Wednesday, January 7, 2009

Take your medicine like a good boy

Something occurs to me. Those who feel good about the economy's prognosis for the next year are constantly saying that "everyone" is bearish, making it the bottom for the market and a buying opportunity. Those who believe the sky is falling (yours truly included) hear nothing but talking heads opining about how this is the buying opportunity of their career. (If you want to know what I think about that comment, read this.)

There are folks who are certain that Bernanke has studied the Great Depression enough to know how to avoid it again. But knowing how to avoid the problems of the 1930's doesn't necessarily mean he knows how to avoid all the problems we're facing now. The consumer is on strike, and not by choice. And while I could be wrong, so far I haven't seen or heard anything that my buddy Ben can do to help the consumers feel flush and start buying again. Frankly, I don't think that would be the right answer anyway. We're lancing a boil on the butt of consumerism, folks. It's a painful procedure, but it's the only way for the economy to heal. The recuperation period needs to include recovery from the excessive spending of the recent past as well as resetting what the economy expects from the consumer. We're nowhere near done with that process yet.

Just call me Nurse Ratched.

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