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Black Friday Comin’ Soon; Debt Remains ‘Til June…

24 Nov
Black Friday Comin’ Soon; Debt Remains ‘Til June…

“Black Friday,” the day after Thanksgiving, represents the entire house of cards upon which the U.S. economy is based. Starting in the middle of the night, people line up to spend money they don’t have on items they don’t need. During one of the worst economic periods in history, wouldn’t it make more sense for people to be frugal, maybe even exchange homemade gifts or just enjoy each other’s company on the holidays?

No, experts say that would cosign the U.S. economy to barrel-wearing oblivion.

Some analysts stress, however, that futile as it may seem to push struggling Americans into spending billions on products they could do without, the economy is too fragile to encourage anything less.

Adam Davidson, of National Public Radio’s Planet Money, describes Black Friday as a “one-day economic stimulus plan and job-creation programme” that is crucial to the American economy.

“Billions of dollars, which would otherwise never be spent, make their way into circulation,” he wrote in an article.

Although Scrooge gave Bob Cratchit the full day off for Christmas, retailers can’t be so liberal when attempting to make the most of this capitalist extravaganza.

When Anthony Hardwick, a part-time car-park attendant at a Target in Omaha, Nebraska, was told to report for work at 11pm on the evening of Thanksgiving – the most important public holiday by far for Americans – he refused.

“My fiancée is sad because I was supposed to have Thanksgiving dinner with her family and talk about wedding plans,” Mr Hardwick, 29, who was due to work a shift in his second job on Black Friday, said. “It’s kind of a raw deal.”

Supported by colleagues, he started a petition titled Tell Target to Save Thanksgiving.

“A full holiday with family is not just for the elite of this nation,” Mr Hardwick wrote. “All Americans should be able to break bread with loved ones and get a good night’s rest on Thanksgiving”

It attracted 200,000 signatures, which were delivered to company bosses.

A spokesman said workers were paid extra for filling Thanksgiving shifts and that “every effort to accommodate their requests” for time off was made by managers.

Does the “extra” workers were paid — most likely the standard time and a half — reflect the fortune the retailers stand to make? Not likely. This is part of what makes Black Friday a prime target for the Occupy Movement.

Occupy Black Friday is aiming to persuade people to shop locally to support their communities, rather than multinational conglomerates.

Another, Occupy Wal-Mart, is turning its focus on one huge outlet.

“Black Friday is the one day where the mega-corporations blatantly dictate our actions, they say ‘shop’ and we shop,” the group said in a statement.

“Hit the corporations that corrupt and control American politics where it hurts, and their profits.”

This is not a crazy idea. Shopping locally would ensure that more of the profits went to the people selling you the items rather than the executives who remained snug as a bug in their country home’s rug on Thanksgiving night, later dreaming of huge bonuses reflective of the sales blitz. Wal-Mart, especially, this year has reduced health care benefits for its employees despite still remaining incredibly profitable.

The question also remains as where people are getting the money to participate in the Black Friday frenzy. E.D. Kain at Forbes correctly points out that “we are in the red, and spending on top of unsustainable debt is neither wise nor a recipe for economic well-being.”

We can’t rely on some form of consumer-driven Keynesian stimulus in perpetuity. Spending is important, but not if it comes on the back of boatloads of consumer debt, even if that debt is the result of stagnant wages for the working and middle class.

Unfortunately, Kain falls into the trap of insisting that rampant, essentially needless consumerism is what the economy needs.

The last thing I would do in times such as these is attempt to convince people not to go out shopping. With unemployment teetering around 9% the worst possible thing we as consumers could do would be to stop spending money.

How can you stop spending what you don’t have? How many items purchased on Black Friday will be paid with a credit card? That’s great for the banks but not for the people who will wake up to Red Saturday, which will lead to Red Sunday, Red Monday and so on. As the old joke goes, “These sales are gonna save me into bankruptcy.”

The debt management website ReadyForZero.com says about one third of shoppers rack up credit card debt on Black Friday.

Finance charges on their credit cards can easily wipe out any discounts they received at Black Friday sales.

I also disagree with Kain’s theory about shopping locally.

If consumers spend 20% more purchasing an HDTV from a local retailer, they’ll have 20% less money to spend at local restaurants and coffee shops. Refusing to shop at chains simply because they’re chains may result in more money in the pockets of local retailers, but it may end up taking money out of other local businesses.

This strikes me as a scare tactic. I’d rather just not buy the HDTV. The only way that large chains will begin to treat their employees as is they are possibly something approximating human beings is for consumers to speak with their wallets. As the lopsided distribution of wages in corporations demonstrates (CEOs at Russian Czar level and average worker at Southern sharecropper), helping these companies make money helps only a small fraction of people.

The Tea Party is countering the Occupy protest with “BuyCott Black Friday.” So, a group upset with the tremendous U.S. national debt supports rampant overspending? I guess logic wilts in the face of spite. Shouldn’t these groups be in accord? Big business is — and has proven to be — as destructive as big government.

 
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Posted by on November 24, 2011 in Capitalism, Social Commentary

 

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