Media drivel addendum

Retail sales shot up 7.1% in October. Yeah, American consumers are definitely cowering in their basements, all right.
A closer examination shows even more evidence that we’re not the Nation Paralyzed By Fear that the journalists would have us believe. Sales of automobiles and parts skyrocketed by 26.4% in October. That’s the biggest October increase since 1968. And sales of building materials rose 2.8%. A general increase in spending could perhaps be explained away as a fatalistic “eat, drink, and be merry, for tomorrow we die” reaction to terrorism and war. But if people are investing in new cars and home improvements, that means they expect to be around to enjoy them. These sales figures depict a nation that is optimistic about the future.
The article tries to dismiss the increase in auto sales as a response to interest-free financing, and claims that “people told consumer surveys they were miserable, but they were willing to borrow money to pursue a bargain.” But I just don’t believe it. Consumers aren’t that easily manipulated. For evidence of this, look at Japan, where the economy has been stagnant for years and shows no sign of recovering. The Japanese central bank has reduced interest rates all the way to zero, but consumers still refuse to borrow or spend money. They don’t believe things are going to get better any time soon, and prefer to save as much money as possible. This is not happening in America.

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