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Guest Post: That Which Is Too Fearful To Speak: The Demise of the Consumer Economy

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Submitted by Charles Hugh Smith from Of Two Minds

That Which Is Too Fearful To Speak: The Demise of the Consumer Economy

The consumer-debt-based economy is doomed; good riddance. It was nothing more than an elaborate cargo cult based on marketable anxiety.

The consumer-debt-based economy is toast, but everyone's too terrified by its demise to acknowledge this reality, never mind consider a new model. The entire creaking economy is based on a few ideas which no longer work:

1) Create "aggregate demand" (i.e. consumer demand, which then creates business demand) and the economy "grows," people are hired and get paid, and that's good.

2) When consumer demand slumps because people are over-indebted and can't afford to buy more of anything, then "stimulate" demand with massive Central State spending to replace the vanished private demand.

3) Demand is endless. You can never have enough stuff, food, vacations, education, healthcare and toys. Give people free money, or the ability to borrow nearly-free money, and they will spend, spend, spend. This creates "growth" which is always good.

A funny thing happened on the way to the infinite demand/consumption model--or actually, two things:

A. People borrowed all they could afford, and then borrowed more. Now they can't borrow any more, even if the interest rate is low. By some estimates, American consumers need to pay down $4 trillion in debt just to restore the income-to-debt ratios of the early 1980s, never mind the early 1960s.

B. Infinite demand met marginal return in a dark alley, and infinite demand is in the gutter, whoozy and bleeding profusely.

That horrendously costly master's degree has only a marginal return in the real world--or perhaps a negative return.

That expensive McMansion provided no better shelter than a much more modest home, and its investment return is atrociously negative.

That $120,000 5-day stay in the hospital paid by Medicare didn't fix the health problem; it made it worse, because the patient didn't need hospitalization or the procedure, and the previously moderately-ill patient caught a drug-resistant bug in the hospital and is now very ill--and therefore needs more treatment at $120,000 a week (this was the actual bill for my friend's father's 5-day stay in a hospital, a stay he was forced into accepting lest he be a "bad patient." He could have easily been treated in an out-patient clinic.) Nice return on a $120,000 "investment" to meet the "infinite demand" for sickcare.

You see the point: "investing" disposable income in debt service to borrow more money to blow satisfying "infinite demand" has left consumers over-leveraged and insolvent, crushed under impossible-to-pay debt loads, while all that debt-fueled spending has yielded increasingly marginal returns.

The amount of debt that can be leveraged has diminished to near-zero, and so has the return on that spending.

There's another deeply pernicious facet to a consumer-based economy: our identity and meaning now flow from consumption, not from production or inner resources. I spent a considerable amount of Survival+ explaining how marketing and consumption are two side of the same coin.

The marketing complex has hijacked our sense of identity by engendering a deep, soul-destroying anxiety that only buying more stuff can assuage: since we are judged and valued solely by our purchased externalities, we are constantly in danger of being rendered worthless if we fail to measure up to the current metric of brand-group identity (wearing all black and a tattoo for one "brand," a BMW and designer clothing for another, reading the New Yorker and claiming to only wear vintage clothing for another, etc.)

What we do in the real world is simply part of the "brand" which we must project, or cloak, to sooth the gnawing anxiety that is the bedrock of a consumer society. The iconography and totems of consumerism define our identity, our strivings, our sense of purpose and our experience of meaning: what I call the politics of experience, a phrase coined by R.D. Laing.

Consumption is our god, our faith and our religion. Like a cargo cult dependent on a magical connection to prosperity, we are terrified by the prospect that our religion is based on a false god--that is, that consumption and consumption alone leads to prosperity and happiness.

Like a cargo cult that we mock in our infinite industrious superiority, we worship the equivalent of rocks painted to look like radios that we can use to "call" the gods of endless prosperity.

This rock that's painted to look like a radio is called "debt," and we call upon it to magically provide us with prosperity from over the seas.

This other rock that's painted to look like a radio is called "aggregate demand," and it's carefully worshipped by a special troop of voodoo-wielding witch doctors called Keynesians.

We are chanting magical phrases to these rock-painted "radios," pleading for a return to easy prosperity, but nothing's happening. We fear the magic no longer works, and that possibility terrifies us so much we can't even bear to speak of this loss.

The consumer economy is expiring for two good reasons: we borrowed too much and will never be able to pay it back, never mind borrow even more, and we have too much crap and useless services as it is. Instead of paying people to dig a hole and then fill it, we give millions of tests that serve no real function other than to bill Medicare or the provider.

An economy can only sustainably spend what it generates in surplus. The U.S. has been exchanging paper with funny green ink on it for real stuff, far in excess of the surplus generated by our own labor and production. That is our trade deficit. To extend "aggregate demand" to the moon, we borrow trillions of dollars via Federal deficits to fill the gap left by imploding consumer borrowing. This is not spending a surplus we have earned, it is borrowing against future surpluses, surpluses of national income which we are now committing to debt service.

Future generations won't get to spend their surplus; they will have to devote it to servicing the debts we have gaily borrowed and blown on digging holes and refilling them, part of our worship of the magical painted rocks of our false and hollow religion, Consumerism.

By degrading ourselves from producers to consumers, we have not only lost our identity and our meaning, we have lost the ability to create surpluses and invest those surpluses wisely.

My new book An Unconventional Guide to Investing in Troubled Times is an attempt to chart a path from the anxious, unhappy dead-end of consumerism back to a decentralized, self-reliant productive economy.

That is the transformation that terrifies the Status Quo, for it is a transformation for which there is no model of control and exploitation: the demise of the consumer economy and the rise of a productive economy with no need for Wall Street or rocks painted to look like magic radios.


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Mon, 08/01/2011 - 11:05 | 1512635 Debtless
Debtless's picture

Quick let's bomb something!

Mon, 08/01/2011 - 11:08 | 1512649 anynonmous
anynonmous's picture

In the Apple store yesterday I saw evidence of the demise of the consumer economy. I only had to wait in line for 15 minutes to by an accessory for my iphone.

Mon, 08/01/2011 - 11:12 | 1512669 Conrad Murray
Conrad Murray's picture

Far worse is the evidence of the intellectual demise, the existence of Apple stores.

