Pundits sent back to the drawing board.
Consumer sentiment surveys have captured the “Trump Effect” elegantly. All major sentiment surveys agree: Consumer confidence has surged since the election. The University of Michigan consumer sentiment survey, released today, at 98.1 – while down a tiny 0.1 from the miraculous post-election jump a month ago – was still the second highest in 12 years, last month having been the highest.
But there’s now an intense partisan line dividing how consumers feel about the economy.
“The post-election surge in optimism was accompanied by an unprecedented degree of both positive and negative concerns about the incoming administration spontaneously mentioned when asked about economic news,” explained the survey’s chief economist, Richard Curtin.
This partisan divide between those who favorably mentioned the policies of the next government, and those who unfavorably mentioned them reached an extraordinary gap of 42.7 points in the expectation index.
And there’s one more thing: these jumps in consumer sentiment translated into a disconcerting lack of spending over the holiday shopping season.
Sales at retailers in the US edged up a disappointing 0.6% in December, from November, on a seasonally adjusted basis, according the Commerce Department today. Excluding sales at auto and parts retailers, which account for 21% of total retail sales, and excluding sales at gas stations, which benefited from sharply higher gasoline prices, retail sales were flat.
This got pundits worried about weaker economic growth in the fourth quarter.
Note that auto and parts sales, as reported by the Commerce Department here, are survey-based estimates denominated in dollars. The monthly new vehicle sales reported early in the month by automakers are based on the new vehicles actually sold by dealers to their customers, measured in vehicles (regardless of price), not dollars.
Sales at “General merchandise” stores declined 0.5%. In this group, sales at department stores declined -0.6%. Sales at “miscellaneous retailers” fell 1%.
However, “nonstore retailers,” which includes ecommerce sales and things like door-to-door sales, jumped 1.3%. Ecommerce sales have been rocketing higher since the 1990s, seriously eating into the sales of brick-and-mortar retailers. Department store sales peaked during the holiday period of 2000.
The chart going back to 1999 compares monthly department store sales and nonstore retail sales. They’re seasonally adjusted to eliminate the noise that the strong seasonal patterns of retail sales create. But they’re not adjusted for inflation; so considering the impact of rising prices on sales over these years, the descent of department stores into irrelevance is even clearer:
Even today, you still end up buying a new vehicle from a brick-and-mortar dealer (though you can do your shopping around on line), due to the complexity of the transaction, state franchise laws, the expense of delivering a vehicle over long distances, and the like. But most every other retail product, you can buy online and get shipped to you.
So when big retailers reported same-store sales for the holiday period – November and December combined – the media commonly attached the word “dismal” to those reports.
This was a shock to pundits. Consumers where suddenly getting enthusiastic and consumer confidence indices soared, following the election. So retail spending was expected to surge too. But it didn’t. And a growing number of department stores and specialty retailers reported declining holiday sales compared to last year, interspersed with announcements of store closings and layoffs.
J.C Penney reported a near 1% decline over the holiday period on a same-store basis. Kohl’s and Macy’s reported a 2% decline. Sales at Sears – which some folks think will declare bankruptcy this year but not before the second half – plunged 13%.
Hudson’s Bay Company, which owns Saks Fifth Avenue and Lord & Taylor, reported that same-store sales fell nearly 1%. Private-Equity owned Neiman Marcus apparently saw such lousy results over the holidays that it scrapped its already delayed IPO, filed 15 months ago. It didn’t announce holiday sales, but sales in its most recent quarter through October 31 fell 8% from a year ago, the fifth quarter in a row of sales declines.
Some of the online divisions of department stores are doing well, such as Macy’s, even as it is shuttering brick-and-mortar stores and laying off workers. But brick-and-mortar department store locations are getting squeezed from all sides: online retailers, their own online retail divisions, discounters, now rising gasoline prices, and consumers with limited means to spend – no matter how they feel about the economy.
The hype about auto sales has been deafening, even as US “car recession” spreads among the largest automakers. Read… Annual US Auto Sales Fell for First Time since 2009 at GM, Ford, Fiat-Chrysler, Toyota, VW, BMW…
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The stoic portraits of presidents and great guys on olive drab parchment are becoming more distant …….as we speak?
(new plans are for the fed to pull everything out of circulation as it retires old issues and replace with short term bills and much higher borrowing costs!)
Fixed interest rates and net neutrality gone!
Some years back maybe 20? the US, far behind in anti-counterfeit tech, did its first re-vamp of the $100 in decades.
Panic broke out in foreign places, including Moscow.
Then came reassurance- ‘no. no, don’t worry. The old bills are still good. We’re just changing the design.’
And they might have added: This is not Zaire.
The Fed is not going to do an ‘India’
The threat to the value of US currency is inflation, not repudiation.
“The threat to the value of US currency is inflation, not repudiation.”
DEBASEMENT
I think people are spending less on stuff and more on activities. The stores weren’t that busy during the season, but the restaurant where we had Xmas Eve dinner was busier than I expected. We experienced that last year as well.
