Deeply embedded in the core of the American economy are automobile economics and automobile culture.
Showroom visits by potential buyers are down 50% this month as compared to last year, and sales of new automobiles by General Motors, Ford, Toyota, and other dealers are down by 33% on average when compared to last year.
On some levels, this could have positive effects. America needs to figure out a way to secure happiness and a high quality of life without manic consumption — but these consumption drops are probably going to reverberate throughout the economy.
And this has almost nothing to do with the bailout proposal that will be voted on in the U.S. Senate tonight. I do acknowledge that many regular consumers can’t secure loans to buy new vehicles in this climate — but there is something more substantial at play here.
This is about consumer confidence — the absence of it.
We have moved from a turbo-charged, just in time money economy where Americans used to feel that they could secure just in time cash and just in time jobs — where they trusted the system — to a high fear economy where folks change behavior. Watch for savings rates to start to shoot up.
People will begin saving like crazy because they think their future is full of risk.
— Steve Clemons