Saturday, August 22, 2009

Let’s go to the mall

Let’s go to the mall and pray to the Invisible Hand for help.

Are you sure he’ll be listening, Spot?

Hard to say, but he — the Invisible Hand has to be a “he,” right? — may not be able to help, anyway.


Because the Hand relies on lots of people like you and me — well, like you, anyway — to go out and spend money like drunken sailors when the Hand whispers in their ears. Right now, even people who have money are replying, “Hand, are you nuts? I could lose my job or house at any time, and this rash may not clear up! I’m not going to spend money; you spend it.” But the Invisible Hand doesn’t have any money of his own; no credit cards, either.

The problem is especially acute in the United States’ efforts at economic recovery where worshipping at the mall — the Temple of Conspicuous Consumption — accounts for such an out-sized part of our economy:

The strength of the German and French economic recovery has got to be puzzling the Laissez-Faire economics crowd. As Stratfor points out, the reason is simple. Consumer spending accounts for only 18% of German GDP (as opposed to 72% of U.S. GDP) and Exports account for 46% of German GDP. So in the U.S. the sudden incidence of consumer thrift is a huge problem, whereas in Germany it is not. As I pointed out last month, until we revive our export business and lessen our dependence on the Mall Economy we are in for a ton of hurt. Forty years of Chamber of Commerce cheerleading for globalization and outsourcing have hollowed out the American manufacturing economy. Unless we can quickly build a Green manufacturing capacity for Wind and Solar equipment, this recovery will be anemic and we will continue down to road towards the Sharecropper Society, Warren Buffett warned about.

When the Invisible Hand sees what is going on, won’t he help?

No, grasshopper, Spot is afraid that the Invisible Hand is the grasshopper in the old fairy tale: the one who won’t plan for tomorrow. Which is funny, because conservatives like to paint the grasshopper as lazy; his real problem was the inability to look down the road.

Just like the grasshopper — the one in the fairy tale, not Spot’s grasshopper — the Invisible Hand does not take the long view; he urges people to just buy what feels good today and hang the consequences: to the economy, to the nation’s industrial capacity, the environment, and to society.

Maybe the Invisible Hand is more like Mad Magazine’s Alfred E. Neumann, whispering “What, me worry?” in our ears. Only now, we are worried.

A thump of the tail to techno and NBBooks.

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