A Potential Silver Lining - The American Spectator | USA News and Politics
A Potential Silver Lining
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There isn’t much good news in the latest economic indicators. Employers shed 533,000 jobs in November, driving the unemployment rate up to 6.7 percent, the highest in 15 years. Meanwhile, retail sales dropped for the second straight month. But one of the drivers of the dire retail sales was a slow down in credit card purchases. As I’ve written before, in my view, America’s instant gratification culture was at the heart of this crisis, so though it may hurt retailers in the short-term, I think it’s better in the long-term that Americans are slowing down their purchases of stuff that they cannot afford. Also, what you see here is markets working. People are spending less because they either have less money, they are uncertain about their future, or credit is harder to come by. What this means is that the overwhelming majority of  Americans who won’t lose their jobs will end up accumulating more savings, eventually reaching a point at which they are more comfortable spending money, especially when stuff around their house starts breaking down. This is just one of the many ways in which the business cycle works itself out, meaning that the best solution to the economic crisis is for the government to do absolutely nothing. Unfortunately, that’s the one option that’s politically unacceptable.

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