Volcker: Era of a consumer-driven economy has ended
He’s right of course. And the unspoken implication of that change is that the typical American will be consuming less, or by some measures living less well or extravagantly. I don’t think a lot of people fully grasp what that means.
“NAPLES, Florida – White House economic adviser Paul Volcker said his meeting on Monday with President Barack Obama focused in part on reducing U.S. economic reliance on consumer spending.
The alternatives to help bolster future economic growth include boosting exports, applying innovative technology to green issues and improving the nation’s infrastructure, Volcker said.
The former Federal Reserve chairman, who now heads the White House Economic Recovery Advisory Board, said Obama understands that “We cannot have so much consumption.”
Consumer spending accounted for 70 percent of the U.S. economy before last year’s economic meltdown, a level that Volcker said was sustained only by “the magic of financial engineering.”
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289 comments Add your comment
Miss Mothra
November 3rd, 2009
10:53 am
I’m so proud of my president.
Doggone/GA
November 3rd, 2009
10:55 am
“The alternatives to help bolster future economic growth include boosting exports”
so the era of consumer-driven economy is at an end because Americans overspent their credit limits…and the answer is to EXPORT that to other countries? We can’t buy the goods, so let some OTHER consumers do it.
Marsh
November 3rd, 2009
10:57 am
President Obama is intelligence personified.
Paul
November 3rd, 2009
11:01 am
Man oh man. Way to tick off the undecideds.
And I’ll make a prediction. Pres Obama will embrace that. Has embraced that. Regardless of the implications for his political fortunes.
Rarely have we seen a president so out of step with either Party.
Angry Black Man
November 3rd, 2009
11:01 am
Good. Consumption should have never been the driving force of the economy anyway. We gave up our economic dominance when we outsourced jobs and showed the rest of the world how to manufacture things.
Marsh
November 3rd, 2009
11:01 am
Maybe it’s time to go back to investing from the bottom up.
Trickle-down is a failed idea.
Turd Ferguson
November 3rd, 2009
11:02 am
The baby boomers drove this economy for years. These emigrants refuse to spend one penny…with regard to being great money savers I guess thats a good thing. Yet they want others to spend while they save and contribute not much other than to leech off the system.
They live 6 to a two bedroom apt, drive shoddy automobiles etc. They refuse to assimilate. Now of course thats not the only issue driving lack of consumer spending.
Another is Obobo and he demands we spend less and give more to his OboboCare and other bankruptcy plans.
Its Shurla-Burla for shore.
Doggone/GA
November 3rd, 2009
11:03 am
“We gave up our economic dominance when we outsourced jobs and showed the rest of the world how to manufacture things.”
Ummm…what good is it to MAKE things, if there’s no one BUYING THEM? There’s no such thing as an economy that is NOT “consumer driven”
jt
November 3rd, 2009
11:05 am
“Obama understands that “We cannot have so much consumption.”
Jimmy Carter preached that shiaaat too.
Go spread your malaise to Chicago.
Paul
November 3rd, 2009
11:07 am
Turd
LOL! I love parody. People work for minimum wage or less so they share apartments and drive clunkers! They work for more than minimum wage and they’re so irresponsible they send money home to support their families which means they share apartments and drive clunkers.
Sounds like the work ethic and family values morality conservatives should love -
Redneck Convert (R--and proud of it)
November 3rd, 2009
11:08 am
Well, we could get back to good times again if people would just spend, spend, spend. Spend till you’re flat broke and then borrow and spend some more. It’s worked for the guvmint for going on 50 years and it will work for us too.
We don’t need no stinking green economy and bridge building and such. You got the money. You know you got it and you’re just poor-mouthing. And even if you ain’t got it, you know you can borrow it. So I’m calling on my fellow citizens like Sister Dusty and Mrs. G. and ABM and all the other pikers on this blog to spend for the good of your country and the rest of us. You know good and well you always wanted that big flat screen TV and new clothes and all that stuff. Well, now’s the chance to get what you want and dig us out of a big hole besides. And maybe on the way home you can pick up a case of PBR to sellabrate and help me keep my job too.
Have a good lunch everybody. Make it a real costly one. The rest of us are counting on you to do your part.
Angry Black Man
November 3rd, 2009
11:08 am
Doggone
When we manufactured things, we were also the consumer. Remember your discussion about businesses last week? Pay your employess enough to also be your customer? If you don’t have a job you can’t be a consumer. When you’re relying solely on the consumer, I think that you’re betting against the house, and the house always wins.
jt
November 3rd, 2009
11:08 am
Or to any third-world bananna republic that actually listens to you.
USinUK
November 3rd, 2009
11:09 am
huzzah! well said, Volcker.