I also came across an upscale women’s consignment store with many young shoppers and a good selection of items. It seems the stigma of “used items” is gone and many people are recycling what they don’t need. I think everybody is tired of the made in China crap.
Yes, that would make sense, and it has been a theme for the past couple of years to explain the decline in brick-and-mortar sales.
But in this report for December, sales at “Food Services and Drinking Places” was actually one of the categories that declined (-0.8% from November). By comparison, last year, it rose from November to December.
That said, year-over-year sales at these “Food Services and Drinking Places” was still up 3%.
Declining real wages for thirty five years and there is confusion regards retail sales? Income needs to exceed outgo, debt is not an asset. People with no willingness to work, no drive to excel, no thought of personal responsibility deserve the economy they get. Constant vilification of our industry, economy, and consumerism does not produce consumers.
You must be a Trump voter. In a nation where the .01% possess 90% of the wealth, everyone else has to fight for the crumbs. Job growth is limited to minimum wage jobs. People with intelligence realize that the future is questionable with a collapsed ecosystem. Freezing cold, brutal heat waves, devastating forest fires, monster storms, raging floods, droughts… It’s all coming our way. Next year will be worse than this year. Consumer spending will not be that important. Reality is a bitch!
Of course it is the common man’s fault! It certainly could not be the fault of our assorted political, military and economic leaders! If the rich have taken an enormous amount of wealth from the people, impoverishing and immiserating them, the were perfectly within their rights! After all, they were lazy, irresponsible, and lacking in ambition! Why, I’ll bet if I offered a high paying, high responsibility, full time job with benefits and opportunities for advancement, practically no one would be interested in it and there would be very few applicants. Right?
when the economy goes or is going down. 1 Product/Drug’s sale’s, always increase.
I live near DC. Meet my business partner for lunch from time to time. One thing I’ve noticed is that the lunch rush doesn’t seem to exist anymore. At least not at the restaurants we frequent.
I can walk in at noon and there are plenty of empty tables to choose from.
I think the idea of “experience spending” of the millennials is about a realistic as “consumer confidence”.
There is a declining consumer base, as boomers retire they down size and spend a larger share of their now smaller income on health care and leisure. In many cases their parents are deceased and children are adults so gift purchases are way down. They had smaller families as have their children, if any at all, which accounts for lower dollar volume sales even if the amount per buyer remains the same or increases slightly. Wage stagnation, elder care cost ( not all boomers planned for retirement), housing cost, vehicle cost, health care all are reducing the amount left to spend which leads to the rise in second hand selling and buying. This may also explain the 9 year static trend in credit card debt, fewer cards, more debt.
I saw a statistic that one third of U.S. counties have declining population. And I have researched many counties to confirm it is true in rural and some urban counties and cities (Reno actually, where I was tempted to buy a cheap condo). Yet, when I mention this to people, many don’t believe it.
Hmmmmm…… “planned for retirement” ? How many of them had their pensions and IRA’s stolen from them?
Check out Paul Westra’s comments on restaurant sales. Great stuff, weak sales ahead.
Funny CNBC is trumpeting a 4% retail sales boost over the holidays. Yes I know CNBC is a joke. Just goes to show you that fake news is everywhere.
They were probably talking about total retail sales, including cars and gasoline, year-over-year. There are a lot of numbers in these reports, and when they’re presented on TV, it’s not always clear which set of numbers they’re talking about.
You are correct Sir!
I don’t necessarily think the increase spending is false. None of the stores were packed, but the shoppers there were buying. I spent more this year, prices were higher and selections were limited.
Dow 60K this year then. Too many upcoming disasters and the Fed will be forced to backstop all of them leading to nirvana.
Wolf, How high do you think the stock market can be pumped up before it bursts and collapses? I somehow don’t see the Dow reaching the mega range.
Of course, when it finally does go boom, it will be a BIG Surprise to the powers that be//////
Psychologically, the health of the Dow is translated into feelings about the economy, but a look at the Caracas stock exchange, which outperformed almost all others last year in a nation whose economy can only be described as a disaster, tells the story: share prices rise with inflation, which is tied to the massive rise in debt- over $10 trillion was added during the Obama administration, and after Trump’s election, bond prices fell in the expectation of new “infrastructure” debt. The Dow could continue on up.
Ted was right about CNBC’s cheerleading on The Nightly Business Report, the most widely viewed business show. And, BTW, ditto for the Wall Street Journal. But the share prices of the retailers are in the tank.
Latest inventory-to-sales numbers back up the “dismal” retail sales.
http://www.mishtalk.com/2017/01/13/inventory-to-sales-numbers-whats-happening/
“Latest inventory-to-sales numbers back up the “dismal” retail sales.”
The retail sales numbers were decent enough if you look Year Over Year.
Its the amount of “stuff” thats not selling, piled in the back room and at the warehouse that counts.
Retail year-over-year is a lagging indicator. Inventory-to-sales numbers stare at you right in the face, in real time.
yet twice in the last quarter I have ordered appliances for my daughter and had them take two months or more to be delivered..