Mon, 08/01/2011 - 11:22 | 1512703 anynonmous
anynonmous's picture

they are quite a spectacle those stores, this one is in a mall (that was also  packed with demised consumers) it took 2 minutes just to push my way to the 'genius bar' and you're  correct the fact that you have all those morons who don't even know how to upgrade the OS so they have to go to the store for help

Mon, 08/01/2011 - 12:00 | 1512948 azzhatter
azzhatter's picture

and especially that a functioning human being would want to spend a sunday there

Tue, 08/02/2011 - 01:16 | 1515809 StychoKiller
StychoKiller's picture

I want me one of them painted-rock iPads (iRocks?)  :>D

Mon, 08/01/2011 - 11:31 | 1512749 Sudden Debt
Sudden Debt's picture

And you still bought it?

I only buy 30 minute waiting line stuff. Just because it's better quality. Why buy stuff that not everybody wants...


Mon, 08/01/2011 - 11:29 | 1512725 Sudden Debt
Sudden Debt's picture






Mon, 08/01/2011 - 12:07 | 1512982 Kayman
Kayman's picture

The tipping point is when Obama is awarded the Nobel Prize for Economics, summer 2012.

Mon, 08/01/2011 - 11:37 | 1512780 midtowng
midtowng's picture

Isn't BofA foreclosing on homes just to tear them down? Sounds like digging a hole to fill it back in to me.

Mon, 08/01/2011 - 11:54 | 1512900 snowball777
snowball777's picture

More like digging a hole then squatting over it for a sufficient amount of time to fill it.

Mon, 08/01/2011 - 14:06 | 1513522 narnia
narnia's picture

a testament to central planning efficiency: a perfectly livable home is bulldozed to make way for a state park to provide a lawn for a homeless person to sleep on because the tax benefit from deducting the land to the profitable loss covered bank was greater than the future value of its Section 8 revenue less property taxes, insurance & administration.  

Mon, 08/01/2011 - 13:00 | 1513242 toady
toady's picture

Lets bomb something?

How about consumers?

I was late to the game on this one. I wasn't aware of the 'consumers are 70% of the economy' number until W was saying 'everybody go shopping' after 9/11.

I guess I'm old school, but I only buy what I need, I try to save up for large purchases, and pay off my credit cards every month. To do otherwise is financial suicide.

Bomb the consumers!

Mon, 08/01/2011 - 15:48 | 1514127 dolly madison
dolly madison's picture

Yeah, I was mostly not good for the consumer economy either.  I did have a brief spendfest right after I got done with college, and had some good money for the first time.  But mostly I enjoy frugality.  Keeping up with the Jones' stresses me out. 

Mon, 08/01/2011 - 13:18 | 1513351 Haole
Haole's picture

Right you are, unfortunately it is ongoing figuratively and could likely take place literally within U.S. borders any day now...

Mon, 08/01/2011 - 11:06 | 1512638 km4
km4's picture

Published: July 16, 2011

We're Spent The old US consumer economy is gone, and it’s not coming back

THE notion that the United States needs to begin moving away from its consumer economy — toward more of an investment and production economy, with rising exports, expanding factories and more good-paying service jobs — has become so commonplace that it’s practically a cliché. It’s also true. And the consumer bust shows why. The old consumer economy is gone, and it’s not coming back.

We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.

Mon, 08/01/2011 - 11:33 | 1512719 CrashisOptimistic
CrashisOptimistic's picture

Welcome to the post Peak world.

A consumer society can't exist at $118 Brent.  That's just the way it is, has been, and will be for the fairly short period of time remaining for "modern" society.

You'll know that it's time to leave town and find a farm labor job in Iowa the day that a Chinese frigate stops a Nigerian tanker enroute for Houston and makes use of no force, particularly, other than to detain the ship long enough to close the deal on offering them 20% more for their cargo than Houston is paying and diverting the ship to Shanghai.

When that ship diverts to Shanghai, get away from the cities.  No US president can permit a cutoff of US oil imports, even if it does not happen by force.

It won't be much longer for that, either.

Mon, 08/01/2011 - 15:01 | 1513868 Marco
Marco's picture

What comparitive advantage does the US have for production exactly?

Mon, 08/01/2011 - 19:08 | 1514751 thewhitelion
thewhitelion's picture

I think our big advantage is in producing coffee.  If not, I should have scheduled my economics class for later in the day.

Mon, 08/01/2011 - 11:06 | 1512642 Tense INDIAN
Tense INDIAN's picture

Consumer economy in Europe and America gone ....what will happen to the Indian IT now...

Mon, 08/01/2011 - 11:17 | 1512683 falak pema
falak pema's picture

you will change your pseudo and become 'relaxed indian'! 

Mon, 08/01/2011 - 11:06 | 1512643 no2foreclosures
no2foreclosures's picture

What is a cargo cult?

Mon, 08/01/2011 - 11:22 | 1512707 Bastiat
Bastiat's picture

Wikipedia is your friend!


Mon, 08/01/2011 - 13:30 | 1513424 Mr Kurtz
Mr Kurtz's picture

Surely you jest!

Mon, 08/01/2011 - 13:48 | 1513515 Mr Kurtz
Mr Kurtz's picture

Surely my friend, you jest!

Mon, 08/01/2011 - 11:08 | 1512644 Cognitive Dissonance
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That is the transformation that terrifies the Status Quo, for it is a transformation for which there is no model of control and exploitation: the demise of the consumer economy and the rise of a productive economy with no need for Wall Street or rocks painted to look like magic radios.

But make no mistake about it, the scociopaths will try to control it. And if they can not control it they will destroy it.

BTW my latest article, which is about addiction in all its forms.

Mon, 08/01/2011 - 11:16 | 1512681 GeneMarchbanks
GeneMarchbanks's picture

Somehow overseas 'enemies' are a much easier way for the Status Quo to redirect the rage. It will be attempted no question and we'll see if it works. Keeping this domestic is half the battle, I mean, look at Greece. They are inbetween right now. They've diagnosed the problem in their system yet still are falling for the 'Get Goldman' nonsense. We know they won't bring down Goldman, but maybe they can get some citizen representatives who won't make room for banks to bribe them within their governement. So that's my little dream for today...

Mon, 08/01/2011 - 11:18 | 1512689 baby_BLYTHE
baby_BLYTHE's picture

great piece, CD.

Everyone I know (ages 19-29) has no net savings, most our in debt and the others live paycheck to paycheck (if they even have jobs).

The problem with our economy is there is no incentive whatsoever to save. QE to infinity, zero interest rates, decline wages, offshore manufacturing and run-away cost of living are being felt FULL FORCE right now.

I can't imagine it being any worse, but get worse it shall. I don't even know why I am in college, as I do consider it worthless for the most part. The only reason I decided to stay is because I am having fun, have a great group of friends, am working at a pretty decent job on campus, am able to save and have no debts (thanks to the multiple academic scholarships I got out of High School).

