As is custom, Friday’s business coverage focused heavily on “Black Friday” shopping activity.
An NPR article reported “in an encouraging sign for retailers and for the economy, more shoppers appeared to be buying for themselves than last year.”
While certainly positive for retailers the nature of the impact of the traditional shop-fest is less certain for the broader economy, at least over the long term.
This point is illustrated in the article’s last subject, Todd, a security guard. Todd informs NPR that “I got a laptop and I’m getting a home theater system and an iPod Touch — so was it worth it? Yeah, it was worth it.”
The article also reports that it took Todd all year to pay off his credit card from last year’s buying binge. “Now, I’m going to put it right back up there,” he said laughing. “It’s the American way.”
Todd is quite right. Misplaced priorities are the “American Way.” Low skilled workers are going into debt to buy home theater systems and no one sees anything wrong with that. Against this backdrop, it is little surprise that despite increased investor education efforts, there has been little success in improving savings and investing behaviors, particularly at lower income levels. The endeavor is a bit like having a Department of Agriculture staffer hand out copies of the food pyramid to tour groups at Hershey factory as they make their way from the chocolate melting room to the caramel blending facility.
It is clear that Americans need help making the “right” decisions. Do I hear on second moving to a consumption tax?