As I mentioned yesterday, I'm worried about the mighty consumer. I read that the consumer is powering growth, up to 70% of it of the economy in the U.S. Businesses, I guess, are turning out some consumer goods and creating jobs but are they hoarding their tax savings (as opposed to giving the employee/consumers some of it) or buying back stock (making their stock more valuable, natch, and good for investors in that stock). This seems like one of those things that work for a while and then don't.
When I get a Lyft ride for a short distance to a Christmas party (like we did last night and will tomorrow night), I worry about the driver. They show up in their late model car. Lyft charges me six or seven dollars. They have to drive around, burning gas, putting wear and tear on their (insured, registered, paid for?) vehicle. I give them a $5 tip, thinking this can never work as a business model. Do they have health insurance? They are probably counted as employed. But are they really?
A lot of what these consumers are consuming apparently is cheap clothing. Made by (let's admit it, if not slave at least not union) labor overseas. Shipped to us in big polluting cargo ships. Worn and discarded quickly, apparently, filling landfills. I understand that the manufacture of clothing causes lots of pollution. Some of this clothing is bleached, scrubbed, ripped, sliced, etc. as a designer 'touch.'
We order some of these cheap clothes (and a zillion other things) from Amazon. (In our house, we order coffee beans, oat bran, an occasional book, and a few other things. Rarely clothes.) Workers toil (and I don't use the word lightly) long days at not so great wages to get that stuff to us.
Are the rideshare drivers and Amazon pickers the consumers powering the economy? Or is it the folks who feel flush because their retirement accounts are full of the stocks of companies who bought back stock with their tax-saving windfall? Do the rideshare drivers and Amazon pickers have retirement accounts?
And saving? Is anyone saving? I read that some people are rolling underwater car loans into new loans resulting in things like a $47,000 loan on a car worth $27,000. Apparently, German people are still saving resulting in negative interest rates and, of course, not boosting their economy with those Euros? Saving is good for the individual but bad for the growth of the economy.
The cheap clothing thing is especially interesting (and worrying) to me. More on that tomorrow. Maybe.