The economic system is totally broken. The understanding of credit/money/savings/capital/investment has been totally botched by the entirley flawed economic system we have been living under for the past several decades. Like many here said before, it must get a lot worse before it gets any better.

Mon, 08/01/2011 - 11:28 | 1512731 Cognitive Dissonance
Cognitive Dissonance's picture

I agree. It will probably get much worse before it gets better. But bottom line we can choose our own bottom. We can say stop.

But as long as we choose to see ourselves as victims of 'the system', powerless to do anything but go with the flow, the bottom will be rock hard and very ugly.

Mon, 08/01/2011 - 11:34 | 1512759 Zero Debt
Zero Debt's picture

An indirect effect of people living paycheck to paycheck is that they become dependent on the system and hence will seek to defend it. Like a "Stockholm syndrome" but you don't even know you're a captive.


Mon, 08/01/2011 - 11:34 | 1512764 GeneMarchbanks
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'Everyone I know (ages 19-29) has no net savings, most our in debt and the others live paycheck to paycheck (if they even have jobs).'

I've observed this also. Yet who do you blame? Or a better question: who sets the morale amongst US youth? Hollywood? Family? Popculture? As always things get more complex the deeper you dig but there is certainly isn't an easy answer.

I'm reminded of that quote from The Coming Insurrection: 'the future has no future.' If you're 19-29, indeed.

Mon, 08/01/2011 - 11:54 | 1512897 Cognitive Dissonance
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Yet who do you blame? Or a better question: who sets the morale amongst US youth?

Same question. It seems we have oursourced the rasing of our children to the boob tube and popular culture. Since we are no longer responsible for the product of our loins (because we oursourced it stupid) it can't be us.

So we are all victims. Help. I've fallen and I can't get up.

Mon, 08/01/2011 - 11:56 | 1512916 snowball777
snowball777's picture

Yet who do you blame?

Their ersatz parents. These are learned behaviors.

Mon, 08/01/2011 - 17:39 | 1514509 Cathartes Aura
Cathartes Aura's picture

why on earth are you looking for someone to blame?  the poster admitted he/she was content with the choices made, and why do people in that age group think there should be "net savings" while they're in school?  if they're in debt, they've made a choice to be "there" - that's an age group where choices are great learning tools, as they have consequences.

speaking from a personal space, when I was in my 20's I chose not to "get a paycheck" but to live creatively, with others of the same ideals - the experience "took" and the whole consumer-identity just didn't apply to me/us. . . granted, I wasn't in amrka for my 20's, so wasn't subjected to the constant conned-sumer propaganda - but moving back & witnessing firsthand how immature it is to go into debt for TOYS, or to conform one's appearance to dumbed down standards, I can honestly say I'm content with my life choices.

no one's to blame for any one's personal choices, self-responsibility is a mark of maturity.

Mon, 08/01/2011 - 13:09 | 1513312 Iam_Silverman
Iam_Silverman's picture

"The problem with our economy is there is no incentive whatsoever to save."

Wrong.  What you are implying is that there is no monetary reward for savers.  Once you have lived in a situation where no savings exist and every small occurrence can be made into a larger tragedy, you now have incentive to save as an adult.  I would love to have more return for my savings - but because I am not getting over 1.5% doesn't mean that I will blow it all.  I still see the need for an emergency nest egg should something happen (here on the ranch lotsa stuff breaks - ever replace a clutch on an older tractor?).

Mon, 08/01/2011 - 15:32 | 1513370 baby_BLYTHE
baby_BLYTHE's picture

What I am implying is that the FED and Government are 'hammering on a string' trying to force people to spend their money as quickly as it is earned in effort to stimulate the economy. Thus, having an negative incentive upon consumers which alters economic behavior on the whole

Yes, you are correct there are no monetary rewards which was a large part of my point. Over a long enough period of time however, it has been going on for well over a decade, the economic behavior of individuals change leading to malinvestment and distortions in the economy. In the long-run this is very damaging to the economic system at whole, which is where we find outselves today. That is why we have high unemployment, declining real wages and record levels of consumer debt to which I argue cannot be reversed until the system is purged, debt and malinvestment is liquidated and the ENTIRE economy restructures.

Mon, 08/01/2011 - 16:22 | 1514269 Iam_Silverman
Iam_Silverman's picture

"What I am implying is that the FED and Government are 'hammering on a string' trying to force people to spend their money as quickly as it is earned in effort to stimulate the economy."

Yes - they are stealthily pushing commodity inflation and wage deflation in order to accelerate "income reclamation", or otherwise known as money velocity.  I can understand how many younger folks today are living paycheck to paycheck with zero savings.  But, we still need to instill a sense of being prepared to handle emergencies on your own.  The government (as much as they like to) will not always be there to give us shiny new SNAP cards and never ending unemployment benefits.  I have been working on my own college age son to give him a sense of fiscal responsibility.  It's almost working, although he has ditched the iPhone for another phone as the cost of the data plans were more than his budget allowed (budget for him is: money in = money out with no deficit spending).

Mon, 08/01/2011 - 16:35 | 1514311 baby_BLYTHE
baby_BLYTHE's picture

I could never live with myself if it came to the point I was dependent on the government. Honestly, I would rather starve.

No debt, living on one's means and no credit cards for major expenditures is good sound advice for anyone.

Tue, 08/02/2011 - 01:24 | 1515821 StychoKiller
StychoKiller's picture

Check out/buy:

"Uncommon Cents - Benjamin Franklin's Secrets to Achieving Personal Financial Success", ISBN: 0-939817-06-3, by Lynn G. Robbins

Hint:  Pay yourself first by taking 10% of each paycheck and saving it (somehow!)

Tue, 08/02/2011 - 10:55 | 1516694 baby_BLYTHE
baby_BLYTHE's picture

cool. thx. I'll check that out. Franklin is my favorite founder :>

Mon, 08/01/2011 - 13:35 | 1513457 Commander Cody
Commander Cody's picture

You are steps ahead of the others.  Stay focused and prepare for the debt implosion.

Mon, 08/01/2011 - 11:22 | 1512706 Caviar Emptor
Caviar Emptor's picture

Agree. Now that they can't control through addiction, they'll revert to the old ways: force. 

Mon, 08/01/2011 - 11:26 | 1512715 falak pema
falak pema's picture

Well we see already how this global oligarchy play will occur to shift from demand/consumer side to producer/thrift side : 

1° Control WW media including Internet.

2° Control strategic resources, typically continuation of OIL/Arms/Money/Food/pharma play. 

3° Regulate the "resource limited" economy to their profit.

