Shopped Out?



I participated in a discussion in today’s WSJ’s (the free Econoblog) on consumer spending, titled Shopped Out?  My cohort in this was Dartmouth College Professor Andrew A. Samwick, author of Vox Baby. Andrew served as the chief economist
on the staff of the President’s Council of Economic Advisers in 2003 and 2004.

Its an explanation of why the consumer is almost — but not quite — tapped out, and the repurcussions of that.

Here’s the intro:

For at least the past decade, anyone who has bet against the resiliency and
unending spending capacity of the U.S. consumer has decidedly lost the wager.
Even through the recession of 2000-01, they hardly slowed their profligate ways.
Sept. 11 managed to create a pause in spending — at least for a short time –
but it was more than made up for in the ensuing quarters. Indeed, the careers of
economists who have declared the U.S. consumer to be tapped out litter the
countryside like corpses after a war.

There are early signs, however, that taking the other side of this bet is no
longer a sure thing. We see a variety of factors suggesting that the consumer,
while not yet exhausted, is slowly but surely moving in that direction. While
it’s premature to declare the American consumer "shopped out," I suspect it’s
now quite late in the cycle. Barring a significant improvement in economic
fortunes, including robust job creation and increased personal income levels,
that exhaustion now looks inevitable.

It was a lot of fun doing this with someone the stature of Professor Samwick. I definitely learned a few things . . .

UPDATE September 6, 2005 6:30 am
To answer a recurrent comment and email about this:  It was written Sunday and Monday, before Katrina made landflall, the levees broke and the magnitude of the disaster was known or understood. The impact of the storm (see this) only exascerbates a deteriorating situation.


Shopped Out?
Barry Ritholtz, Andrew A. Samwick
WSJ’s ECONOBLOG  August 31, 2005

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Katrina/New Orleans Disaster Relief Aid

It appears the damage to New Orleans region is far worse than originally expected. As we did with the Tsunami, here are numerous resources that you may find helpful in keeping informed about the damage, and making donations to help survivors:

1) Relief Organizations

Known as the most efficient relief charity in the U.S. (and Non-denominational also)
88 Hamilton Avenue, Stamford, CT USA 06902
Toll Free: 1-800-486-HELP (4357) Phone: 01-203-658-9500

American Red Cross
(You can also donate via or the iTunes Music Store)

Salvation Army

see below for complete list of charities

2) News Coverage

Yahoo! FULL COVERAGE: Hurricanes & Tropical Storms

Google Groups katrina relief aid

The KatrinaHelp Wiki relief page

3) Weather Related Resources

National Hurricane Center

Actual Water Level Measurements, at New Orleans, LA
USGS 073802338 IWW @ I-510 Bridge (Paris Rd)

See this Google Map for location:,+New+Orleans,+LA+70129

National Weather Service graphicsversion/bigmain.html

Hydrologic Information Center (river flooding) /index.html

4) Government Resources

Federal Emergency Management Agency

City of New Orleans

Louisiana Governor’s Office

Mississippi Emergency Management

Louisiana Homeland Security

5) State Government Resources

Louisiana Emergency Road Closures

Mississippi Emergency Road Closures

Alabama Emergency Road Closures

Florida Emergency Road Closures

New Orleans Convention and Visitors Bureau Update

Read More

Category: Weblogs

Dow Jones Chart (1900-2004)

There is a terrific Dow Jones Chart (1900-2004) for sale at the gallery. Its along the same concept of a chart we did back in 2003 — only this one includes P/E ratios, which is a very instructive addition to the graph: click for an enormous chart: “Officially licensed and designed by Minyanville’s own…Read More

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