I just finished reading an interesting article on the front page of http://www.consumerindexes.com/. Talking about how Fear, Uncertainty and Doubt during the election season impacts Consumer Spending. First, there are definitely changes that have taken place in the economy due to the downsizing nature of Baby Boomers, the over extension of the Housing Market to the upside from 2002 - 2007 which needed to be unwound, however this is the first time I've been able to see what Political Finger pointing does to the economy and consumer spending. Probably the one piece of information that was most interesting is how the economy took a nose dive in 2008 during all the Political challenges and then immediately upon Obama getting elected and everyone quit calling everyone names (lets just get along) Consumer spending started to rebound but not until then. The same effect seems to be playing out relative to Consumer spending and this mid-year election. The only challenge is that the highest office in the land isn't going to change this November so the Optimism might not be quite as exuberant in the economy as the last time around... We'll have to see...
Obviously we have been in a deleveraging economy since sometime in 2007 when we all started to notice that homes weren't being purchased as quickly and prices were starting to decline. Since a high percentage of consumer spending was tied to home equity lines as well as the flipping for homes by speculators its unlikely that the expanding consumer pocketbook will get wider anytime soon for obviously reasons, high unemployment, layoffs in both the private and public sector, skyrocketing debt at both the municipal and federal level and obviously consumers defaulting on mortgages at a very high rate, however its interesting to see how our Politicians are actually making it worse and not better.
Comments(3)