Jump the SharkDecember 21, 2009 Posted by: Joe Morgan
Sunday, Monday, Happy Days
Tuesday, Wednesday, Happy Days
Thursday, Friday, Happy Days
The weekend comes
My cycle hums
Ready to race to you
- Charles Fox and Norman Gimble (writers)
The phrase "jump the shark" refers to the 1977 episode of "Happy Days" where Fonzi jumps a shark on water-skis — leather jacket intact — thereby marking the peak of entertainment for the series and leading to a consistent decline thereafter.
Applying this colloquialism to today's economy, it could be that consumers are finally ready to "jump the shark" regarding their fears of the economy and begin to ramp up spending once again.
Over the last two years of being pounded with terms like "economic crisis," "Great Depression," and "falling dollar," consumers have decreased their consumption some $800 million off pace. Foregoing such necessities as iPhones and HDTVs, we've had to live in the depths of this personal sacrifice for far too long. At the same time, credit providers have pulled the rug from under us, cutting back available credit by nearly $100 billion in the credit card arena alone.
But much of the consumption that we've avoided would not have been financed through credit as evidenced by the growing savings rate. After averaging 1.8 percent from 2005-2007, savings have boomed to an average of 3.5 percent over the last 22 months. Combine these two factors with the entrée of the current holiday season and we may just see a consumer breakout to the upside.
I can just picture frustrated, but gainfully employed, shoppers storming Macy's and Best Buy cash in one hand and a picture of their favorite relative in the other. (Yes, we all have our favorites when it comes to buying gifts, don't we?) Like the famous line from the 1976 movie "Network," they are "mad as hell and they're not going to take it anymore!"
Spending is in our culture. It's part of our DNA. Ask the typical person on the street why they work and you'll get a litany of responses all having to do with consumption. Ask them why they work hard and the answers are even more compelling.
While spending growth...Read More