The American Consumer Is Not Back in the Game

Optimistic reports of the recovering American economy, 70 percent of which relies on domestic consumption, overestimate the extent to which consumer spending is on the rebound.

What's the Latest Development?


Optimistic reports of the recovering American economy, 70 percent of which relies on domestic consumption, overestimate the extent to which consumer spending is on the rebound, according to Yale economist Stephen Roach. "Over most of the postwar period, this post-recession release of pent-up consumer demand has been a powerful source of support for economic recovery [lifting consumption growth by an average of 6.1 percent following business-cycle downturns]. ... By contrast, the release of pent-up demand in the current cycle amounted to just 3% annualized growth in the five quarters from early 2010 to early 2011."

What's the Big Idea?

What optimists choose to ignore, says Roach, is the enormity of the consumption bubble that spurred the growth of the late '90s and early '00s. This growth was built on excessive debt loads, underwater mortgages, and woefully inadequate personal savings. When that growth proved hollow, America's consumers found themselves more poorly prepared to recover from recession that preceding generations. "While consumer confidence is on the mend, it remains well below pre-crisis readings. In short, the American consumer’s nightmare is far from over. Spin and frothy markets aside, the healing has only just begun."

Photo credit: Shutterstock.com

Read it at Project Syndicate

Car culture and suburbs grow right-wing populism, claims study

New research links urban planning and political polarization.

Pixabay
Politics & Current Affairs
  • Canadian researchers find that excessive reliance on cars changes political views.
  • Decades of car-centric urban planning normalized unsustainable lifestyles.
  • People who prefer personal comfort elect politicians who represent such views.
Keep reading Show less

How to split the USA into two countries: Red and Blue

Progressive America would be half as big, but twice as populated as its conservative twin.

Image: Dicken Schrader
Strange Maps
  • America's two political tribes have consolidated into 'red' and 'blue' nations, with seemingly irreconcilable differences.
  • Perhaps the best way to stop the infighting is to go for a divorce and give the two nations a country each
  • Based on the UN's partition plan for Israel/Palestine, this proposal provides territorial contiguity and sea access to both 'red' and 'blue' America
Keep reading Show less

NASA astronomer Michelle Thaller on ​the multiple dimensions of space and human sexuality

Science and the squishiness of the human mind. The joys of wearing whatever the hell you want, and so much more.

Flickr / 13winds
Think Again Podcasts
  • Why can't we have a human-sized cat tree?
  • What would happen if you got a spoonful of a neutron star?
  • Why do we insist on dividing our wonderfully complex selves into boring little boxes
Keep reading Show less