The people of first world, w/O their consumer power, w/o their political clout, will be toast trying to skimp off diminishing pensions and cut backed salaries.

The people of third world, (there ain't any second world), will fight to produce and bring down the labour rate world wide to bare nuckles economy. Grapes of Wrath times.

The fourth world will just be sold to the devil w/o any resource base, not even food and water. 

Until the Oligarchy sorts itself out.... Will take time. 

But the biggest millstone is lack of 'cheap' energy resources.

Mon, 08/01/2011 - 11:08 | 1512650 oldmanagain
oldmanagain's picture

Basically, consumption is not the cuprit if it goes into our economy. Ipods are made in China. etc. There's the rub.


Mon, 08/01/2011 - 11:39 | 1512794 FEDbuster
FEDbuster's picture

The real trick is to make the Ipods, Ipads, etc.. in the US, then sell them to China.  Those days seem to be lost forever, and with that goes our Country.

Hasten the Collapse, OBAMA 2012

Mon, 08/01/2011 - 16:24 | 1514274 Iam_Silverman
Iam_Silverman's picture

"make the Ipods, Ipads, etc.. in the US, then sell them to China."

My bet is that they would only

Then, we'd see knockoffs all over the world, and any advantage the U.S. had on price point or novel availability would be squashed.

Mon, 08/01/2011 - 16:42 | 1514317 Iam_Silverman
Iam_Silverman's picture

"Hasten the Collapse, OBAMA 2012"

Interesting idea - do you mean that the collapse will occur in 2012, or sometime after if Obama is re-elected?


clever attempt to disguise a double-tap post.....

Mon, 08/01/2011 - 11:10 | 1512653 DormRoom
DormRoom's picture

allowing consumers to borrow off future cash flow, helped owners of capital, by giving 1% of the US population, 10% of the national income. And this 1% used excess reserves to gain access to the body politics, and perpetuate the mechanism, which helped them accumulate vast wealth, in a quick, and scaleable way.


Mon, 08/01/2011 - 12:15 | 1513023 Max Hunter
Max Hunter's picture

I'm proud to be an American... where at least I know i'm free...   U.  S.. A...

U... S... A...

U... S... A...

Dude.. Cheer up.. That red, white and blue dick up my ass doesn't feel so bad..

Mon, 08/01/2011 - 11:09 | 1512655 TaxSlave
TaxSlave's picture


It's not my debt.

And I'm not paying it!

Mon, 08/01/2011 - 11:29 | 1512735 falak pema
falak pema's picture

the Oligarchs will make you pay...

Mon, 08/01/2011 - 11:09 | 1512657 anynonmous
anynonmous's picture

Al Hunt of Bloomberg whom I generally dislike for his horrible bias just said that he is not sure the bill will pass the house. 

Mon, 08/01/2011 - 11:10 | 1512660 Conrad Murray
Conrad Murray's picture

Future generations won't get to spend their surplus; they will have to devote it to servicing the debts we have gaily borrowed and blown on digging holes and refilling them, part of our worship of the magical painted rocks of our false and hollow religion, Consumerism.

Bullshit. This is one person who will not pay for your arrogance and ignorance. You expect your children and their children to pay $120,000 so you can live an extra week? All you boomers should do the respectful thing and ship off on a flaming canoe. Have you bastards no shame?

Mon, 08/01/2011 - 11:17 | 1512686 Cognitive Dissonance
Cognitive Dissonance's picture

We tried to float away on a piece of ice Eskimo style, but the polar ice caps are melting. We tried dude. Really, we did.

BTW I don't expect my children to pay a thing. I expect you and your children to pay for it all.


Mon, 08/01/2011 - 14:06 | 1513579 toady
toady's picture


Other people's children


Mon, 08/01/2011 - 11:27 | 1512724 karzai_luver
karzai_luver's picture

everything you have has been handed to you, just another crybaby now that the world has been shown.

Did you just pull your head out of Lord Of the BLINGS, is that it bitch?


pull the plow and keep your yap shut, children are to be seen not heard.


Mon, 08/01/2011 - 11:31 | 1512746 Caviar Emptor
Caviar Emptor's picture

Boomers didn't set up the consumerist economy: they were it's sheeple. The architects were those in the Nixon and Reagan administration : the "New" Economics guys (aka Supply-Siders) who claimed we could invent a new reality by just printing money and not paying our debts: Kemp, Friedman, Laffer and the list goes on. 

Mon, 08/01/2011 - 12:00 | 1512943 Pay Day Today
Pay Day Today's picture

The Century of the Self - UK doco

4 hrs worth - well worth it. We got sold out.

Mon, 08/01/2011 - 11:44 | 1512819 GeneMarchbanks
GeneMarchbanks's picture

Painting Boomers with a broad brush Conrad. Some are terribly materialistic and cling to FDNs others are not so well off at all. Last thing you want is an intergenerational dispute in America considering this has everything to do with an inability to understand the exponential function across many generations.

Mon, 08/01/2011 - 15:27 | 1512663 SwingForce
SwingForce's picture

Watch out if those future generation members wake up while the current generation is still alive. Great post.

Started reading your new book at Amazon, you are a great writer- thanks for sharing.

Mon, 08/01/2011 - 11:13 | 1512671 flattrader
flattrader's picture

Yawn...Is there anything new here?  I don't see it.

CHS is yet again running out of things to write about...,er um, regurgiatate and repackage as some sort of original analysis.

Mon, 08/01/2011 - 11:29 | 1512734 Idiot Savant
Idiot Savant's picture

Yes, this post is a waste of space on ZH, but I'd love to see it posted on mainstream sites (CNN, USAToday, HuffPo, CNBC, MSNBC, etc.). The general population is still ignorant re the basic structural problems with our economy.

Mon, 08/01/2011 - 11:44 | 1512825 FEDbuster
FEDbuster's picture

I know Dylan Ratigan reads Zerohedge (maybe even posts here?).  I would like to see Dylan invite Mr. Smith on his show, that would be an interesting conversation.  I enjoy CHS's blog posts, please keep re-posting them.

Hasten the Collapse, OBAMA 2012

Mon, 08/01/2011 - 11:33 | 1512755 TSA Thug
TSA Thug's picture

Desensitization. We like to hunt for suspects who continually reinforce the subversive memes. The best way to do it is repetition. Boo bear likes his honey.

Mon, 08/01/2011 - 11:57 | 1512919 r101958
r101958's picture

flattrader - please let us all know when you post your next (er, first) opus.