So much for inventory on hand.. at least not appliances.. One washing machine and one refrigerator..
If spending is up (big if) how many are putting these purchases- whether restaurant, gasoline or whatever activities, experiences, used items or new, on a credit cards with 28% + interest? I watched a Mark Dice video as he was interviewing folks exiting big box stores with their big box purchases, during the Christmas shopping rush, and I could not believe how many consumers were buying these items with credit cards. Unbelievable.
The stores prefer customers not use cash and if you are buying an expensive item it might be dangerous as well. If you pay with a debit card, you don’t have the same protections as with a credit card. Then there’s the internet. Sometimes it makes sense to use a credit card.
Total Credit card debt in the USA is actually lower (in real terms) than it was in Q4 2007. It was $700 billion then and it is $700 billion now…. 9 years later.
700 billion? That all? I think “consumers” can step that up a few billion and tack on some more debt. Who needs to pay for anything is cash anyway. It’s just not safe.
Why wouldnt u buy things on credit cards? U get rewards. I varely see anyone use cash and even fewer use checks anymore. I rately even have a follar in my wallet btw
Looking at the chart comparing Department stores to E Sales.. Am I correct that E sales are 49 bn and Department stores are only 12.5 bn?
Is E commerce now 4x the size of all retail or is that just department stores? Not counting the big boxes like Costco, Dicks, Best Buys etc.?
So was this a good Christmas for retail overall or not?
I know Sears, Kohls, and Macy’s are having trouble but are all of the retail stores? If they are why are some still building new stores?
You’re reading the numbers correctly. It was a lousy Christmas for brick-and-mortar in general, including restaurants and the like (not just department stores). And it was a good one for ecommerce. So flat overall (except autos and gas) on a month to month basis. There had been stronger months earlier in 2016, and so the year-over-year numbers still look decent (except department stores).
I don’t think big box retailers are adding to their store fleet in any meaningful way. Probably the opposite. Look at Macys, Sears and others.
In Medford Oregon Field and Stream and Dicks built during 2016, Costco is building a new bigger place and I understand Cabela has a store planned.. New Taco Bell was just built and a Red Robin in Grants Pass and some new structures going up on Crater Lake Hwy which I don’t know who yet.. But there is still retail expansion going on in my area even though it seems rather dumb as housing isn’t expanding that much. So new stores are just going to canabilze existing retail?
It is the same ole story of those at the top make plans that have little to do with reality it seems.
I dont believe any of those are considered to be dept stores.
I would think Field and Steam and Dicks are as much of a department store as Sears.. Costco is something like that…
And restaurants are part of spending and spending has been mostly flat.
Why build into this slow economy at all? Hope and prayer of just totally out of touch with reality?
With our country having 20 trillion in debt and the economy not improving I am not surprised at all. In fact I was anticipating it hadn’t been good for retailers. I know as for me and my family over the last 8 years we have been busy getting our financial house in order. No credit card debt no car loans and have been paying extra on our mortgage so it will be paid in full in 7 years. When you have debt you are a slave to it and I don’t think that is healthy for anyone.
Out of debt, out of danger.
In the end, it is what one is that makes for a person’s happiness, and not what one has.
As we can see, even the greatest riches cannot begin to fill an empty heart and an empty soul, which no avarice can cure.
The pursuit of happiness can never be a true goal because happiness can only be transient, and instead, the wise goal is the pursuit of contentment.
***
Remember always that Diogenes the dog, in his search for an honest man, in the end, gave up.
Thank you, Mr. Map, sagacious as always…
Truth! This was my life before the “Second Great Depression” and it continues today.
We’ve been following the same model. We’re down to one car payment now. Everything goes on the credit card but we don’t carry any balances. Wife likes her CC points.
The problem though is that you and I aren’t good for the economy. We need more people to get deeper in debt buying things they don’t really need to keep the economy going.
“The problem though is that you and I aren’t good for the economy. We need more people to get deeper in debt buying things they don’t really need to keep the economy going.”
You talking about the US or the chinese Economy.
The china produces most of the crud Americans borrow to buy. The chines Economy benefits far more than the US, when Americans borrow to buy chinese crud they mostly dont need, that will fail quickly, so they have to borrow and buy again. Mostly to Keep up with the neighbour’s..
The national debt has no vorrelation with retail sales
Aloha Friends…grew up in Retailing,started when I was 16. I have over these many years seen a continuous Morphing of the Entire retail landscape. While it may sound Simplistic…the Majority of Consumers are ALWAYS Looking for Convenience and VALUE (how hard they look is reflective of their Economic conditions) So,the Continuing Increase in Sales and Shopping advantages provided IN the Electronic Marketplace when factored into an almost Decade-Long American Economic Malaise,should come as no Surprise does it..? lolol Also,since NO Cash trades Hands,certain Governmental Sectors must be ecstatic…true? Thanks for reading,aloha
That “slow death of dept store sales” chart is misleading in the sense that ‘the department stores’ also have online stores that are participating in the advance of the online sales.