Matilda
November 3rd, 2009
11:09 am
I think it means I don’t really NEED a bunch of cheap cra-pola from WalMart, made in third-world countries, guaranteed to fall apart within two years so I have to buy replacement cheap cra-pola. America’s obsession with low low prices, and filling up one’s living space with absolutely everything we see on TV is partly responsible for the migration of our manufacturing jobs overseas. Kids don’t really need rooms overflowing with cheap plastic toys they tire of in a week. Who knew? I’d rather have a few pairs of well-made shoes than a closet full of cheap cra-pola. Ditto for furniture, electronics, appliances, and decor. Garage sales rock! We’re finding out that more — and often new — is NOT always better!
Turd Ferguson
November 3rd, 2009
11:12 am
Paul…Im not talking about the Mexicans living 8 to a one bedroom who work roofing jobs and probably get paid much more than minimum wage.
You missed it…
USinUK
November 3rd, 2009
11:12 am
other economists are singing the same tune as PV:
Rising exports and productivity gains are part of a “new mix” that will propel the U.S. economy to growth rates exceeding those envisioned by advocates of the “new normal,” economist Joseph G. Carson said.
The world’s largest economy will expand about 3.5 percent on average in coming years, in line with the last half century, Carson, director of economic research at AllianceBernstein LP in New York, said in an Oct. 30 note to clients. Mohamed El- Erian, chief executive officer of Pacific Investment Management Co., is among those projecting potential growth rates around 2 percent or less as the “new normal” for the U.S.
“Although we don’t dispute many details of this argument, we strongly disagree with the conclusion,” Carson wrote. “In our view, fiscal stimulus will create a new mix of growth drivers in the near future.”
http://www.bloomberg.com/apps/news?pid=20601103&sid=aWAHV7Awoe78
Taxpayer
November 3rd, 2009
11:13 am
A lot of people may not fully grasp the meaning, Jay, but some do. It’s a start.
And, Yes, we need to export more — more of our debt. If only we could convince other countries to take our debt but not want to be paid back, with interest. We need some of those financial wizards to turn debt into gold or to make clothes for foreign emperors or something.
Mrs. Godzilla
November 3rd, 2009
11:13 am
Heavens what a marvelous idea!
Consume less, Conserve More.
Gonna be a tough sell in a nation as fat as lazy as we are……
Now pass the rest of the Halloween candy.
Normal
November 3rd, 2009
11:14 am
TF@11:02, Are you saying that Baby Boomers live six people to a two bedroom house? Maybe so with some who were heavily invested in 401Ks when the bust came, I don’t know.
My wife and I are Boomers, and we have a paid up mortage on a three bedroom split, Her car and my truck are paid for too, we paid cash from, yes, savings. I’ll admit my truck is old, but I like that truck and when I like something, I tend to try to keep it around a long time. Did I say I like my wife too?
Please explain to me what you mean by this too? “Yet they want others to spend while they save and contribute not much other than to leech off the system.” Leech what? Social security? Medicare? What? I don’t use any of them. So please explain, I am really interested as to what you mean.
Doggone/GA
November 3rd, 2009
11:15 am
“When you’re relying solely on the consumer”
I think the problem is that they are saying wrong. It’s not that we consume too much, it’s that we don’t produce enough of what we consume. We do, however, consume – regardless of manufacturer – more than we can afford to spend on that consumption.
The economy will always be consumer driven…but it needs to be balanced between consuming and producing, and the consumers need for it not to be so easy to consume more than they can actually afford.
It does no good, in the long run, to turn your employees into conusmers…if they are spending more than they can afford.
Paul
November 3rd, 2009
11:16 am
Anyone notice that at the same time Volker’s advising people to consume less (much of which was accomplished with borrowed money)
that the government is consuming and borrowing and spending at record levels?
So not only is the up and coming generation ticked and disgusted with what the older generations did, they’re going to be ticked and disgusted at what the older generation put in place that will impact them decades down the road.
Talk about gettin’ slapped up both sides of the head -
Normal
November 3rd, 2009
11:17 am
Matilda
November 3rd, 2009
11:09 am
Matilda, I’m afraid we are closing in on the day when “Made In America” is going to mean the same thing as “Made In Japan” meant in the ’50s…just sayin’
Nothing Is Free
November 3rd, 2009
11:18 am
**White House economic adviser Paul Volcker said his meeting on Monday with President Barack Obama focused in part on reducing U.S. economic reliance on consumer spending.**
No. This administration is not based on socialism. No!! Not at all.
Here’s a clue, folks. We are a capitalist country. Our economic system that has, for the past 70 years completely dominated the entire world on almost every front, is based on a consumer driven system. Because we allowed a socialist agenda being adopted by a liberal leaning Congress does not mean that we should put aside our very successful system.
