Then we came across this surreal column in the op-ed article of yesterday’s NYT
by Daniel Gross. His message is that “the new frugality is a myth — and that's
good for the economy.” He adds, “for this recovery to mature, broaden and
persist, the greatest economic force known to mankind — the American
consumer — has to get back in the game.”
Wow. Talk about playing by the old rules. There was no mention in the article
the fact that with a 70% share of GDP, the U.S. consumer never exactly went
into hibernation, even if spending decisions have changed.
Then he goes on to extol the virtues of debt (what would Kant say?) and longs
for the days when we collectively lived beyond our means: “The renewed
willingness and confidence to spend money we don’t have is vital to the
continuing recovery.”
Huh? And I thought employment and income were the vital components to
sustainable growth.
Then Mr. Gross goes on to say — brace yourself: “Money may make the world go
'round, but credit makes the gears of commerce run smoothly.”
Yes, sure it does. Up until you reach a point where 30% of the population have a
sub-620 FICO score.
But listen to this ... the coup-de-grace: “As the economy slowly recovers, there
are signs that Americans are rediscovering their free-spending ways. Total
consumer credit, which includes non-revolving debt like car loans, have
stabilized, and it rose in both June and July. It’s back to where it was in the
second quarter of 2009.”
What?
CdeR: wow, combine the above with NY Fed VP Brian Sack's comments that lifting asset
prices higher than they would be via Fed asset purcahses "would be a good thing" and you
get a glimpse into the crack addicted economy that is the USA.