Or are the two plots distinct??
Let me try to answer your questions this way: Macy’s ecommerce sales would be in the ecommerce data. Macy’s sales at its brick-and-mortar locations would be in the department store sales numbers.
So Macy’s might do well as an ecommerce retailer, even as its brick-and-mortal department stores and sales are dwindling. If Macy’s shuts down all its stores but has a vibrant ecommerce presence, it would no longer be a “department store” but a pure ecommerce retailer.
How are returns accounted, brick ‘n mortar v. ecommerce? My enquiries have not elicited a straight answer, although I have been repeatedly assured that the relevant statistics have been routinely obscured in Europe and then in the U.S. since they were initiated.
A bit of clarity here would be much appreciated. Thanks.
This report by the Census Bureau is survey based. They don’t account for actual sales. They sample and then make estimates based on that sample. This is the “advance estimate,” which is their first estimate for that month. There are later estimates and revisions as data becomes clearer.
Returns at brick-and-mortar v. ecommerce sales data are also based on these surveys. The returns that fall into December are not an issue. The returns that fall into the following year are an issue. But the figures are seasonally adjusted, which tries to account for the annual stream of returns.
If you look at the unadjusted data, it’s a whild ride from month to month, with the holiday season spike very exaggerated.
For more info, the main page of the report is this….
https://www.census.gov/retail/index.html
Click on the first “PDF” for the summary report. There is a section in this report, titled “Estimated Measures of Sampling Variability and Revision to Advance Estimates Dec. 2016,” that gets into the sampling issues.
Click on the other links for more data and different formats.
Here is the main page on how the data is collected…
http://www.census.gov/retail/how_surveys_are_collected.html
I hope this is helpful. However, “clarity” is probably the last thing we’re going to get from economic data, much of which is survey-based estimates :-]
That’s byzantine, but it is helpful. I’ll get it sorted. Thank you.
Rhonda’s simple analysis is right on. If the retail sales numbers are in fact a long term trend, it is a good thing.
Americans waste too much money on crap. It’s time they move toward debt reduction, smaller dwellings, functional fair trade cotton clothing, cut the cable TV cord, eat organic chicken (Costco) and vegetables, and drink less and get high less so they will be more alert and less numb “when the shit goes down.”
When our gluttonous nation is 5% of the world’s population and we use 20-25% of its natural resources, we are doomed to perennial imperial wars, defending against terrorism, and always finding a bogus rationalization to not stop polluting our water and air.
The Trump wannabees think luxury and gluttony is glamorous and something to emulate. As Walter Map so aptly alluded: Unnecessary consumption is the addiction of lost souls.
On the other hand, it looks like I was too early shorting the 20 Yr Treasury!
Last spring I wrote an article on shorting in this crazy market. It’s titled, “This is Why I Don’t Short Anything Anymore.” Among other things, it says that unless you’re big enough to MAKE something go down, like Muddy Waters, you’ll have the deck stacked against you, with a gain/loss relationship that is totally out of whack.
http://wolfstreet.com/2016/03/08/this-is-why-i-dont-short-anything-anymore/
I hope your Treasury short works out for you. But do read the article :-]
Yes the only thing to short these days is currency, indexes and commodity’s, and all in short term, with tight trailing stops.
I 95% agree with you, Wolf. I rarely short stocks – as investors want to be bullish with stocks more than doomsayers.
Re: shorting the 20 yr. US Treasury, it is all about rising yields – which has a positive relationship to a bullish stock market.
Technical analysis helps one temper potential losses when going long or short by only investing when the ETF or stock sees a S/T pullback in a bullish trend.
Thanks for your suggestion.
I think naked short without purchasing option for protection is a recipe for disaster. The option might eat into your profit, but it’s your insurance.
A year ago, I thought I had a great system for shorting the stocks through options, and I actually earned relatively huge profit on 3 trades; but all the other wrong trades that I lost money on, ate so much of my profit that when it was all done, I was down $5K. If it was not for 3 big winners, I would have been down far more than $5K. But my conclusion was the same that shorting in a manipulated market will never earn you profit. Current stock market is all smoke and mirror; so, small investors are not going to win.
That screams poor risk management.
Everybody does it at some point. it’s part of the learning curve.
Aloha Cyrus…have you Never heard of the Fed’s ‘Plunge Protection Team’….? aloha
d: What screams of poor management?
The win loss ratio.
You can pick good/profitable trades. You proved that.
But the profit from those trades is lost on other trades. + capital.
This says loudly the risk reward ratio’s were wrong. This is poor risk management.
All my big losses and there have been some % wise.
Were due to not obeying the Risk/Reward ratio rules and walking, at the beginning.
If you run a 2/1 R/R Ratio. You only have to be wright 4/10 to make money.
Consistently.
I do this on the S & P Index, all the time using my indicators, and make more than a living.
Hard R/R rules, and trailing stop, only way.
Nik: No way there is a plunge protection squad; no, it’s just the gremlins in the Dow and Nasdaq computer systems. Gremlins work in mysterious ways :]-
d:
Thanks for your explanation. Do you recommend any text or online source that teaches investment risk management?
