Project for Philosophical Evaluations of the Economy |
__________________________________________________________________________________________
Banking on the American Consumer
Dialog on the future of the world economy between Noah denkt™ and its Alter Ego, first drafted on
Feb. 13, published on Feb. 15, 2009
-------------------------------------------------------------------------------------------------------------------------------------------
Question by Alter Ego of Noah denkt™ (AE): Supposedly Noah denkt™ agrees with the observation that a strong
growth of the world economy depends in large measure on the spending power of the US consumer?
Answer by Noah denkt™ (Nd): Correct!
AE: Do you also concur with the notion, that the American consumer eventually has to increase his savings rate in
order to reach a sustainable modus vivendi for himself?
Nd: Yes, we do.
AE: And third question: Do you also agree with the interpretation that there is a sea change going on in the US
economy right now, which will ultimately result in a new and increased thriftiness on the part of the American
consumer? In other words, do you associate yourself with the interpretation that the voracious spending days of
the American consumer are over?
Nd: No, we do not.
AE: Why is that?
Nd: Because, we do not believe that your average US consumer has as yet the determination and the backbone
to resist over a sustained period of time the temptations of a consumerism that is being advertised to him. In other
words, we presume that once the current, economy shock subsides, the US consumer will go back to his or her
old debt-incurring ways.
AE: What makes you so sure about this?
Nd: It’s the fact that optimism, the desire for convenience and the lust for new gadgets are so fundamental to the
American psyche and the American way of life, that a six-month or even a two-year recession won’t be enough to
help him overcome this mentality. After all, people nowadays have an ever decreasing attention span. And so it is
quite unlikely that they will be able to remember sticking with something whose immediate importance is no longer
evident to them.
AE: But is frugality truly a distant concept for this consumer given that he still has to pay off the credit-card and
mortgage debt of previous years?
Nd: Granted, these debts may hurt for a while. But once the general sense of angst and panic subsides that is
now being whipped up in the economy, and confidence kicks in again, then, the lingering debt issue will be
relegated to status of a secondary nuisance only.
AE: And you think that a badly burned banking system will allow this to happen?
Nd: Yes, because competition will force them to go back to their old aggressive ways.
AE: In other words, you believe that it is only a matter of time until we see a return of the old deficit-driven bubble
economy?
Nd: Exactly! And, what’s more this return will come about much sooner than most people seem to think it possible
right now.
AE: And what do you make of that?
Nd: Well, it has its pros and cons.
AE: Why?
Nd: Because without this US optimism it would be impossible to lift the emerging economies so rapidly out of their
doldrums. On the other hand, however, it is clear that these powerful and rapid changes that the US optimism
makes possible, will come with considerable pain as well. And so in the end it is probably a zero-sum equation
whether you prefer a slower growth in the World economy and thereby keep people in their poverty for longer, or
whether you prefer a rapid change with the inevitable corrections, that such velocity entails.
AE: In other words, it really does not matter whichever way destiny turns out?
Nd: Correct. You cannot fight what’s coming at you anyway.
AE: Well, the truth is that I am not so sure about all that. After all, we are not living in the US. And so, your Alter
Ego finds it quite difficult to adequately gauge the changes that are going on in the American psyche right now.
Nd: That’s a fair point, but it doesn’t lead Noah denkt™ to change its opinion.
AE: So you truly believe that you can engage in some telediagnostics here?
Nd: Yeap!
AE: Why?
Nd: Because our general experience in life and our previous encounter with the American culture leads us to
conclude that in this case such a telediagnostic approach is acceptable.
AE: Again, we disagree with Noah denkt™ on this.
Nd: As usual.
AE: Yes, as usual.
Nd: But, so be it.
Dialog on the future of the world economy between Noah denkt™ and its Alter Ego, first drafted on
Feb. 13, published on Feb. 15, 2009
-------------------------------------------------------------------------------------------------------------------------------------------
Question by Alter Ego of Noah denkt™ (AE): Supposedly Noah denkt™ agrees with the observation that a strong
growth of the world economy depends in large measure on the spending power of the US consumer?
Answer by Noah denkt™ (Nd): Correct!
AE: Do you also concur with the notion, that the American consumer eventually has to increase his savings rate in
order to reach a sustainable modus vivendi for himself?
Nd: Yes, we do.
AE: And third question: Do you also agree with the interpretation that there is a sea change going on in the US
economy right now, which will ultimately result in a new and increased thriftiness on the part of the American
consumer? In other words, do you associate yourself with the interpretation that the voracious spending days of
the American consumer are over?
Nd: No, we do not.
AE: Why is that?
Nd: Because, we do not believe that your average US consumer has as yet the determination and the backbone
to resist over a sustained period of time the temptations of a consumerism that is being advertised to him. In other
words, we presume that once the current, economy shock subsides, the US consumer will go back to his or her
old debt-incurring ways.
AE: What makes you so sure about this?
Nd: It’s the fact that optimism, the desire for convenience and the lust for new gadgets are so fundamental to the
American psyche and the American way of life, that a six-month or even a two-year recession won’t be enough to
help him overcome this mentality. After all, people nowadays have an ever decreasing attention span. And so it is
quite unlikely that they will be able to remember sticking with something whose immediate importance is no longer
evident to them.
AE: But is frugality truly a distant concept for this consumer given that he still has to pay off the credit-card and
mortgage debt of previous years?
Nd: Granted, these debts may hurt for a while. But once the general sense of angst and panic subsides that is
now being whipped up in the economy, and confidence kicks in again, then, the lingering debt issue will be
relegated to status of a secondary nuisance only.
AE: And you think that a badly burned banking system will allow this to happen?
Nd: Yes, because competition will force them to go back to their old aggressive ways.
AE: In other words, you believe that it is only a matter of time until we see a return of the old deficit-driven bubble
economy?
Nd: Exactly! And, what’s more this return will come about much sooner than most people seem to think it possible
right now.
AE: And what do you make of that?
Nd: Well, it has its pros and cons.
AE: Why?
Nd: Because without this US optimism it would be impossible to lift the emerging economies so rapidly out of their
doldrums. On the other hand, however, it is clear that these powerful and rapid changes that the US optimism
makes possible, will come with considerable pain as well. And so in the end it is probably a zero-sum equation
whether you prefer a slower growth in the World economy and thereby keep people in their poverty for longer, or
whether you prefer a rapid change with the inevitable corrections, that such velocity entails.
AE: In other words, it really does not matter whichever way destiny turns out?
Nd: Correct. You cannot fight what’s coming at you anyway.
AE: Well, the truth is that I am not so sure about all that. After all, we are not living in the US. And so, your Alter
Ego finds it quite difficult to adequately gauge the changes that are going on in the American psyche right now.
Nd: That’s a fair point, but it doesn’t lead Noah denkt™ to change its opinion.
AE: So you truly believe that you can engage in some telediagnostics here?
Nd: Yeap!
AE: Why?
Nd: Because our general experience in life and our previous encounter with the American culture leads us to
conclude that in this case such a telediagnostic approach is acceptable.
AE: Again, we disagree with Noah denkt™ on this.
Nd: As usual.
AE: Yes, as usual.
Nd: But, so be it.
| © Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved. Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all rights to the texts that have been published under the Noah denkt™brand name are reserved by WL & his LSV. The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended Legal Notice. |
__________________________________________________________________________________________