of making money look like more money.

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