Look at some of the FX trading sites, you will have to join (No money involved).
FXCM used to have it all in TXT now I think its gone to video’s.
All of them have some “Risk management” information.
FXCM have a good attitude it that they want the customer to stick around and make at least a little (So they continue to) So they tend to try and educate their customers to do so.
Or at least they used to. I dont do so much with them now as they changed the law here trying force everybody to use local brokers, keeping they fund’s and RECORDS in the country. FXCM said you connect from this country we can’t service you any more so now I am elsewhere. But not with a brokerage in the country as they tried to force.
Thanks d. I appreciate the info.
The vast majority of americans do not agree with your posted views. I personally have a 6000 sq ft house, 650 sq ft deck, game rm, exercise rm w/commercial equipmnt, theater rm, game rm, conservatory professionally done playroom, 2 story family ro and foyer, study, formal living rm/library with 500+ easton press leather books, hot tub, pool table, playground in fenced backyard, suv and my bmw, gated community, etc and i want much more. We do, however, eat mostly organic, with meals provided by blue apron and hello fresh.
Absolutely the last thing I would want, or bray about is being in a ‘gated community’, even the words make me nauseous.
But I do live in Canada.
In March of 2003, my ’95 Civic was stolen from my driveway around 1:00 am. Of course, I drilled down a few holes into the asphalt where my driveway meets the alley. Then, I cemented in 2″ diameter thick steel poles and welded across them with a 12′ gate that locks in the center of the entryway to my driveway.
No more auto thefts, and now I have a ‘gated community’ (Ok, only for me). As far as I know, mine is the only gated community in South Minneapolis. Sweet, eh?
Ya- I had a boat trailer stolen from my driveway. After that I parked it inside the yard.
In Vancouver the cheapest house (a tear down) in the most expensive areas costs over a million.
The founder of Lululemon has a 75 million dollar house, and may have its own gates. But it’s not in a gated community.
But in Point Grey, Kerrisdale etc. the whole point of the neighborhood is that it isn’t gated.
And I am to the eyeballs in debt; I’m so proud of my McMansion, and my great decisions in life :).
Grandiosity is a terrible thing to waste!
Did you miss the /sarc?
well played
You sound like a Whole Foods Market Republican!
Bragging about being in sync with a majority of Americans is not a badge of honor. The majority of Americans are obese, are in too much debt, and only speak English. Not the smartest bulbs in the lamp store.
Would that this were a better world and that the human beast were a better animal. Dream on gentle soul!
Good luck with your gamble! ^,..,^
JerryBear: Yeah, that’s a dream all right; this planet would have been far better off if the specie which came to dominate it would have been from a primate such as Bonobo rather than the filth that we come from. I don’t hold much hope for humans in the long run.
I don’t see the economy itself as being in terrible shape. I see an enormous number of people who probably had anticipated a much better trajectory for there lives than what actually happened.
The simple fact is that the majority of the US electorate adopted an ideology that allowed almost all of the productivity gains they achieved to be put into the hands of capital owners instead of their wages.
That sea change has resulted in exactly the economy you would expect: immense bifurcation of income amongst the classes, weak consumer sales, slow economic growth, and poorer prospects for many.
Hence the election of Mr. Trump. And while he is an expression of the pain, he is also has personally benefitted from the ideology and will not be able to make significant changes. Though I expect him to be able to make a few marginal changes and change the conversation somewhat which may be of value to many.
This is our new America. Folks need to learn to adopt their lifestyles and hopes accordingly. Life can still be very good if you make the right choices.
American workers who have passively let the corporate bought and sold politicians dumb down their rights and bargaining power deserve their economic plight.
They need to take responsibility for their own fear and anger and irresponsible acquiescence to fake leaders before their lives will improve economically.
I know why Trump won the Electoral College minority vote. He promised help in the form of authoritarian bullying. But bullying in any form eventually fails because people ultimately see the bully for what he is.
“Don’t follow leaders; watch for parking meters” – Bob Dylan
I don’t disagree. But I don’t think most folks have it in them to understand the root cause of their plight. Given that, it isn’t something that is fixable by the American electoral system unless it gets bad enough, ala the Great Depression. So those who benefit from the system have to walk a fine line of leaving just enough behind, and creating enough division, that the population will continue to fall in line. I think they can do it.
Given that generally growing prosperity will no longer be a national birthright, the question becomes how do you individually prosper within this new system. Obviously empathy for your fellow American needs to be discarded in some way.
“So those who benefit from the system have to walk a fine line of leaving just enough behind, and creating enough division, that the population will continue to fall in line. I think they can do it.”
A couple of things here.. First as the line has been getting thinner and thinner as the years progress, the possibility of error increases.. And then there are always the unintended consequences.
There is a theory that the further a person is from those doing the work, the less they know about what their rules do. This concept is documented in the TV show Undercover Boss. I think it is very true and very relevant to your contention that “they can do it”. “They” don’t have a clue what goes on in the real world of the average American.