Mon, 08/01/2011 - 12:45 | 1513188 flattrader
flattrader's picture

I don't pretend to have original I won't regurgitate and repackage or produce some lengthy, mind-numbing quasi-intellectual nonsense.  I've got more respect for many of the posters here than to waste their time.

But, I will look forward to your opus.


I think we were supposed to be impressed with his "Cargo Cult" analogy...Not so much.

Been done before.

Tue, 08/02/2011 - 01:28 | 1515830 StychoKiller
StychoKiller's picture

BEFORE I plunk down any FRNs for a painted-rock radio, I gotta know:  Does it get AM & FM?  :>D

Mon, 08/01/2011 - 11:15 | 1512678 Cdad
Cdad's picture

50% tax on ALL China imports right now.  China has been engaged in economic war with us for decades.  Why the US continues to pretend otherwise...mysterious.  You want to end mindless materialism as much as I do?  Tariffs.

And then maybe Americans can rediscover their purpose again.

Mon, 08/01/2011 - 11:24 | 1512714 laomei
laomei's picture

americans have no purpose... unless getting fat is now to be considered a purpose

Mon, 08/01/2011 - 11:54 | 1512905 Feef
Feef's picture

Is "fat and stupid" one purpose or two?

Tue, 08/02/2011 - 01:30 | 1515833 StychoKiller
StychoKiller's picture

With the end of the Space Shuttle (soon to be followed by NASA!), guess you're correct.

Is the surface of a planet the correct place for an expanding technological civilization?  (Signs point to "NO!")

Mon, 08/01/2011 - 11:25 | 1512717 Version 7
Version 7's picture

50% tax on ALL China imports? Are you sure? Do you want to upset the chinese? Really?

Mon, 08/01/2011 - 11:29 | 1512736 Cdad
Cdad's picture

Yes, I am comfortable with it.

Mon, 08/01/2011 - 11:35 | 1512769 TSA Thug
TSA Thug's picture

Brazil just overtook the US as Chinas top trading partner. Something tells me your idea might be tripe.

Mon, 08/01/2011 - 11:53 | 1512898 Version 7
Version 7's picture

Empty your pockets to make room for your soon-to-be-worthless dollars.

Mon, 08/01/2011 - 12:05 | 1512965 Pay Day Today
Pay Day Today's picture

Cdad - Really? Apple and WalMart are going to accept 50% taxes on the stuff they sell?

Don't forget why this stuff is all made in China now: US corporations and US investors asked them to, instead of asking Americans.

Mon, 08/01/2011 - 11:17 | 1512682 Version 7
Version 7's picture

It's an anxiety-driven bubble (commerce) that evolved to greed-driven (finance/money out of money) and then to hoarding (metals). The author forgot to mention that also there isn't an infinite amount of potential natural resources on Earth that we can pimp for our economic system.

Mon, 08/01/2011 - 11:17 | 1512684 Rainman
Rainman's picture

The BIGS will fight like hell to restore the belief that the commoners must consume all the useless shit they produce. When Big Pharma started promoting pecker pumping pills that you need to take every day, I knew the end was near and desperation was setting in. 

Mon, 08/01/2011 - 11:26 | 1512722 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Get to tha choppa!!!

Mon, 08/01/2011 - 11:30 | 1512745 karzai_luver
karzai_luver's picture

so you are saying that the Black o-panthers are force feeding the sheep those Iphones?


ANother clue might help.


Mon, 08/01/2011 - 18:44 | 1514690 Cathartes Aura
Cathartes Aura's picture

When Big Pharma started promoting pecker pumping pills that you need to take every day, I knew the end was near and desperation was setting in.

when I read that BigDick Military was pumping those pills into Afghani Warlord hands, I too knew the end could not come quickly enough.

Mon, 08/01/2011 - 11:17 | 1512685 franzpick
franzpick's picture

When the going gets tough, the tough go shoplifting, or worse, as indicated by a large increase in armed robberies of small 'soft target' retail stores in our area.  One of our favorite small spanish restaurants was recently held up, at dinnertime, including all the patrons.  I've known for 2 years the consumer is dead, but now it's taking on new meaning.

Mon, 08/01/2011 - 11:17 | 1512688 zebrasquid
zebrasquid's picture

Generational warfare is coming.

As a boomer, I can't blame the kids for despising us, though, of course, most of us had absolutely no control over this mess.  But, still, you have every right to pull our plugs.

Mon, 08/01/2011 - 11:47 | 1512836 flattrader
flattrader's picture

Hmmm....Yes, the youngsters on ZH are not very happy it seems.

Generational warfare is coming.

No doubt encouraged by the billionaire predators and MNCs and scripted to their advantage.  But, the various Babies and Juniors here won't recognize what's happening.

I got handed a fairly dirty planet as a younger person (which still needs cleaning) and joined the environmental movement to get the Clean Water and Clean Air Acts passed, any number of state based enviro initiatives and occasionally engaged is some very unlawful civil disobedience.  I didn't blame Mommy and Daddy and got them both on board.

They threw a rebellion in June in nyc and nobody came.

Honestly, the only thing I have to say to most "kids" is "Boo Fucking Hoo."

Push away from the keyboard and push back.  Get off of Facebook and get up into somebody's face.

Quit your fucking whining.


Mon, 08/01/2011 - 13:40 | 1513487 Enceladus
Enceladus's picture

Yo Flat I think we'll get up in your face to start. Today civil disobiedence sounds like a bust. Yawn. And the so called clean water and air...enough said. Just another big government program funded by debt, great work Che Guevara. And our parents are you, so please show us a good example of not whinning. What the youth of this nation know already is we do not 'deserve' anything and most likely won't get anything. " There will be no cut for anyone over 55 years old" Rep. Paul Ryan. So lead the way you old social activist and simply disavow yourself of your 'deserved' entitlements. Also, I know you were soaked in Agent Orange at an early age but blamming your parents for the world your handing us makes you sound like Obama talking about Bush. 

Don't Trust Anyone Over 60!!

Mon, 08/01/2011 - 17:02 | 1514387 flattrader
flattrader's picture

Yeah, clean air and water is a communist conspiracy.  If only we had only just asked the big polluters not to pollute...oh wait, we did...they said "Fuck You" hence the legislation.

Sound like you need a diaper change, a bottle and some nappy time.  If you're still that cranky when you wake up, you need to go to Spankytown.

Boo Fucking Hoo.

Today civil disobiedence sounds like a bust. Yawn.

Well, you are a little chicken-shit are't you?  And a lazy one at that...or maybe you do need a bottle and a nap.

but blamming your parents for the world your handing us makes you sound like Obama talking about Bush.

