David Altig over at Macroblog is confused:
I was struck by this headline which led a Tuesday post in Economix, the economics blog of the New York Times—"Consumer Spending Declines: A Historical Oddity."
Sometimes these sorts of teasers are not great indicators of a more nuanced analysis that follows, but in this case the headline synopsis pretty well captured the plot.
"That the American consumer is cutting back spending is blindingly obvious these days, but it is still hard to overemphasize this central feature of the current recession. Americans borrowed like crazy for years against their home values, which have now fallen and are dragging consumption down with them.
"The sustained decline in consumer spending is also—as the European Central Bank points out in a tight piece of work synthesizing features of past recessions—a historical oddity of the first order."
That analysis is not, I think, quite so tight.
here's why
there is nothing like a typical recession pattern when it comes to consumer spending. The second obvious feature is that the fall in household consumption in the current downturn looks entirely unremarkable when stacked up against past episodes.
For those of you still reading, it would be fair of you to remind me that the current recession is not over, so the record is yet incomplete. Though personal consumption expenditures actually increased in January and February, the most recent retail sales report might warrant caution. In fact, Economix has followed up with a cross-recession comparison of retail sales that definitely puts the current recession in a relatively bad light. That's fine, though I would note that retail sales are only a piece of overall personal consumption expenditures, a piece that does not really capture the increasing share of spending on services that has occurred over the postwar period.
But even if the turnaround in overall consumer spending proves durable, it is not entirely clear that there is much solace to be taken from such a development. If you are inclined to look to the darker side of things, the fact is that a turnaround in consumption generally comes well before a recession ends. In the long and relatively severe recessions of 1973–75 and 1981–82, consumer spending bottomed out a full year before the economy turned around in general. (The bottom was eight months before the end of the recession in the 1969–70 and 2001 recessions and two months before the end in the 1960–61, 1980, and 1990–91 recessions.)
For lots of reasons, then, I wouldn't want to overweight good (or even benign) news from the consumer spending front. But historical oddity? I don't believe so—yet.
Just a side note... completely off topic
I was struck by two statements...
Sometimes these sorts of teasers are not great indicators of a more nuanced analysis that follows...
and
For those of you still reading....
Bloging tends to feed into shallow analysis and reading. Thats not to say that many of the link-a-thon bloggers (I'd include myself) who do a lot of pulling from other sites can take items out of context, or often times take a quote from a post quoting another posts quote... you catch my drift.
By the end of it you get a "position" that might not be held by anyone.
It made me think about Walter Kaufmann discussing Positivism in his Critique of Philosophy and Religion (p. 20-21):
Contemporary positivism has split into two movements of revolt: one relies heavily on symbolic logic, the other on "ordinary language." What both have in common with Comte is a deeply unhistorical, even antihistorical outlook. Empathy and that virtuosity of understanding past positions which was cultivated by romantics and Hegelians are not the forte of Carnap and Reichenbach or of the ordinary language philosophers any more than of Comte. On the contrary, theirs is a decided lack of respect for the past. Where they concern themselves with previous thinkers it is generally not to learn but criticize.
I think that for those who struggle to both deal with and address others concepts, who struggle with the ideas, question others and themselves, and challenge themselves with other view points blogs can be useful. For those who just want to further link themselves into a nice neat womb of fellow "last man" blogs and the web at large feed into these short comings.
I'd like to think I try to lean towards the former more often than towards the latter. But we all have our good and bad days I guess.
Anyways I just loved his acknowledgment that some folks wouldn't read past a certain point--as if they are off to another more interesting/useful/entertaining post (entertaining may be the key word here). But even his acknowledgment of "teasers" as a natural part of blogging.
I've leave you with Nietzsche (p 175 appendex of On the Genealogy of Morals) on the subject:
The worst readers.--The worst readers are those who proceed like plundering soldiers: they pick up a few things they can use, soil and confuse the rest, and blaspheme the whole.
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