Carranza, there are only 2% more people unemployed than three years ago. That's not a very big deal. Half of them would have been in debt and not spending due to wealth effect. Most people live hand to mouth and don't have investments to worry about [they have company pension plans but don't pay that much attention to them]. Their spending patterns won't have changed much because they had little wealth effect to spend, though the halo effect of full employment and surrounding wealth and confidence might have made them more profligate and run up more debt than normal. So I don't think there is a big problem with 2% more people unemployed.
Spending patterns have shifted quite a bit. I'd love to see sales figures for Dom Perignon and first class fares to overseas vacation spots. I bet they are way down. Maybe unit sales are similar but prices might be down a lot to maintain sales.
My spending patterns have changed quite a bit. Well, my intentions rather than my actual spending. I dare say a lot of other premium spending has been canceled by most people. The WalMart sales bear that out.
With little change in employment, I can see that total sales figures won't drop much at all. Fuel costs are down so spending will swing to other things. That'll help hold down wholesale prices too.
People are being redeployed from useless things [such as building McMansions and frivolous things which many rich people do who don't know what else to do with themselves when suffering Sudden Wealth Syndrome]. They are being re-employed on useful things, such as Tomahawk missile production, CDMA phone production and code writing, True BREW, car repairs instead of scrapping them because they have a full ashtray. Instead of sitting around retired, they are re-employed at reasonable pay rates on developing code for applications which otherwise wouldn't be done. They are redeployed from failed enterprises such as dot.gone to those which have customers and profits.
It's good to have irrational exuberance over and done with, though it was a lot of fun celebrating Y2K like that. What a couple of years they were, the last of the 20th century and the first of the 21st. Phew! Now for some peace and quiet and back to the factory.
On the worry about a grand finale Osama attack, if it's a real nuke, that would definitely be bad news [if it went off in downtown LA or somewhere like that]. But that risk seems to be unlikely [although some claims are made that they have a live one]. The smart money seems to be on a normal bang with radioactive contamination. That wouldn't be good news, but it wouldn't be much of a problem really.
People would quickly go upwind or out of the airstream. They'd get firehoses out and wash everything down. Life would be back to normal in a week or so in the hot-zone. Radioactive contamination is not all that bad [in the quantities Osama could bring to bear]. Chernobyl involved a whole dirty great reactor burning for days. A little diesel/fertilizer bang with a few kilograms of uranium would make the Geiger counters click, but it would be no big deal economically. The media would love it!!
Hmmm, I wonder who sent the anthrax? It certainly made news. Maybe it was rival news media who sent the stuff to competitors. They get revenge and a lot more newspapers sold. I often wonder, when I read of another virus being on the loose in cyberspace, whether the virus-hunting software merchants don't have a bit too much interest in plenty of viruses staying in circulation. Some unpleasant characters responsible for sales figures to keep their jobs might find it expedient to encourage the odd virus to rampage around the world. I sometimes wonder if the war on drugs depends on continued sales and it would NOT be a good idea from the drug-hunters' point of view if drug consumption became the decision of the person consuming it. The jails would empty out if drugs were legalized. I think consumption would drop too as they became less 'cool', unfashionable and thought of as for losers. People would decide that poisoning one's brain is not the smartest thing to do if it doesn't give street cred. Heck, even George W gave up the booze when he realized it wasn't getting him anywhere he liked. His daughter was trying it out, even though it's illegal for her to do so. Jailing people who supply children would be a good idea. Jailing adult dopeheads is not. But don't ask the drug law enforcers what they think about legalizing self-administration of brain poisons.
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