--Looking behind the headline, at the data, this struck me:
Retail sales, Gasoline stations
January 2008: $41,894,000,000
January 2009: $27,016,000,000
That's quite a fall in gasoline purchases -- a drop of 36 percent in one year, three times as intense as the drop in retail sales overall. One of the important questions facing America's consumer economy is whether the auto industry (and everything that goes along with it) is facing a historic downturn. If so, this would mean a lot of things. One thing it would mean is that America's consumer economy would face a huge hole.
What would, or will, fill it? What are we going to produce and consume?
--As I see it, crucial, structural questions like what to produce and consume are now open to new knowledge, and subject to drastic change, rather than elite control. To me, the lack of elite control separates the current contraction from the others of the past thirty years. Events are forcing change upon powerful actors, often against their interests. The rich and powerful are right now 'de-leveraging.' The collapse of the debt economy we've had the past eight years is the collapse of a highly unequal distribution of wealth and power.
--Much of what is to come will be against the will of the people we have grown accustomed to thinking of as a 'power elite.' The imposition of President Obama upon the power elite, with little accompanying fuss, is just the beginning.
--Events suggest the American elite does not enjoy unilateral power relations with the rest of the world, either. Problems are happening to us, not because of us. We lack total control. The chaos with our banks is the most recent example. Iraq, Afghanistan, Pakistan, and Iran are also examples. As is the extent we depend on foreign purchases of our debt to finance our entire operation.
--Historically speaking, the most important asset on the US balance sheet is the American consumer, or at least it has been. A top priority of economic policy should be to re-institute the unquestionable status of the American consumer. Pump purchasing power into the middle-class through massive investments in education, health, energy, the environment, and other areas that we've under-financed the past few decades. The quickest way for the American power elite to stabilize their position is to quit spending money on war and themselves and invest in middle-class institutions -- jobs, families, universities, food, and energy.