According to the various news sources, Black Friday was a downright cash-cow. Some sources said record breaking. Presumably this weekend is more of the same, both in stores and on the Internet, although today was supposed to be Small Business Saturday and I really hope that went well. Monday is Cyber Monday, and by all accounts retailers should be burping loudly by Tuesday.
I got to thinking about this and I'd like to make a prediction. The US is in a depression. They tell us that unemployment is "hovering around 9%" or so, and, using the Great Depression as a comparative guide, that just ain't so. During the Great Depression, anyone (OK, any man, since Rosie doesn't get hired until WWII) between the age of 18 and the age of retirement that did not have a job was considered unemployed. Period. Today, that simply is not the case. You might already have a sense of all this, but that 9% or so they keep droning on about represents the number of Americans who are receiving unemployment benefits. They make it sound like this static group of people who cannot find work but it ain't so.
Unemployment benefits in the US were extended to 99 weeks--almost 2 years!--and for many that 99 weeks has come and gone. Once their off the unemployment rolls, they are no longer counted in the unemployment number. Still buying that 9%? There are also factors like underemployed, etc., but the formulas and data they use to present current unemployment figures simply ignore a lot of this "reality" nonsense, allowing your favorite media to just keep repeating the 9% number, give or take, to keep things calm.
The other issue here, and I don't have links or data at the ready but I don't think this is much of a stretch, is that most just do not have surplus cash floating around. I know a lot of small businesses in this area, including ours, that go from pay period to pay period hoping the business climate will improve. None of us dare by capital equipment, etc., or otherwise stick our necks out--even a little. Meanwhile, national statistics say that 1 in 7 adult Americans is on public assistance, and 1 in 4 (yep, FOUR) American children is on public nutrition assistance. There are probably numbers to be had on the number of underwater mortgages, etc., and other data that shows we're not the land o' plenty that we're supposed to be. Don't get me started on the national debt.
Given all this, we have a record-setting Black Friday on our hands, probably followed by a few more days of retail bliss. So, given all of the aforementioned economic woe, how can America pop out of its current depression for a few days to scarf up all those retail goods? (This year even gets bonus points for pepper spray and even a shooting on top of the usual mayhem.)
My prediction here is that come March, 2012, the end of the first quarter of the new year, it's going to be really hard to polish the turd that is our economy. My guess is that this "record setting spending" is in fact a glimpse of people parting with whatever spare cash they had left, and running up credit cards (you'd think the hard lesson would have set in more by now?) as a sort of swan song buying binge. Yes, the advertised deals looked to be pretty amazing, and the smart shopper probably did really well over the course of this holiday weekend. The question is...did they have any business going out at all? My guess is that, for many, the answer is no. They should have stayed home, taken stock of what they had, and circled the wagons accordingly. However, we've been conditioned for many years to buy and consume, and my observation is that this Black Friday is stoic proof of how many Americans can not or will not back off from those impulses.
So assuming Black Friday, and now through the Christmas holiday, hangs in there as happy retail time, what happens in March 2012? Elaborating on my prediction, I think what we're going to see is a look back to this Black Friday, realize that America popped a cork they could not afford to pop, and know this to be a fact because retail numbers for that first quarter are going to be grim if not abysmal. The holidays are over; there is no more cash in the coffee can, and the credit card bills are coming in. Desperate retailers might find themselves trying to keep floating sales and unbelievable deals, but America won't have many sitting on the bench ready to go into that game. What happens then? I have friends who do commercial real estate and 100% of them have been, and continue to as needed, lowering the rent for the tenants because there is no one standing in line to fill that space and even a little income is better than no income. How low can they go?
I don't like it. It's bad enough that the true meaning of Thanksgiving and Christmas have been almost completely obscured by commercialism, but I just have this creeping feeling that Black Friday, 2011, may go down in history as Binge Black Friday that tipped America over some kind of edge. Let's hope I'm wrong.
Dave
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