Santa, Please Let This Be the Last Christmas in America That 'Saves' the U.S. Economy

by CHARLES HUGH SMITH December 21, 2012

My Christmas wish to Santa: please let this be the last Christmas in America that is dominated by the propaganda that holiday retail sales have any more impact on the $15.8 trillion U.S. economy than a moldy, half-eaten fruitcake left over from 2009.

Fact: the 2012 GDP of the U.S. is about $15.8 trillion. (BEA estimate) Gross Domestic Product, 3rd quarter 2012.

Fact: total holiday retail sales are expected to reach $586 billion this year. Holiday sales--National Retail Federation.

That means holiday retail sales are a mere 3.7% of the U.S. GDP.

Despite the Financial and Mainstream Media's pathological obsession with holiday retail sales numbers as proxies for the "health" of the entire U.S. economy, holiday sales don't really change much:

2007: (pre-recession) Holiday sales: $516 billion
Holiday sales as percentage of annual retail sales: 19.5%

2008: Holiday sales: $495.5 billion
Holiday sales as percentage of annual retail sales: 18.6%

2009: Holiday sales: $504.8 billion
Holiday sales as percentage of annual retail sales: 19.4%

So the start of the 2008-09 recession saw a drop of $21 billion in holiday sales: statistical noise in a $14.7 trillion economy (2009 GDP).

Now the propaganda machine is cranking up to announce that a 4% increase in holiday retail sales means the U.S. economy is off and running. Santa, please, please, please order your reindeer to stomp the life out of the idiotic fantasy that Americans buying a few billion dollars more needless junk from China is any sort of evidence that the U.S. economy is "growing at a healthy clip."

According the the BLS inflation calculator, $512 billion in 2007 is equivalent to $572 billion in 2012. Adjusted for inflation, the highly touted $586 billion in holiday sales expected in 2012 is within statistical-noise range of 2007 sales.

So sales returning to where they were five years ago is "strong growth"?

The entire retail sector is 7.9% of the GDP compared to a 21.4% share for the FIRE tranch (finance, insurance and real estate) of the economy.

Does anyone seriously believe that 3.7% of the economy can possibly leverage up the entire GDP with a razor-thin increase of a few billion dollars in holiday sales?

Santa, you have my deep gratitude if you could jam the propaganda machine so that this is the last Christmas in America where trivial retail sales are hyped as the savior of the $15.8 trillion U.S. economy.

Charles Hugh Smith is a novelist and economic commentator who writes for Business Insider and blogs at Of Two Minds.


blog comments powered by Disqus

Young progressives dance to reduce gun violence [video]

April 20, 2014  12:00 PM

#fight4the33

10 tweets celebrating 'Spring Bunny' Day or something

April 20, 2014  10:30 AM

Happy Spring Egg Day!

Piers Morgan: When is someone going to do something about child gun accidents?

April 20, 2014  09:20 AM

Some risks matter more than others.

Donald Trump wants 'human garbage' Edward Snowden brought back for trial

April 19, 2014  10:49 PM

Russian President Vladimir Putin seems a little preoccupied these days, but maybe President Obama can bring it up during one of their phone calls. @realDonaldTrump yes, let's March into Russia and snag him. No world superpower would care!— Matthew Dávila (@SodaPop6548) April 18, 2014 @realDonaldTrump @wikileaks well… I don´t think they´re gonna release him just […]

'People really need this much hand-holding?': Government reminds citizens to pay their premiums

April 19, 2014  06:52 PM

Now that Obamacare’s open enrollment period has passed, there’s just one other tiny detail nagging at those millions of new sign-ups — paying their premiums. The administration’s being awfully quiet about how many enrollees have actually paid their first premium, but they have sent out a subtle reminder via Twitter that Obamacare isn’t free after all. If […]

FSM Archives

More in PUBLICATIONS ( 1 OF 25 ARTICLES )