Blog: Drop 'til you shop

Drop 'til you shop

On 10/03/2010, by Andrew Clare. Keywords: Global recovery

You can berate Americans for many things.

For inventing sports that no one else wants to play, and then for claiming that they are the world champions of these sports.

For inventing cars that have all the handling and performance capabilities of a leaky rowing boat. For the widespread and indiscriminate abuse of the English language, for example, their use of the word "invite" when they really mean "invitation", to say nothing of their spelling.

But until very recently one could never accuse Americans of being thrifty. We all know that Americans love to shop. They just love to spend money – both their own and other people's. They love it so much that one could argue that shopping, not baseball, is their real national sport, and that the malls that sprawl across that great county are their cathedrals.

To read the full article – published by Financial Adviser – please click here.

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Liad Meidar
Mar 12 2010

A hallmark of the US economy has been the flexibility and mobility of its labor force. When jobs dry up on one state, workers retrain and move to places where their new skills can be used.

What is different this time is that the current crisis was started by a housing bust. Currently some 25% of homeowners are “under water” – the value of their homes are less than the value of their mortgages. So while American workers remain flexible, their mobility is severely hampered.

The housing crisis that started the Great Recession still weighs on growth in the US. Not until this is sorted out will Americans go back to being World Champion shoppers.

In the meantime, they can focus on winning at other people’s national sport – such as Group C of the World Cup.