I was thinking about Doug's question about US consumer spending and so
decided to look at recent data. I constructed a simple graph of the
ratio of personal consumption expenditure to personal disposable income
(along with the 6th order polynomial trend line). (it's attached.) It's
interesting to find that this ratio fell from 1959 to 1980 or so,
roughly from 91% to 87%. It then rose dramatically (to my eye), to above
94% in the first three quarters of 2003.
some observations.
1. given the trend since 1980, it's unlikely that consumer spending will
suddenly snap back to "normal" saving. But it might do so for other
reasons, i.e., excessive debt compared to income and assets, threatening
personal bankruptcies. (Since much of the credit comes (indirectly) from
the outside the US, the falling dollar also sticks a spanner in these
works.)
2. I think it was Mike Davis who wrote about US "overconsumption" during
the 1980s. This trend has continued. It's based on credit creation and
on exaggerated asset prices (first the stock market, then housing). (Of
course, at the bottom of the income distribution, increasing
indebtedness has no connection to asset values; instead, it's a matter
of desperation.)
3. I can see why so many pundits emphasize Ronald Reagan's "optimism."
The whole consumption boom has been based on optimism, the willingness
to get into debt and to value assets too much.
4. Neoliberalism is legitimated in the midst of the "aggressor homeland"
because we in the US can consume like crazy even though a lot of
neoliberal austerity has been instigated. We can delay personal problems
to the future.
------------------------
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
Title: Pers. Consumption Expenditure/Disposable Income
Pers. Consumption Expenditure/Disposable Income
![Chart2]()
