‘Twas the morning after Thanksgiving, and all through the town, the consumers rumbled, as prices came down.
Another Black Friday has come and gone. But it didn’t leave without making its presence felt. For those who don’t know, Black Friday is the first official shopping day of the holiday season. Who decides that is beyond me, but it’s hilarious nonetheless. Hundreds of bleary-eyed, turkey-filled shoppers lined the streets of retail stores in the wee hours of the morning. Why? For the sales, of course.
Black Friday signifies when retail owners’ sales first begin to make a profit (i.e. go into the black). It’s also a dynamite opportunity for those retailers to bombard consumers with sales, all under the guise of holiday altruism. So all around the country prices are slashed, deals are championed – and the people come.
But this year was notably different. Shoppers were, for the most part, on the defensive. Instead of entering stores with blank checks and open minds, they were deliberate; they knew exactly what they were doing and where they were going from the moment they left their homes, like a wife who expects her husband’s up to no good.
That’s not to say this is completely a bad thing. After all, people with $3,000 in unpaid credit card debt shouldn’t be out buying 40-inch LCD TVs. Still, this shift in spending behavior speaks loads about the state of our economy, and of our collective consumer psyche.
The only thing less trendy than Duck football right now is the U.S. dollar. While everyone was out shopping the dollar was busy falling to its lowest value ever, compared to the euro. This has serious short-term ramifications, as we will undoubtedly face a barrage of annoying jokes from trash talking Europeans. I can just hear them now: “How many Americans does it take to manage an economy?” “What’s the difference between a dollar and a stuttering nun?” “China called. It wants its Yuan back.” Yet there’s more to it than simply being on the butt-end of a cultural smack down. We’re in the midst of a very real economic slide. “The times they are a-changin’,” someone once said. I think it was Alan Greenspan.
Do you remember the days after Sept. 11, 2001 when President Bush addressed the nation and told us we should all go shopping? It struck some as a little cold at the time. But it made perfect sense. After all, that’s how our economy works: spending $549.97 on a Playstation 3/Guitar Hero superpack is like making a small investment in our nation’s future. Disposable income is the name of the game.
Which takes us back to Black Friday. Though early figures showed a modest increase in returns over last year, retailers had to sell more goods to realize this. Prices were cut so far that, for all the sales retailers made, little of it was actual profit.
The bottom line is simple: Americans just don’t have as much disposable income as we’re used to. When housing prices were rising in the early 2000s, homeowners with bad credit scores were forced take out sub-prime loans with interest rates that skyrocketed after two years. Then the bubble burst, and the housing market collapsed, forcing the Federal Reserve to cut interest rates. Throw in the rising price of gas, and it’s easy to see why many consumers are keeping their hands near their pockets this holiday season. Poor shoppers. Poor economy. Poor president.
Two weeks ago, Bush compared congressional spending to “a teenager with a credit card.” Yet for most of his administration he’s been funding two wars with borrowed money. Fighting in Iraq and Afghanistan costs an estimated $2 billion per week, and our current trade deficit stands above $9 trillion. But complaints of fiscal irresponsibility aren’t going to keep the administration from writing blank checks with money they don’t have. It’s no wonder he wants nothing more from us than to shut up and shop. So who’s acting childish now?
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