June 04, 2010



The economy is up! Or is it down?
by Jim Hightower

Good news, people! The economy is roaring like a tiger again, so we shoppers are now willing and able to spend more.

I know this is true, because it says so right here on the front page of the business section of my local daily, the Austin American-Statesman. The headline of this AP wire story reads, "Retailers prepare for a shopping rebound." The article reports that as economic recovery spreads and consumer optimism surges, retailers are "tweaking their merchandise" and their prices. For example, cashmere is back on the racks, big wedges of gourmet cheeses are being offered, gold jewelry is replacing that common silver stuff, and $250 sets of Wolfgang Puck cookware are in stock again.

One clear sign of renewed consumer prosperity is that "aspirational" purchases are up — people who downscaled during the Great Recession are now up-scaling. Instead of buying tacky $700 patent leather shoes and $700 suits, they're choosing the $1,500 python skin shoes and $1,200 designer suits.

What's that? You say you don’t pay $700 for shoes, much less $1,500? You say you don't feel any surge of consumer optimism and aren't into aspirational purchases?

Well, don't blame the newspaper. To find an exact opposite take on America's economic condition, just look at two other stories on this same business page. One reports that the U.S. economy now appears to be spinning into a deflationary spiral that could undermine any recovery and further delay new hirings. The other article is headlined, "Missed home payments hit record high, slow recovery."

These two stories directly contradict the happy-news report on the same page. It makes one wonder: Doesn't anyone edit newspapers anymore? Then you remember that papers have been firing hordes of staffers — so, maybe not.

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Copyright 2010 by Jim Hightower & Associates
Contact Laura Ehrlich (laura@jimhightower.com) for more information.