This morning I read an editorial by the editorial board of the Muncie Star Press, my local paper:
It’s up to us consumers to save the day by shopping our way out of this recession as we have shopped our way out of many recent economic downturns. And, by shopping wisely and taking advantage of the terrific bargains out there, you’ll at least have something to show for it.
And then I went to my office and read an exact opposite Op-Ed piece in the NY Times by Stephen Roach, chairman of Morgan Stanley:
A decade of excess consumption pushed consumer spending in the United States up to 72 percent of gross domestic product in 2007, a record for any large economy in the modern history of the world. With such a huge portion of the economy now shrinking, a deep and protracted recession can hardly be ruled out…Runaway consumption must now give way to a renewal of saving and investment. That’s the best hope for economic recovery and for America’s longer-term economic prosperity.
Who should we believe, the editorial board of a struggling paper that relies heavily on retailers placing ads in their paper, or the CEO of an Investment Bank who would be more than happy to help us “save” our money?
What scares me the most is the stat that Mr. Roach mentions – about three-fourths of our GDP is consumer spending. That sounds a bit too top heavy, to the point of toppling, to me.
I think we need producers. We need to make something.
Ninety-seven percent of our garments are made elsewhere, and those jobs aren’t coming back. I’m not so sure that gaining a few percentage points back wouldn’t be nice and/or possible, but it probably ain’t happening. So, I’m talking about producers of something else besides garments.
The best scenario I’ve heard is the one put forth by Thomas Friedman for a Green Revolution. Maybe this holiday season instead of spending or saving, we spend to save our natural resources, we spend to save our economy/security from an increasing dependency on foreign oil, we spend to save our planet, we spend to save ourselves.
Instead of seeing another what-to-buy piece on TV or in the paper filled with gadgets and electronics, I would like to see one on how to support the coming green economy.