Good to know the markets are starting to stabilize. Good to know there are green shoots here and there. But did we have any idea about the disgusting lime-green Brooks Brothers character of those so-called shoots?
My Los Angeles Times yesterday led with the news that the recent rise in consumer spending has two main components, both ominous: (1) purchases by the very wealthiest Americans, and (2) purchases made by much poorer homeowning Americans whose new “disposable” incomes come from the fact that they just recently stopped paying their mortgage lenders. Moreover, writes Times reporter Don Lee, most recent job growth has involved mainly less-skilled, lower-income workers: presumably the casual employees (the word used to be “servants”) of the upper crust.
Read all about it here.
Mind you, I don’t what to be churlish about this. I welcome the return of the overprivileged to their bespoke tailors and private-order cobblers, their art dealers, their yacht builders, their portrait painters, and what have you. Lee reports that home theater systems costing as much as $150,000 have begun moving briskly.
But think about how poisonous this is in the overall scheme of things. Even before the collapse of the past two years, the wealthiest consumers had a disproportionate impact, with 20% of top income households accounting for 40% of all consumer purchases. But now, my dears, a whole lot more of our feeble hopes for some kind of future growth will rest upon the whims of those whom the laissez-faire gods have smiled upon—or even French-kissed. All the others who have gone back to swiping their credit cards are spending their meager savings or even spending on the pure illusion that they’re about to get a job or a raise.
And meanwhile, let it be noted that all possible provisions in the still-pending “financial regulatory reform” bill that might have checked such things as misleading and predatory car loans and payday/cash advance loans offered to the pure illusionists have now been stripped away.
As always, Jeremiah gets it exactly right:
For scoundrels are found among my people;they take over the goods of others.
Like fowlers they set a trap human beings.
Like a cage full of birds, their houses are full of treachery; therefore they have become great and rich—they have grown fat and sleek,
they know no limits in deeds of wickedness. (5:26-28)