Boosting the Economy—One Big Screen TV at a Time

shopping gone madeEven the most casual observers would believe that the U.S. is making an economic recovery if they saw the hordes descend upon retail stores on Black Friday.

Americans began lining up four hours before the stores opened as early as midnight. And they weren’t shopping just for necessities. Sale of large-screen TVs and video games were up significantly from two years ago. The consumer Electronics Association predicts a 4.1 percent increase in sales over a year ago.

About a third of all American adults shopped on Black Friday, up from slightly more than one-fourth of all Americans a year ago, according to analysts from Goldman Sachs.

About 80 million Americans went into retail stores on Black Friday, according to the National Retail Federation (NRF). These Americans spent about $10.7 billion in retail stores, slightly more than last year, according to research analysts at ShopperTrak. For the three-day weekend, sales were about $20.5 billion. Not included in the ShopperTrak data were sales from major retail discounters, including Walmart and Target. Walmart reported sales up 30 percent from last year.

shopping gone nutsSales were pushed by online purchases. PayPal reports online sales increased 27 percent on Black Friday from a year ago. FirstData says sales from credit and debit cards rose 8.6 percent from last year. Overall, retail and cyber sales are expected to increase 2.3 percent from 2009, to $688.9 billion this year, according to data from the NRF.

But, Black Friday spending isn’t the only indicator of a recovering economy. The non-partisan and impartial Congressional Budget Office (CBO) reports that the Recession that began in 2007 probably ended late last year.

Overall, the economy is up 2.8 percent in 2010, according to the CBO. Bloomberg, Wells Fargo, and Morgan Stanley, plus dozens of others who track the economy also show at least a 2 percent increase this year, with at least a 3 percent increase next year. Even the conservative Wall Street Journal points out the economy is up 2.5 percent, with a 2.8 percent increase predicted for 2011. The National Association for Business Economics, analyzing data collected by 51 professional economists, notes the gross domestic product grew about 2.7 percent this year, and will rise 2.6 percent next year.

In related data, the Dow Jones average, which plunged at the end of the Bush–Cheney years, is up about 10.5 percent in the past six months. The CBO reports that although unemployment is hovering at 9.6 percent, without the Obama Administration’s stimulus plan, unemployment would be between 10.4 and 11.6 percent. By the end of 2011, unemployment is expected to drop to 8.7 to 9 percent, according to several major analysts, including the Wall Street Journal.

Since December 2009, employment in the private sector has risen

by 1.1 million, according to the Bureau of Labor Statistics. About 2.5 million jobs are expected to be added in 2011, according to the American Bankers Association’s Economic Advisory Committee Unemployment, according to the ABA, should decline to about 8.5 percent.

But, there are still almost 15 million unemployed, most of whom saw their companies downsize or send jobs overseas. At the same time that Congressional Republicans blocked extending unemployment benefits, they have protected the wealthiest 2 percent of Americans. Under the Obama plan, individuals earning less than $200,000 a year would continue to receive the Bush-era tax cuts. The cost to protect the rich would be more than $3 trillion over 10 years. It appears that President Obama, under heavy political fire, will yield to the Republicans, who campaigned heavily on a promise to cut spending—except for their own special interests, of course.

walter m. braschRelated to the unemployment problem, more than a million Americans, will lose their homes to foreclosures. The sub-prime mortgage crisis began when government regulators and the Bush–Cheney Administration disregarded numerous warnings and then fell asleep while financial institutions became even more greedy between 2006 and 2009, and lured millions into a false sense of security.

Overall, America is slowly on the path to recovery. But, to those who lost their jobs and then their homes, it just doesn’t seem that way.

Walter Brasch

Comments

  1. Fred Farkle says

    Yes, people have been trying harder to save their pennies all year, and now, at Christmas time, they are going to let loose a little.

    But the problem we face is not taxes too low on rich people, and unemployment benefits too short for poor people. The problem we face is *massive* government spending at all levels. Government in this country is out of control.

    Look at the historical records of tax revenues and compare it with gov’t spending on the same timeline. Government spending has gone through the roof.

    I’m happy for rich people to have extra money – they are much more likely to pay me well, and often. Then, I too pay more taxes, and need less from the government.

    As far as your jabs at the Republicans: rank partisan stupidity, and your history is wrong. Bush warned repeatedly that a mortgage mess was brewing, but the Dem-controlled Congress ignored him. And BTW, there are more rich Democrats in Congress than there are Republicans – but I’m not interested in either party. A pox on both their houses. They both need to cut spending, simplify and cut taxes, and simplify and cut regulations.

    There’s no limit to what the American people can do if the government would only get out of the way and let them get on with creating jobs, wealth and prosperity.

    That doesn’t mean NO regulation, and it doesn’t mean corrupt crony capitalism, either. It means, open HONEST free markets where opportunity thrives for the guy who has a better product or service and can deliver it to the customer.

    History, experience, and common sense have proven over and over again that this approach WORKS. It’s what’s needed in health care, housing, and environmental tech. In every area imaginable, the people outperform the government, when they have the freedom to do so.

    The government is the problem, not the solution. We need a smaller government to set clear, fair, and minimal rules, and enforce them. We need a smaller government to provide military, fire and police protections. We need a smaller government to keep our currency sound and steady. For pretty much all the rest, they need to get the hell out of our way and let us go about our private business, as the founding fathers clearly intended, and as our constitution explicitly requires.

Leave a Reply

Your email address will not be published. Required fields are marked *