So when looking at those in charge not making an error in judgement the likely hood is pretty good. Having grown up on the bottom and spending most of my life in and around the working people, I doubt that I could even do it without error. So I have no doubt that there is NO Way for Donald to fix what is wrong as he is one of those who are wrong. It isn’t only about great buildings and great power. It is about everyone having a meaningful life and the right to life, liberty and their own pursuit of happiness.
And I don’t doubt that they can get it wrong. But I think that is where division comes in. Obviously they got it wrong for the African-American portion of the population. But kept enough poor whites just happy enough to make the oppression acceptable.
Today if we can keep the professional classes happy enough (of which I belong) and the power of the police strong enough, the “deplorables” can be kept in line. Focusing of course on the ideology that the powerlessness of former white working class is the result of their personal failure.
Maintaining the division and a powerful police state gives time for adjustments. That’s why I think they can do it.
“Given that, it isn’t something that is fixable by the American electoral system unless it gets bad enough,”
WHY NOT????????
Don’t try to fix the result of the problem.
Which is what the US is doing.
Without first finding, and fixing, the “ROOT CAUSE” Causes, of the problem.
Which in this case, is the Oligarch owned duopoly. Due to the electoral campaign funding system
Find and fix the CAUSES of the problem. And then the situation will change, maybe in the long term for the better.
Term limit’s would also help.
d, Knowing one of the main problems is a start but figuring out how to fix it keeps being tried. First there was Perot, then the Tea Party, then Occupy Wall Street. Even BO was the public’s attempt and desire to fix the problem of taxation and control without representation. All have failed. Do you have any ideas. I even think Trump in an odd convoluted way is/was a cry from the bottom to change the narrative.
Term limits don’t really work when the two parties are so totally owned and controlled by the elite power structure. It becomes no different than how the regulatory agencies work with just a rotation of the insiders.
I think that people have cognitive dissonance. On top of that the Oligarchs have access to some of the best social scientists on the planet. They know how to divide and conquer and they play the American public against itself. It amazes me how people who actually benefited from the ADA are against it and how the poorest support the richest even though all the evidence shows that Trickle Down is a total lie and that inflation actually transfers the wealth upward but one of Trump’s promises are lower taxes for the rich and the corporations and tariffs which will cause inflation and higher prices.
Because of Human’s Nature, humans are rather easily led even if the road is down to hell.
When things finally get dark again, there will be a new leader rise. Whether that person leads to the light or dark is yet to be seen.
If you have a plan or a great idea about HOW to change in a non traditional, non violent way I wouldn’t mind reading it. Figuring out what is wrong has been easy. Finding a fix that would work has been so far impossible.
“All have failed. Do you have any ideas. I even think Trump in an odd convoluted way is/was a cry from the bottom to change the narrative. ”
He is.
“Term limits don’t really work when the two parties are so totally owned and controlled by the elite power structure. It becomes no different than how the regulatory agencies work with just a rotation of the insiders. ”
Term limits, are simply a mean’s to an end.
The electoral funding model that allows The “oligarchy” to own the duopoly . Must be changed to changed.
The current big players in the duopoly will not vote to get big money out of politics.
They are in fact wanting more “Oligarchy” influence.
Step 1, limit their tenure.
Then m some of them on the way out the door and other new not so corrupted, may be moved to start to reduce the “Oligarchy” control.
Same problem with tax reform the only reform you see is MORE taxes on the small people. For the same reason congress will not vote to cut its own gravy train.
Then you come to the senate .
Two from each state was designed to prevent a monopoly.
When it was done the corporate duopoly was unheard and unthough of.
Much of America is today underrepresented, so, go to three per state.
Which will allow more third party and independent voices.
Citizens united is a disaster for ordinary American’s..
You will not roll it back or get Campaign finance or tax reform in big moves.
Sanders is a bad person however some thing she wants are good .
Sanders wants his opponents financially ham strung.
Whilst he is unfettered.
His “movement” needs to be redirected, to term limits (Step 1) as he is never going to get big money out of politics, in 1 move. Or in a head on attack.
“The little ants, can eat the Giraffe”
If they go about it, the correct way.
American’s are to head on confrontational, so it becomes a money fight. This Issue can not be resolved in that manner. The Oligarchy will defeat the street, in that money fight, every time.
A violent revolutionary event will simply replace S98T bag’s, With worse S98t bag’s. look at history, happens every time.
So Various group’s want the money out of politics, for various reasons .
Step 1. “Term limit’s”.
A lot of states have term limits. Oregon is one of them and I honestly can’t say they have done any good. The parties control the system and decide who we get to chose from. Hasn’t made any difference as far as I can determine. Same game, just different faces… All obligated to their parties..
What the US needs are many parties and diverse groups who have to get along to govern.. The two party system needs to go away. Not whether a good person who actually represents their constituents can only serve one or two terms.
“A lot of states have term limits. Oregon is one of them and I honestly can’t say they have done any good. The parties control the system and decide who we get to chose from. Hasn’t made any difference as far as I can determine. Same game, just different faces… All obligated to their parties..”