Uh, no sonny. That's you.  I didn't blame Mommy and Daddy and got them on board.  It wasn't that hard since they both liked the out of doors.  Some of their generation simply didn't get the "activist mindset".

I think you should spend more time posting to ZH.  That way we know right where you are.

There will be no-generational warfare if you are indicative of the rank and file...too chicken-shit and lazy to fight.

Mon, 08/01/2011 - 18:54 | 1514708 Cathartes Aura
Cathartes Aura's picture

Don't Trust Anyone Over 60!!

yo, enceladus, you want to make that your rallying cry, be prepared for the equivalent:

Shoot Everyone Under 30!!!

if you were born in amrka, then you already have all the leg up you're gonna get in life, go do something besides moan about your fate.  no one owes you anything, and even fewer care.

Mon, 08/01/2011 - 21:15 | 1515251 Bicycle Repairman
Bicycle Repairman's picture

"Generational warfare is coming.  No doubt encouraged by the billionaire predators and MNCs and scripted to their advantage."

Yes.  See the bogus racial and gender wars of the 1970s.  If you  won't fight an external enemy, they'll make you fight an internal one.

Mon, 08/01/2011 - 12:00 | 1512950 snowball777
snowball777's picture

Abdication of responsiblity to the last. How fitting.

Mon, 08/01/2011 - 12:05 | 1512976 r101958
r101958's picture

I agree that the Boomers (as well as all following generations) have been living large. However, I do not believe Boomers should be blamed for some of the decisions that were made by their (our) parents. To name a few: 1-Closing the gold window; 2-Creating the 'Great Society' programs in the 60's; 3- Making no changes, whatsoever, to our energy policies after the US hit peak oil production in 1971. There are more but this is enough. I was only in grade school and high school when these decisions/programs were foisted on us. So, although I admit we have been apathetic/complacent, I do not agree that we are completely to blame for the current debacle we see unfolding.

Mon, 08/01/2011 - 11:18 | 1512690 buzzsaw99
buzzsaw99's picture

I just heard that glass has doubled in the last five years. Transitory?

Mon, 08/01/2011 - 11:37 | 1512781 TSA Thug
TSA Thug's picture

Did someone learn a new word?

Mon, 08/01/2011 - 13:18 | 1513357 Iam_Silverman
Iam_Silverman's picture

"I just heard that glass has doubled in the last five years. Transitory?"

Maybe, but if you are relating to Glass-Steagall, that was, in fact, very transitory!

Mon, 08/01/2011 - 11:20 | 1512692 bob_dabolina
bob_dabolina's picture

kkkkkkk  who am I? 

lulu and appl are gapping up massively with ripping and blistering speed

short at your peril


Mon, 08/01/2011 - 11:21 | 1512698 buzzsaw99
buzzsaw99's picture


Mon, 08/01/2011 - 12:08 | 1512987 SwingForce
SwingForce's picture

IYR getting the shit kicked out of it! No, really- DRV +5.16% 

Mon, 08/01/2011 - 11:22 | 1512701 LawsofPhysics
LawsofPhysics's picture

No shit Tyler, would anyone really expect anything else from economic models based on infinite growth in a finite world with finite resources?

Mon, 08/01/2011 - 11:39 | 1512792 TSA Thug
TSA Thug's picture

Your comments reminds me of a macro-micro bowl of spaghetti.

Mon, 08/01/2011 - 12:00 | 1512936 LawsofPhysics
LawsofPhysics's picture

Do you have a point, aside from groping everyone before they board a plane?  Markets and the consumer will force accountability back into the system, one way or another.  That is a large part of why the consumer is dead.  Deficits and fundamentals don't matter, until they do.  Noodles indeed.

Mon, 08/01/2011 - 11:23 | 1512709 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Dead dollar bounce?

Mon, 08/01/2011 - 11:26 | 1512723 Cdad
Cdad's picture

That's more than a bounce there on the Dixie.  That is a rip.

It has to rise...for there can be no QE3 until that dollar is higher and can again take more dilution.

Mon, 08/01/2011 - 12:22 | 1513066 Max Hunter
Max Hunter's picture

Exactly.. And put the EUR on life support as to keep the index looking healthy.. They've shown they can hide/confuse other things rising against the dollar.. As long as the index is up... PM's and Commodities rising can be seen as bullish because the great economy is creating demand.. LMAO

Mon, 08/01/2011 - 11:25 | 1512720 poor fella
poor fella's picture

It wasn't entirely 'consumerism' per se - but planned obsolescence. Make crap that breaks... great plan. Quality got thrown to the wind. Watched a show for the first time, something like "Trash to Cash" with Cali(?) where a picker puts together estate sales. I wanted to be at each one and would have gone absolutely nuts buying great, old, quality items. 100 year old tools, art nouveau and deco pen/ink sets, china sets, even a butter churning barrel (I'm crazy like that). Nowadays I look around houses (even my own) and do not care about a thing, no heirlooms, and nothing worth keeping (except coins, bars, and a little art)...

Cheap stuff, low wages, lengthy supply-chains, offshoring, etc. - good riddance is right!

Globalisation - EPIC fail.

Mon, 08/01/2011 - 11:27 | 1512729 carbonmutant
carbonmutant's picture

All religions require sacrifices...

Mon, 08/01/2011 - 11:45 | 1512809 TSA Thug
TSA Thug's picture

Psalm 51:16

You do not delight in sacrifice, or I would bring it; you do not take pleasure in burnt offerings. rejoice!

Mon, 08/01/2011 - 11:28 | 1512730 Caviar Emptor
Caviar Emptor's picture

There's another better reason why consumerism is dying: it's too expensive. That's what's stopped it. Because they could have always extended and pretended even more debt. But they couldn't do two things: real wages have been negative for 30 years since Reaganomics. That was by design: offshore jobs and industries, break unions. And then something the smart ones knew would happen: resource depletion. By fanning the flames of reckless consumerism, we ate up our oil, coal, minerals and even the fish in the sea. So now comes the vicious cycle: more consumerism will just hasten the decline by making everything more dear. 

Mon, 08/01/2011 - 11:28 | 1512732 Dr. Engali
Dr. Engali's picture

The boomer generation has sucked the life out of the economy by expecting to have everything. The boomers that do have wealth seek to preserve it going into retirement and take as much as they can off of the public dole. None of them want to dip into their savings. The gen x'ers who do inherit cash spend it as quick as they get it. I can't say that I blame them in this environment. Either it will be nothing relatively soon or the government will confiscate it.

