The 2009 holiday shopping season will likely mark the end of an era. The U.S. economy has spent nearly 30 years in the red. B0th Ronald Reagan and George Bush respectively ran up more debt than all Presidents before them combined. As if following a leader off a cliff, the American people buried themselves with credit cards and home equity mortgages. After a dismal holiday season some analysts are predicting that up to 25% of all retailers could go bankrupt in the coming year. Surely the fortunate survivors will change their approach to luring and maintaining a customer base. What will change is yet to be seen, but in the words of President Elect Obama, a change is going to come.
While Berdard Madoff was churning investments to pay suspiciously high dividends, "legal" lending institutions were making N.I.N.J.A. loans (No Income,No Job, no Assets) selling 700, 000 dollar homes to people making 14,000 dollars per year with no payments for the first two years. These deadly loans were then bundled and sold in lots of 100 to willing suckers such as AIG and Citigroup. The lending institutions were irresponsible and the people accepting these loans were either delusional or mathematically challenged. However, thanks to deregulation there were no laws broken, mainly because there were no laws left to break.
America, from top to bottom, was in an economic tailspin. With virtually all of our manufacturing gone and the service jobs in exodus, the only product we could create for profit was debt. We were truly living in a red economy. How could anyone be surprised at the crash we are experiencing? The reality of Ronald Reagan's regulation free trickle down economics is being realized as bankruptcy started with the major corporations and is now trickling down to the families of the workers they laid off.
President Elect Obama's vision of a green economy, supported by tax policies which penalizes the exportation of jobs, can create a stable alternative to the current dysfunctional mess we find ourselves mired in. It will undoubtedly take a while to become reality but it may be our only hope, with an emphasis on the word "hope".
However, if this ship is to be turned around we also need to convince our citizens to stop wandering aimlessly through discount stores spending money they don't have to buy things they don't need.