Capitalists to Consumers: Spend, Spend, Spend

This week, there was a big announcement in the mainstream media: Things are looking up! The economy is getting back on track, thanks to us. Consumer spending was up in February, and Wall Street stocks rose on the strength of this news. One economist said it was “an encouraging sign of consumer revival.”

But before we all start celebrating, a reality check.

This sign of “recovery” is an increase in spending that, economists admitted, was not accompanied by any rise in wages, which are stagnant and have been for years. Plus, unemployment is up; the national rate is 9.7 percent and here in Michigan, it’s 14 percent. These are 26-year highs. So far, Corporate America has eliminated nearly 9 million jobs in the US, with most experts saying that only a fraction of them will ever be restored here.

The captains of industry clearly don’t feel that they need to hand out raises with such a huge pool of desperate employees to choose from. And let’s not forget that the few jobs that are “coming back” are in the low-paying service sector, often unaccompanied by any benefits or the chance of union membership.

Now, let’s push aside the Wall Street rejoicing, and see what Americans felt they just had to buy more of in Feruary. Not cars. Not appliances. Not bikes. Not furniture, rugs, or lamps. In fact, sales of durable goods actually fell in February.

That means that Americans were spending their money on what the economists call “nondurable goods.” And in February, that was primarily food and clothing.

That’s right: food and clothing, two of the three basic needs for survival. Your kid outgrows his shoes. Your winter coat finally falls apart. And you need to feed your family. Despite recent claims that food prices are deflating, there was so much price-gouging in food over the past two years that the prices are actually simply falling back to something like normal levels. That means people are able to buy a little more of it. To be exact, 0.3 percent more.

This is the big turnaround that Wall Street tycoons are touting. Why? Because news of any spending increases is good for the capitalist economy. Don’t fool yourself: economists are aware that this spending comes at a heavy cost to workers. Ken Mayland, the president of an economic analysis group in Ohio, noted that “step one in lifting consumer spending was the lowering of the personal saving rate. That’s pretty much played out now.”

In other words, we are right where corporate America wants us: with our backs to the wall. We need to eat. We need clothing. We’re unemployed or underemployed. And our savings have been successfully tapped out. So back we go to the stores with our credit cards in hand, because we have no other way to pay. After all, as we are constantly reminded, this recovery is all on our shoulders. Only we can spend our way out of it, even if we have no money to spend.

If that’s not an exposure of the absolute corruptness of the capitalist system, I don’t know what is.

Remember as you read about the so-called spending recovery in the news, there are simple ways to stop buying into the myth that consumer spending is going to fix things in this country. Want to do something about the cost and quality of your food? Grow a garden if you can and have the space to do it. Buy from local farmers rather than chain supermarkets. As for clothing, give the mall a pass. Shop at garage sales, flea markets, resale stores. Swap items and services with friends. And check out the Really, Really Free Markets, held once a month in Grand Rapids.

Don’t let the capitalists consume you in order to restore their corporations to health.