Tone-Deaf Headline of the Year Award: CNBC Asks “Have Consumers Gone on Strike?”
Via Atrios, I see the Masters of the Universe are angered by the lack of sales activity. The corporations planned for it and everything, and the consumers are late for dinner! This features one of the worst headlines I’ve ever seen:
Have Consumers Gone on Strike?
Yes, why aren’t consumers fulfilling their Constitutionally required duty of buying whatever Chinese-made crap that our benevolent tycoons put on offer for them?
Citing data showing an unexpected drop in orders for durable goods and other drops in consumer activity, John Carney asks:
What seems to be happening is that businesses have been ramping up their production and hiring in expectations of strong consumer demand.
Consumers, however, have failed to provide that expected demand.
Carney goes on to back-handedly blame the payroll tax cut enacted late last year, saying that no stimulus has come from it because consumers have saved the money from the tax cut.
The words “unemployment crisis” don’t seem to creep into this analysis, or “foreclosure crisis,” for that matter. Even with modestly increased hiring in the past couple months, people who have been out of work for years have debt to pay off should they be fortunate enough to find another job. They can’t get a loan modification either, so they have to prepare for the eventuality of finding a new home. And many of the jobs that are returning are low-wage or at reduced hours. Not to mention how state and city budget cutbacks depress job growth further and deny services to those who need the help to get back on their feet and enter the economy again.
There’s also the fact that runaway debt led to mass suffering for the population in the recent past, and people are mindful of that and being more prudent. This is certainly a “paradox of thrift,” but it’s not a case of consumers “going on strike,” it’s a case of consumers trying to be smart in an environment where they know financial predators will try to take advantage of them.
Consumer spending will come back to pre-crisis levels when people have good-paying jobs, and not a minute before. The fact that financial reporters cannot envision that speaks to how unemployment levels once considered unthinkable have become the new normal. And I agree with Christy Romer, it is shameful:
“I frankly don’t understand why policy makers aren’t more worried about the suffering of real families,” former Council of Economic Advisors Chair Christina Romer, who left the Administration last fall, said during a discussion at Vanderbilt University in Nashville Tuesday. “I think there are tools we have tools we have that we can use, and I think it’s shameful that we’re not using them.”
Romer had been a voice inside the Obama Administration pressing for a larger ecnomic stimulus and more aggressive government action from the early days of the Administration, and she’s continued to make that case from the outside in a New York Times column.
But the sharpness of her criticism reflected deep concern among many Democratic economists about a political consensus that the federal government has to rein in expensive attempts to restart the economy even as rising oil prices again put a damper on growth.
“We need to realize that there is still a lot of devastation out there,” Romer said, calling the 8.9% unemployment rate “an absolute crisis.”
Memo to John Carney: Pay attention. Or I just might go out on “strike.”