Mon, 08/01/2011 - 11:35 | 1512765 Caviar Emptor
Caviar Emptor's picture

Again, the boomers were the sheeple being steered by the architects of "The New Economics" from the Nixon and Reagan days. When the US overspent on the Vietnam war and couldn't pay debts, the gold window was slammed shut. From then on it became a game of how to float an economy on printed money without stoking up too much inflation. The high priests were Kemp, Friedman, Laffer and many others. Their followers were Nixon, Reagan, Volker, Greenspan, Bernanke and many many more. They claimed that they had invented a perpetual motion machine. They bullied the boomer generation into consumerism and of course, like pushing drugs, boomers got hooked. 

Mon, 08/01/2011 - 11:35 | 1512772 karzai_luver
karzai_luver's picture

Ah the Amerikan Dream , so sweet so pure so obvious.

Of course the idiots who NOW want it all are the same bunch of idiot children who elected the Giver in Chief the most high new man of the world.


Take it and like it you lazy spoiled children of the empire.


Oh yeah, Iraq needs a couple more schools , hop to it clowns.



take it and like.

more peas, bitchezzzz?



Mon, 08/01/2011 - 11:45 | 1512827 falak pema
falak pema's picture

Its not the boomer gereration, it's Reaganomics gone mad.

Mon, 08/01/2011 - 12:18 | 1513046 firefighter302
firefighter302's picture

Reaganomics?   Where did you pull that out off ?


Mon, 08/01/2011 - 12:24 | 1513074 falak pema
falak pema's picture

where have you been since thirty years? 

Do you need a revise crash course? Wow....drink Darjeeling tea. Good for tea party guys.

Mon, 08/01/2011 - 11:37 | 1512785 TwelfthVulture
TwelfthVulture's picture

paper with funny green ink on it for real stuff


What?? Everybody knows that paper is worthless, the US FRN is LINEN!!!!!!

Mon, 08/01/2011 - 11:47 | 1512844 the grateful un...
the grateful unemployed's picture

marketing serves the purpose of collectively bringing us onto common ground with our neighbors. of course you can market anything, including survivalist gear, and that perfect vacation which you spend alone on a mountain top. marketing keeps us all together. we're all consumers, but the accelerated process of marketing relieves the need for products. like marketing groove. you groove, i groove, we all groove, and products  don't do anything (like pet rocks) except serve as common experience. (some people say the cellphone is to todays kid, what a pack of cigarettes was to their parents - social communication) the consumer isn't dead, he has been successfully marketed to a new level of social awareness, and he no longer needs the products. no matter what the economists say about it, this change represents the end of shopping. what is the next thing?

Mon, 08/01/2011 - 11:48 | 1512853 Tao 4 the Show
Tao 4 the Show's picture

The whole Boomer idea is another meme to occupy our minds. It's just one generation of many who were suckered along by false conditioning. A large fraction of the "Great Generation", for example, turned into real over-entitled asses late in life. They were the parents of the boomers and were similarly fooled by all the WW2 propaganda. Many of the boomers were idealists - some were perverted into crass materialism and others hung on to some idea about doing their part to build a decent world.

Blaming one generation or another is precisely like blaming Republicans or Democrats - it's a diversion to keep us fighting each other rather than focusing on the wonderful monetary system, started before almost anyone living now was born. It's like crying in your pod because the guy in the next pod got a bigger dose of illusion-inducing drug. You're both in the Matrix.

Mon, 08/01/2011 - 11:50 | 1512869 Ricky Bobby
Ricky Bobby's picture

Very good insight Tao!

Mon, 08/01/2011 - 12:59 | 1513255 flattrader
flattrader's picture


Spoken like a grown-up.

I hope you are involved in something issue related.

Mon, 08/01/2011 - 11:49 | 1512859 Ricky Bobby
Ricky Bobby's picture

Fire and brimstone preaching against human nature. All humans in all places are consumers the only issue is how that fact is addressed as a culture and civiliztion.

Mon, 08/01/2011 - 11:54 | 1512904 yourlifeisamyth
yourlifeisamyth's picture

This is where we are...

"In the waste land, everything is upside down. Wars are waged in the name of peace. Countries are governed by the ungovernable and gods are created by men. At their hands and under the banner of righteousness and liberty, many are terrorized, tortured and imprisoned. Simple truths are hidden in plain sight while lying words are crafted and massaged in such a cunning way as to disguise their real meaning before entire nations. And while the idea of freedom of speech is publicly revered, those who actually proclaim the truth are often silenced and even secretly put away. Meanwhile, average citizens are content to learn "the truth" about the outside world from inside their homes, behind a flickering, two-dimensional screen of virtual images, framed in synthetic light. They are informed by the clueless and entertained by the talentless. Their food is manufactured by machines that have little regard for nourishment. And when they fall ill, they are treated and given medications by institutions that are least interested in their health. Their children are dumbed down by a costly higher education system and herded into a dizzying labyrinth of knowledge that teaches no wisdom. Those who are healthy and sane enough to recognize the madness of the maze and take leave of their wits are shunned, put into insane asylums or locked up in prisons, while the "well-adjusted" are rewarded with wealth and the highest positions of power."



Mon, 08/01/2011 - 11:54 | 1512906 Goatboy
Goatboy's picture

Another nostalgic, romanticized post.

Almost everything said about consumerism, debt and borrowing is true.

Solution? Lets go back to the "golden" age of independence, "back to a decentralized, self-reliant productive economy."

Its impossible! Wake up! We would need catastrophe of immense proportions in order to partly fulfill that dream of yours.. and it would be a huge step backward after 2 centuries of suffering and attempts to improve human condition.

Mon, 08/01/2011 - 12:10 | 1512993 r101958
r101958's picture

We can choose to change or it will be forced on us by circumstances. The fact that this is a planet with finite resources will not change because we (or the gov't) wishes it so.

Mon, 08/01/2011 - 12:46 | 1513190 Goatboy
Goatboy's picture

Where have I said that current situation is sustainable? Infinite growth is impossible on a finite plot of land (Earth).

I am just saying that our solution is not in abandoning all good things we created and returning to the land. What else his "productive economy" means? We already have productive economy.. problem is that it is concentrated in less and less hands (natural result of capitalism in unperfect world).

I would like to hear your opinion, what exactly am I understanding wrong?

Mon, 08/01/2011 - 12:00 | 1512946 wombats
wombats's picture

There are so many bright shiny gods to buy and worship!  How can we possibly give them up!?!


