Sunday, August 03, 2008
by Larry Geller
At some point, I believe, the Chinese consumer will pretty much replace the American consumer. American companies (who no longer manufacture much here) will find that they no longer need to target an impoverished public because, other than food and fuel, consumers have few resources left for companies to tap.
The companies have no more jobs for Americans, and they couldn’t care less. In fact, CEO bonuses depend on getting rid of American workers, or haven’t you noticed? But no jobs, no consuming. So time to look overseas.
And what will become of the American consumer? Why should the rich folks care.
That’s a theory. Watch for evidence. For example, this snippet from globalresearch.ca:
It is worth noting that over 70% of the US GDP is consumer spending and that the entire Federal Reserve strategy of Alan Greenspan after the March 2000 collapse of the stock market bubble, was to bring US interest rates to their lowest levels since the 1930’s in order to stimulate consumer spending on credit, i.e. debt, to avoid "recession." Note the scale of the following store closings across America in recent weeks:
Ann Taylor closing 117 stores nationwide.
Eddie Bauer to close more stores after closing 27 stores in the first quarter.
Cache, a women’s retailer is closing 20 to 23 stores this year.
Lane Bryant, Fashion Bug, Catherines closing 150 stores nationwide
Talbots, J. Jill closing stores. Talbots will close all 78 of its kids and men's stores plus another 22 underperforming stores. The 22 stores will be a mix of Talbots women's and J. Jill.
Gap Inc. closing 85 stores
Foot Locker to close 140 stores
Wickes Furniture is going out of business and closing all of its stores. The 37-year-old retailer that targets middle-income customers, filed for bankruptcy protection last month.
Levitz - the furniture retailer, announced it was going out of business and closing all 76 of its stores in December. The retailer dates back to 1910.
Zales, Piercing Pagoda plans to close 82 stores by July 31 followed by closing another 23 underperforming stores.
Disney Store owner has the right to close 98 stores.
Home Depot store closings 15 of them amid a slumping US economy and housing market. The move will affect 1,300 employees. It is the first time the world's largest home improvement store chain has ever closed a flagship store.
Macy's - 9 stores closed
Movie Gallery – video rental company plans to close 400 of 3,500 Movie Gallery
and Hollywood Video stores in addition to the 520 locations the video rental chain closed last fall as part of bankruptcy.
Pacific Sunwear - 153 Demo stores closing
Pep Boys - 33 stores of auto parts supplier closing
Sprint Nextel - 125 retail locations to close with 4,000 employees following 5,000 layoffs last year.
J. C. Penney, Lowe's and Office Depot are all scaling back
Ethan Allen Interiors: plans to close 12 of 300 stores to cut costs.
Wilsons the Leather Experts – closing 158 stores
Bombay Company: to close all 384 U.S.-based Bombay Company stores.
KB Toys closing 356 stores around the United States as part of its bankruptcy reorganization.
Dillard's Inc. will close another six stores this year.
For anyone familiar with American shopping malls and retailing, this represents a staggering part of the daily economic life of the nation, from furniture stores to clothing to video rentals to leather. The process has only begun and neither major party Presidential candidate has dared to mention this on the ground economic reality, because they evidently have no solutions to offer that would not jeopardize their campaign finances. Obama is tied to not only Pritzker but also to Omaha billionaire, Warren Buffett and George Soros. McCain depends on the traditional money contributions of the Republican Party which demand permanent tax reform for highest income earners and a pro-bank laissez faire treatment of millions of homeowners facing home foreclosure and asset seizure by banks.
Banks across the country have severely cut back on loans, fearful of bad debts. That has aggravated the consumer collapse documented above. Hundreds of thousands of real estate brokers, small and large bankers, furniture workers and salespeople, and construction workers are unable to find work. Jobs are being cut wholesale and those working are often on reduced hours. Car sales in June plunged by 28% for Ford, 18% for General Motors and even 21% for Toyota which will mean more layoffs in coming weeks. This will be the next wave of unemployment.
The economic reality is not reflected in official US Commerce Department or Labor Department statistics. There the data is constantly being "revised" to hide the grim reality in an election year.
You won’t find this kind of news in many local newspapers, either. Long live the Web.
I refuse to buy the Advertiser.When I'm going home at 4am,I may have to make 3 or 4 stops to find the Star- Bulletin,but I will NOT give Gannett ANY $$
The death of "Consumer Nation" is in the early stages. It will be interesting to see all the piled up corpses come 1st quarter 2009.I wonder what national sport will replace shopping, now that we are limited to purchasing food and fuel? We will be riding the two wheelers while the emerging economies take on our unwanted suv's.