Nobody has tried to take it further or work with it so you example is incomplete.
How do you propose to get congress and the senate. To cut off their own gravy train????????????
Limiting the bottom only (State Level) achieves little as the funding model dosent change, and the politicos simply move to unlimited area’s.
“All obligated to their parties”.
The Senator’s per state instead of two.More independent’s will get in.
“What the US needs are many parties and diverse groups who have to get along to govern.. The two party system needs to go away. ”
You have to break the Duopoly to do that. Not do a sander’s and try to hijack 1 half of it. The people who own the Duoply will not be interested in making it easy for you.
Term limit’s will help achieve that. why only 2 term’s? 3 would be Ok 3 term’s in congress and 3 term’s in the senate is a long time.
Something has to change to bring more change.
Understanding the root cause(s) requires that the information be given to you in a way that you recognize as factually correct, that you are emotionally prepared to receive it, and that you have a mechanism to act on it by voting for a Congressman who supports policies to fix the root cause.
The MSM will never provide the information, much less in a way that the average Joe is going to believe is factually correct, the information is likely to go against the average Joe’s value system of rugged individualism, and both Political parties are fully in the pockets of the oligarchs.
And voting 3rd party is just “throwing your vote away”.
There was no “sea change”. It has alesys been like that in the US and elsewhere. To think otherwise assumes you are using the 50s and 60s as some sort of eternal baseline for the trajectory in folks wellbeing, despite it being an aberration due to numerous global and domestic factors as well as it being from a very low baseline (read them by joyce carol oates for example) and the country experiencing massive problems far in excess to what we have now (civil rights-vietnam-emergence of inflation and housing shortages).
The sea change was the population adopting the corporatist agenda of free trade, low corporate taxes, extended protections of IP, and reducing regulations on the financial sector and quasi-monopolies. To say that people did not adopt this ideology is simply wrong IMHO.
The ’50s and ’60s were a time where increases in productivity did show up in working class wages. That wasn’t an aberration, it was due to the mix of accepted policies at the time.
There is no political system which has been able to oppress the majority indefinitely. None. If the jobs don’t come back, it is over. Your gated community isn’t going to save you. The military or the police aren’t going to save you, they are recruited from the underclasses. It becomes a numbers game, and the 99% win. Enjoy your toys while you can.
Maybe not indefinitely. But much,much longer than you or I would have thought possible.
“It becomes a numbers game, and the 99% win. Enjoy your toys while you can.”
The 99% dont win, ever.
As the scumbags they follow, become the new 1%, and do a worse job of everything, except stealing and corruption, than the people they threw out robbed and murdered, to get to be the new 1%.
Happens every time.
Violent revolution, hurt’s everybody, the poor the most.
“the majority of the US electorate adopted an ideology that allowed almost all of the productivity gains they achieved to be put into the hands of capital owners instead of their wages.”
How did the people do this to themselves?
I sure see things much differently. The Oligarchs took decades to change things and this had nothing to do with what the people wanted. The greed and hubris of privilege has changed the US but not for the better except for those who were privileged or very lucky. Those in power used the time ole divide and conquer techniques along with a lot of out right lies. There was no acquiescence by the general population except to vote for the lesser of two presented evils for many decades.
This may be our New America but I don’t think most people have been willing to adopt. Most people used debt to try and maintain what they couldn’t from wages and that played right into the hands of the Banksters. This all will come to a head and will collapse. The math makes this the only outcome possible. If debt can not be serviced it will be defaulted on or restructured. When you have an economy that is run by 70% consumer spending and that spending is dependent upon ever increasing debt, and those in power keep wages down so they can for ever have more, there really are no alternatives.
You’d better get ready for the changes. People are irrational when anger overtakes reason. And people are going to be angry when this finally implodes.
When debt cannot be repaid, bankruptcy is declared and productive assets are sold to repay the creditor. The creditor gets some portion of his money back, the purchaser gets productive assets, and the debtor is relieved of a burden.
There won’t be an implosion. Just grinding austerity for a portion of the population who will believe that if they just vote for the next guy, it will all be made better. Not to mention it will all be fixed by 3D printers or driverless cars.
It’s already imploding, you don’t want to believe it, but look at Europe unwinding and our political system shifting.
We will see. The Greeks have put up with far more than we would normally imagine, and Brexit still isn’t actually happening.
It’s a gorgeous day in central Florida and I’m heading out for drinks with friends on the intracoastal.
” Just grinding austerity for a portion of the population who will believe that if they just vote for the next guy, it will all be made better. ”
Prior returns do not dictate future profits. I see the US population becoming more and more angry. The Republicans have more than once tried to take away food stamps. The austerity you write about may happen and then again there may be an implosion. Time will tell and there are no guarantees either way. There has never in our history been a time when there was so much private debt with such an austere future.