Mon, 08/01/2011 - 12:02 | 1512957 Milton Waddams
Milton Waddams's picture

In case any of the youngsters were confused about where this compulsion to consume based on wants instead of needs originated --


In any event the reluctant consumer presents a challenge to American salesmanship unmatched in the history of selling.  He also presents a challenge to the ingenuity and resourcefulness of business research and development, which must stimulate the urge to buy. - Henry Luce's rag (Life Magazine), 1953

Mon, 08/01/2011 - 12:12 | 1513005 Pay Day Today
Pay Day Today's picture

Arguable it started earlier than that, too

The Century of the Self

(apologies for link reposted from above in thread)

Mon, 08/01/2011 - 14:55 | 1513832 Bwahaha WAGFDSMB
Bwahaha WAGFDSMB's picture

Bernays bichez!

Mon, 08/01/2011 - 12:20 | 1513022 firefighter302
firefighter302's picture

"Infinite demand met marginal return in an alley. And indefinite demand is in the gutter, whoozy and bleeding profusely."  Brilliant ! LMAO. 


Mon, 08/01/2011 - 12:27 | 1513095 Little John
Little John's picture

   I sorta saw this coming back in the 80's when people started to want clothing lables to be placed on the outside of the garment.  What we did was monitize status. Why join the Navy and go through all that crap when you can buy Tom Cruise's Top Gun jacket at Walmart, and get some prefaded jeans to go with it.  Good essay Mr. Smith.

Mon, 08/01/2011 - 12:39 | 1513147 lawrence1
lawrence1's picture

Good point!  I forget the name of the social psychologist of the sixties who quipped to the effect that the goal of advertising what to insert a product or service between every itch and scratch.

Mon, 08/01/2011 - 19:45 | 1514910 Cathartes Aura
Cathartes Aura's picture

I'll hazard a guess you're thinking of Marshall McLuhan's The Medium is the Massage. . .

still relevant to anyone who likes "backstory"

Mon, 08/01/2011 - 12:35 | 1513126 lawrence1
lawrence1's picture

Pretty simple minded.  You are going to have to learn to think and analyze more clearly to survive whats happening, not fall into the elitists trap of getting people to blame each other rather than the banking cartel system.  Direct your anger at the right target.

Mon, 08/01/2011 - 12:35 | 1513129 KeyserSoze
KeyserSoze's picture

Consumption is our god, our faith and our religion.


 That right there says it all.

Remember folks, in the weeks after 9/11. After Bush (the alleged committed Christian) gave a few speeches of how it was time for relfection, remember what he told the US people.... 'Go out and consume'. That was the mantra post 9/11. After a few prayers, it was all about consuming, eating, buying, because that's how the US is going to be saved. That's the false god these people worship, whether directly or indirectly, whether they know it or not.

Consumption is the key to the US. Hyper-bloated-materialism, is its core. The golden calf it worships.

Mon, 08/01/2011 - 12:48 | 1513205 wombats
wombats's picture

I believe we as a society are now reaping the rewards of what we have sown.  Worshiping the gods of consumerism has left us a hollow shell of our former greatness.  This cannot end well for us unless we repent our sins, stop worshiping the false idols of consumerism and give our worship and glory to the on true God.

Mon, 08/01/2011 - 13:09 | 1513314 Creepy Lurker
Creepy Lurker's picture

Yeah, let's trade one BS slave religion for another. That's the ticket...

Mon, 08/01/2011 - 19:50 | 1514935 Cathartes Aura
Cathartes Aura's picture

good post KeyserSoze, which for some reason I can't click the green arrow on.


I remember that time, when "citizens" were blatantly re-branded "consumers."

Mon, 08/01/2011 - 13:01 | 1513259 mt paul
mt paul's picture

cut back your spending....

lets starve this beast 

[ debt based economy]

starve this beast 

into submission ....

Mon, 08/01/2011 - 13:08 | 1513308 Little John
Little John's picture

  It wasn't just the putting prestige upscale logos on consumer products.  Government and business both reveled  in debt fuel excess - who the hell flies a Gulfstream when you could of had a 737.  We built a tower of Babel that cannot be dismantled - it will have to fall.

Mon, 08/01/2011 - 19:53 | 1514950 Cathartes Aura
Cathartes Aura's picture

Guvner Ahnold & his ostentatious fleet of Humvees comes to mind. . .

Mon, 08/01/2011 - 13:13 | 1513335 kdervin
kdervin's picture

In Chicago, the White Sox-Red Sox series wasn't sold out.  And the two McCartnery concerts (Sunday & Monday) at Wrigley Field aren't sold out either.  There were walk-ups buying the tickets at the park to avoid the Ticketmaster service changes.

Mon, 08/01/2011 - 13:53 | 1513536 Mr Kurtz
Mr Kurtz's picture

 “What we call normal in psychology is really a psychopathology of the average, so undramatic and so widely spread that we don’t even notice it ordinarily.” ~ Abraham Maslow

This describes the cult of consumerism. Spending your entire life surrounded by useless crap as you struggle to keep up with the Joneses. Meanwhile, 'in the shuffling madness of the locomotive breath...'

Mon, 08/01/2011 - 14:22 | 1513648 besnook
besnook's picture

insatiable demand is not dead. the ability to pay for it is. the minsky moment has arrived on the macro and micro level. as cd pointed out yesterday the demand on the macro side will be fulfilled by the ability to fill the need with fiat currency like an addict dulfills his needs. on the micro level the only thing thast can ber done is an increase in personal disposable revenue. since there are no pay raises or easy business revenue increases in sight the remaining way is to pay down debt to make more room.


there is the possibility that this generation may be the new depression generation, a generation of tight wads more interested in saving money than spending money. however, you can bet the banks will do whatever they can to thwart this possibility to the point of convincing .gov that consumer debt buydowns, tax credits(ss tax reduction) and outright cash grants or coupons are necessary for a full recovery.

Mon, 08/01/2011 - 14:32 | 1513656 narnia
narnia's picture

in a free market, we'd consume more...  because we'd be otherwise spending amounts stolen from us on stuff we need & want rather than buying bombs, prisons, baby sitting (it's not education), and all other stupid, counter-productive enterprises.  innovation would follow what improves our quality of life, rather than in arbitrary industries that are neutral or destroy our quality of life because of arbitrary government allocation.

the core of the existing economic problem is: the capitalized price level of all products we need & want and the associated debt at those prices necessary to subsidize public expenditures of stuff we don't need or want includes a level of taxation (direct & indirect) that's no longer supportable by the private sector.  

Tue, 08/02/2011 - 02:34 | 1515897 Peter K
Peter K's picture

And the solution to the consumtion model is.......?

Wed, 09/14/2011 - 04:31 | 1667284 chinawholesaler
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