If you want to be controlled by the government, for God’s sake go to any one of the failed systems around the world. STOP TRYING TO SCREW UP THIS VERY SUCCESSFUL SYSTEM!!!
Damn!! Can the 2010 elections get here soon enough and get these communists and socialist out of our lives.
Most of us do not want to be living under the iron hand of this fascist government.
What in the hell have we done.
Doggone/GA
November 3rd, 2009
11:20 am
“Matilda, I’m afraid we are closing in on the day when “Made In America” is going to mean the same thing as “Made In Japan” meant in the ’50s…just sayin’”
I don’t think so…I think it’s rapidly approaching the time when it will mean as much as “made in antarctica”
Taxpayer
November 3rd, 2009
11:20 am
Did I say I like my wife too?
Mine’s a keeper. Fortunately, she feels the same way.
Paul
November 3rd, 2009
11:21 am
Turd
Did you miss the part where I wrote if they earn more than minimum, they send the money home to support immediate and extended families (wives, kids, parents, siblings) and sacrifice here by continuing to live six to an apartment and drive clunkers?
Marsh
November 3rd, 2009
11:21 am
NIF @ 11:18,
>STOP TRYING TO SCREW UP THIS VERY SUCCESSFUL SYSTEM!!!<
You made a funny.
USinUK
November 3rd, 2009
11:22 am
“Mine’s a keeper. Fortunately, she feels the same way.”
awwww … you and Normal are so sweet.
Nothing Is Free
November 3rd, 2009
11:23 am
matilda
**I think it means I don’t really NEED a bunch of cheap cra-pola from WalMart**
Yes. You need to buy that Sony Braveria from Target because if you buy the exact same TV at a cheaper rate from Walmart it doesn’t work nearly as well.
Tell you what Matilda. Buy whatever you want from whomever you want to buy it from. A fool, and their money are soon parted.
Matilda
November 3rd, 2009
11:24 am
Normal, um….. The 50’s were before my time… {:-> HBO has a documentary on this month about the NY Garment District. “Rags to Riches to Rags” or something like that. Very enlightening! Shows how much of the middle class was built up through manufacturing (yes, unions made it possible for sweat shop workers to better their lives), and now the sweat shops are overseas and the “American dream” is a memory for all those who once thrived in that industry. I’m old enough to remember when WalMart boasted that most of its products were made in the USA, but that sure has changed!
Nothing Is Free
November 3rd, 2009
11:27 am
Marsh
No I didn’t.
Keep thinking that because we allowed 1/5th of our home loans to go unsecured that our system is done. While it was the whole idea by Barney Frank to bring down the capitalist system, it can be fixed without getting rid of the system.
Why is it s so important to you that we start living like we live in a third world country?
USinUK
November 3rd, 2009
11:27 am
“Most of us do not want to be living under the iron hand of this fascist government.”
yay!! I can always rely on NiF for a giggle
(picturing NiF’s hand pressed to his weary brow) I’m tellin ya, with this kind of melodrama, he could star in the Perils of Pauline … playing ALL the roles!
Marsh
November 3rd, 2009
11:27 am
Matilda,
Congratulations! You have NIF’s permission to spend as you please! Just what you were waiting on, I’m sure.
Angry Black Man
November 3rd, 2009
11:29 am
“It’s not that we consume too much, it’s that we don’t produce enough of what we consume.”
That’s the point I was trying to make. For instance, I’m at work looking at a monitor made in China, wearing a uniform made in Mexico, and I’m supposed to be protecting US interests. The only manufacturing that I see the US still doing on a large scale is for defense.
Marsh
November 3rd, 2009
11:29 am
NIF @ 11:27,
<Why is it s so important to you that we start living like we live in a third world country?<
Because I want to see you carrying a pot of water on your head.
Matilda
November 3rd, 2009
11:29 am
NIF, are you dissing me for preferring to shop wisely? Or are you just taking a pointless cheap shot on principle? Yes, the Best Buy store brand TV I bought (when my old one died) lasted exactly NINE days. Why do they even bother to make s–t like that in the first place? Took it back and paid a little more for an LG. Hope it will last 10 years, because that’s as often as anyone should have to buy a new TV.
Nothing Is Free
November 3rd, 2009
11:32 am
Doggone/GA
** I’m afraid we are closing in on the day when “Made In America” is going to mean the same thing as “Made In Japan” meant in the ’50s…*
it takes energy to produce goods. It often takes huge, energy hungry heat sources to manufacture almost any and everything that is made.
Just wait until Cap and Trade. After a few months of multiples of the energy bills that the few remaining manufacturers will be getting, good luck on finding anything still made in America.
So why on earth do you and others support a government that is so intent on us losing the few remaining businesses we have left?