Hmmmmmmm. At last a realist! But I cannot agree with the idea that we should just accept the way things are and hope for the best in our personal lives. The point is not just to understand what is going on, the point is to change things when they need changing. As an individual, you are powerless, but if you organize and start a movement, then you can have the power to change things. Nothing stays the same, our reality constantly changes and for a long time it has been going downhill. Don’t wait to see how bad it is going to get, you cannot make good plans assuming that things will remain the same as they are, they won’t! Work with other people to turn the direction of change around.
Individually, you can take a stand, Together we can make a difference.
Think about it!
Great thoughtful comments from Kent and economicminor. Thanks for your informative efforts.
Wow! I am amazed at the revolutionary spirit you guys are building up, most especially Petunia. She is absolutely right that you should not disregard the masses. They are the earth that all of the privileged stand upon and when the people are angered enough, that earth will tremble! Remember the French Revolution. The nobles had nothing but utter contempt for the people of France and paid little heed to their growing wrath until it was too late for most of them. Some of you seem to have a somewhat similar attitude towards the American People.
One model that can be safely thrown away is any model of socialism that is derived from the Russian Revolution. Marx made it clear that socialism can never be created from impoverished backwardness. When Lenin became aware that genuine Marxism could not work in Russia, he turned it into a fascist totalitarianism. This was well in accord with the historical traditions of Russia, the land of autocracy and despotism. Lenin created all of the fundamental policies that Stalin later became better known for and carried out to grotesque extremes. Thus, the philosophy that the Russian Revolution can be justly described in its later version is “Leninism-Stalinism”. It was not Marxist in any sense Karl would have recognized and he would have been horrified at it. This perverted philosophy has been tried many times throughout the 20th Century with grim and often horrifying results. Leninism-Stalinism has been once and for all placed on the trash heap of history but it is still followed in many different forms by the vast majority of the Far Left and thus they are utterly irrelevant. The “moderate” Left has overwhelmingly sold out to NeoLiberal Globalism and are hard at work betraying the people. I think therefor, it is time to retire the word “Socialism” for any genuinely relevant movement. Besides, the upper classes and most right wingers in this country call anything that in any way helps the great majority of the people”Socialism” and it was in this sense that Bernie unfortunately used it.
I think that the best model we can use in this country is the American Revolution, one of the very few that did not lead to tyranny. I think we should study all the fathers of the revolution including Thomas Paine and try to recapture some of their vision and find ways to apply it to our time.
Ever notice how much larger the signature of John Hancock is on the Declaration of Independence? He didn’t do that out of simple egoism. The Declaration of Independence sat before the Continental Congress for a month without anybody doing anything but talking about it. He signed it large with bold flourishes to shame the others into signing, knowing damn well that the British would determine a special reward for his insolence if the enterprise failed. Within a couple of days, everybody had signed it and it lay innocently before them, ready for the next packet ship to London, to be placed before King and Parliament. But by signing that document, every man had convicted himself of high treason against the British Empire, the greatest power on Earth, whose reach extended into every part of the globe, and which was well known for not being at all forgiving about such things.
When they said they pledged their wealth, their lives and their sacred honor, they were not kidding! These were men of high station and affluence, who lived comfortable and respected lives. I find it amazing that these men found the courage to risk it all by signing that thing! The United States of America must have seemed like one hell of a long shot, with a traitor’s noose the sure reward for failure.
Ladies and gentlemen, we here may someday find ourselves in a similar position. I wonder what we would choose to do?
“Remember the French Revolution”
And look at the mess they are in now they achieved nothing positive, long term.
The scum who operated the guillotines and the revolutionary courts.
Are the forefathers of the people who own and run france today.
Full circle, just genetically poorer than they were. In 1750.
Proof irrefutable that Republican revolutionary, democracy, does not work.
I beg to differ! The French enormously invigorated their culture by exterminating their parasitic and malevolent aristocracy and crushing the power of a greedy and exploitative church. The French nation became world cultural leaders in the 19th Century precisely because of what they did in the revolution. Otherwise they would have ended up as wretched as Mexico which never got rid of its upper class revolution after revolution. The natural result is that the upper class always corrupted the new revolution and ended up taking over everything again within a couple of generations.
As for how things are now, i think they are rather better off than we are.
I might that the French Revolution was a capitalist revolution. Those men who relied on reason and science wanted to industrialise and modernise France and they couldn’t do it while they were stuck in a semifeudal France under the oppresive rule of a powerful church. The French Revolution made France safe for Capitalism and the Industrial Revolution.
The one major problem no one is talking about here is the late stage maturation of capitalism.
Whether in the US, Europe, or Asia, capitalism is failing the majorities. The elites are hoarding capital, taxes are being pilfered through privatization, and elitist authoritarian leadership is manipulating fearful and angry citizens to scapegoat fake bogeymen to get into power.
We will either go further into a corporate totalitarian police state or we redistribute the wealth in a more equitable manner.
It will be one or the other. Bet on it.
I have mentioned that quite a few times. Marx predicted that world socialism would happen after Capitalism became overripe and rotten and threatened to destroy what it had achieved. We are in that time right now.