Shop away the fears | AspenTimes.com

Shop away the fears

Roger Marolt

According to the latest consumer sentiment polls, as a nation of shoppers we are pessimistic about our economic future. An index measuring such a thing peaked during August at 105. Then, in October it dropped to 85.2 after September saw the biggest one-month drop in 17 years. Yowza! Apparently we are seriously concerned about the ongoing war in Iraq. Terrorists pose a threat that’s never going away. The national debt has risen to an incredible $27,000 per man, woman, and child (including those who wouldn’t qualify for a Gap credit card). The rising cost of oil is sparking inflation fears doused only by SUV-owner tears. And, even the National Association of Realtors has acknowledged that some homes in isolated markets in certain parts of the country might be overpriced. In other words, the housing market bubble burst is imminent! Just how worried are we? Well, we were so distraught last weekend that 91 million of us headed to the malls for a little holiday shopping to help cheer us up. We needed a lot of cheering up, too. On average, we dropped more than $300 per person. And, that’s before the turkey soup was even simmering. Not that I keep a particularly keen eye on my window of opportunity for procrastination, but we have almost four weeks until Christmas! Despite all of the soothsayers predicting a horrible season for retailers, I am going on record to predict a national December spending orgy the likes of which we have never seen. OK, that may be a bit optimistic, but I do believe that retailers, and their extended families, will be quite jovial after tallying their holiday take, probably sometime during halftime of the Rose Bowl.Yes, I know it’s a bold prediction. It mocks the evidence scrolling across the screen on CNN as we hyperventilate on the treadmill trying to burn off the pumpkin pie. The American people are saying that they are worried. All the signs point to gloom and doom this holiday season. It’s time to save for that rainy day now that the skies are graying and thunder is roiling just below the horizon.Does my contrarian forecast mean that I believe the average American shopper is a liar? Let me rephrase that: Do I believe that the pollsters are wrong?No, I do not. I believe my fellow citizens when they express their concerns. I have the same fears. I feel the unease. Something is up and it’s about to go down. I don’t know what, but it is coming.It’s just that I understand how the disparity between what we do and what we say occurs in this newer new economy. Nowadays, only nuts squirrel away something for the winter. It’s almost laughable the way we used to “prudently” cut back on our spending when we foresaw more difficult times ahead.Today we are blessed to be living in the age of that marvelous consumer friendly device invented for just such occasions as a modern recession. Formerly known as the Home Equity Line of Credit, the Home Equity Line of Prestige (HELP) is the must-have item of the season.Lose your job? HELP is on the way. Your annual raise not keeping up with inflation, or the Joneses? HELP is as close as an Internet credit check. Don’t mind paying off that European vacation over 30 years? HELP is just a point or two away. What? You say you don’t own a home? That’s no excuse not to leverage like Atlas. Credit is as easy as opening your junk mail. In fact, if you rent your home and aren’t racking up interest payments, you’ve taken your eye off the ball and probably aren’t having one either. Statistics show that renters have more consumer debt than homeowners! According to information compiled by the Federal Reserve Board, household debt payments as a percentage of disposable income have increased from 11 percent in 1995 to more than 13.5 percent now. Considering that interest rates have plummeted during that period, you can bet that the average American household is borrowing like a second-term Republican.But, this only explains how we spend in the face of adversity. What would HELP be without the simultaneous evolution of the Big-Box Outlet for Ordinary Merchandise (B-BOOM)? With the advent of Wal-Mart, Kmart, and Tar-Mart, for the first time in history we actually have the real opportunity to go broke buying great deals. In this new economy, with all of the HELP available, we can head to the nearest B-BOOM in order to continually buy stuff that wears out, goes out or both, almost before we can get it home. Of course we realize that over the long haul it is far more expensive to buy crap than it is to purchase quality items to begin with, but we can’t break the cycle. It’s fun to waste money!The other benefit of B-BOOMs is that, for every necessity we go there for, we walk out with 10 other things that we had no intention of buying. In the old days I would have liked to see you walk into a Main Street shoe store and come out with a pair of Keds, two snow tires, an automatic garden hose rewinder, a sleeve of Top Flight X-out golf balls, and a quart of buttermilk. Are you still worried about a slowing economy? Not today, honey! I have to assemble the new, oak-veneered home entertainment center.I tell you this whole new setup is a license to spend in the face of adversity! This is why The Index of Consumer Sentiment (TICS) is about as obsolete as the savings account. It’s no longer the warning sign that it once was. Being scared doesn’t mean we have to become tightwads. In days gone by, national worries caused us to tighten our belts and duck for shelter. That was the old economy. Now, when the portentous TICS are heard, we run straight towards the B-BOOM and pray for HELP.Roger Marolt realizes that the latest TICS indicate that consumers are less worried than a month ago. He attributes this to the arrival of eggnog at the grocery stores. Pour it on at roger@maroltllp.com