Normal
November 3rd, 2009
11:33 am
Matilda, the Store L.L. Bean is a prime example. I have a shirt my sister bought for me back in ‘74 and it is wearing a made in America lable. It still looks good, great quality, made to last. I sent off for some winter PJs for my wife and when I got them, they still had the L.L. Bean lable in it but this time it said made in China. My 25 year old shirt had better material and stitching than the PJs. I will admit that they were better than any Wal Mart stuff, but they, in no way, compared with what we used to make here. That, my lady, is freakin’ sad!
Taxpayer
November 3rd, 2009
11:33 am
Because I want to see you carrying a pot of water on your head
Kodak moments are so rare these days.
I Report :-) You Whine :-( Ate Up With Envy mmm, mmmm, mmmmm!
November 3rd, 2009
11:33 am
And the unspoken implication of that change is that the typical American will be consuming less, or by some measures living less well or extravagantly. I don’t think a lot of people fully grasp what that means.
Yes we do grasp the situation, more than you liberals understand, and we even have the perfect solution for it- Throw the democrats out of office.
Problem solved.
Normal
November 3rd, 2009
11:35 am
Doggone@11:20, Loved it!
Nothing Is Free
November 3rd, 2009
11:35 am
Matilda
But you bought it at Best Buy. My point was about Walmart. Walmart has a better return policy than Best Buy and their TVs are usually about 10-20% cheaper. So is that what you call shopping wisely?
In spite of what you are told by this union pandering government controlled media, the stuff you buy at Walmart is the exact same stuff you bay anywhere else, except cheaper.
Marsh
November 3rd, 2009
11:36 am
NIF @ 11:27,
>it can be fixed without getting rid of the system.<
Who said anything about getting rid of the system? Keep consuming, but be a wise buyer.
AmVet
November 3rd, 2009
11:37 am
This corporate destruction of capitalism is just one more of the many failings of Reaganism. It just took the complicity of four more administrations, thousands of politicians and untold numbers of white collar criminals to bring it to fruition.
In the 1980s we all witnessed this new out of the closet St. Ronnie philosophy, “Screw everyone else, I’m getting mine.”
Extol avarice! Worship at the holy altar of mindless, empty greed.
Pretend self-obsession is the same as service. Pretend cowardice is the same as valor. Pretend raping the planet and its resources are normal social functions.
Acquire, acquire, acquire. More stuff. More things. It’s how one demonstrates success, right?
That is the way to impress, and buy, one’s “friends”. And feel like a real man.
Malls exploding with vapid little twits who will never produce anything. Who will never create anything. Who will never do much of anything but buy stuff made in countries run by dictators and thugs, using borrowed money or their cash cow parents who are afraid of them.
My tribe has an old adage, “Live within your means.”
And many of us have. Our entire lives.
But the gangster capitalists merely deflected the pain of their vast crimes, and now almost all Americans are screwed to some degree or another.
And the greatest socialist/Marxist/communist/redistributionist/Trotskyite in American history, George of the Bungle, actually gave the criminals billions in rewards for their crimes! All via closed door meetings shutting out and locking out the American taxpayers, shareholders and pensioners.
The ultimate insult – King George IV and the Democrats in Congress shove down our throats modern day taxation without representation.
And as noted earlier, what a farce – the “free market” and “trickle down”.
You’re doing a heckuva job conned…
Nothing Is Free
November 3rd, 2009
11:39 am
Today is a prime example of why I could never be a liberal.
You complain like crazy about jobs going overseas, but you support the party of corrupt unions. You support the government that just raised taxes on small businesses by 1/3rd. And we are about to get CAp and Trade.
Do any of you ever actually connect the dots?
Marsh
November 3rd, 2009
11:40 am
Tp @ 11:33,
I thought about saying “because I want to see you bathing in a filthy river.” But no way in hell would I want to see that!
Nothing Is Free
November 3rd, 2009
11:41 am
Marsh
**Keep consuming, but be a wise buyer.**
Please explain what you would consider being a wise buyer. I comparison shop for everything I buy and I buy almost everything at Walmart. Their price is almost always the best and they have the best return policies. So am I being a wise shopper?
Normal
November 3rd, 2009
11:42 am
AmVet
Acquire, acquire, acquire. More stuff. More things. It’s how one demonstrates success, right?
No, it’s how you get all that good stuff for yard sales later, when you need the money!
I Report :-) You Whine :-( Ate Up With Envy mmm, mmmm, mmmmm!
November 3rd, 2009
11:42 am
So I take it the jump in GDP the last quarter that Obozo, mmm, mmmm, mmmmm, is trumpeting as success based upon is economic policy, is really a bad thing, seeing how it was driven by the consumer spending of cash for clunkers and the mortgage tax credit?
Do you liberals spend anytime thinking about anything?
Or do you just run your mouths?