We have an apology to make: We were wrong.
These words don't come easily to us, but the season has got us thinking about Charles Dickens' A Christmas Carol and the cleansing act of repentance. We feel impelled to acknowledge our errors in the hopes that, like Mr. Scrooge being reborn, we might change our own ways.
Sorry if you're confused. But walk back with us, if you will, to meet the Ghost of Economy Past. Can you recall the autumn of 2008? It may seem, from this vantage point of Dow 10,000/TSX 11,000, a strange and unfamiliar place. The thing is, we said some things back then that, at the time, seemed very reasonable. Across the economic landscape had come portents of doom, and so across the media landscape we and our colleagues made predictions of radical change. In BusinessWeek and Time and Maclean's and research papers from economists, there was word of a new frugality taking hold.
We admit, we got excited. We envisioned the environmental benefits of spending less and saving more, and we recalled the moral benefits that had long ago prompted our patron saint Adam Smith to speak of frugality as a virtue. On a tour to promote a book about debt, Margaret Atwood spoke approvingly of the way her mother had saved rubber bands until the end of her life. One Globe columnist wrote: “The newest fashion accessory is a hair shirt.”
Another suggested that “being frugal could be the new chic.”
Perhaps that was the problem.
Chic things are, by their nature, trendy, ephemeral. But the new frugality wasn't supposed to be a trend, it was supposed to be a hit from the cardiac crash cart that would reset our economic heart at a slower, sustainable pace.
It was supposed to be a wholesale movement, a once-in-a-generation adjustment of the Western world's way of life, of our values, of our culture.
Even as recently as September of this year, a dispatch from Washington in these pages suggested the United States “may be witnessing a new age of frugality, not unlike what occurred after the Depression of the 1930s.”
And yet here we are, confronting the fact that North American consumers are beginning to, well, to consume again.
Yesterday, the U.S. Commerce Department reported a 1.2-per-cent bump in November of non-automobile retail sales, triple the rate economists had predicted. (Economists' predictions, it seems, are as dependable as ours.) Here in Canada, retail sales were up 1 per cent in September, the last month for which we have statistics.
But both numbers are still down from the year before. The U.S. National Retail Federation issued a press release yesterday that sounded like a Talmudic scholar, or maybe a Catskills comic, full of on-the-one-hand-on-the-other-hand philosophizing: electronics and appliance store sales were up 2.8 per cent in November over October, but down 2.9 per cent from November, 2008. Book, hobby, music and sporting goods stores had a month-to-month increase of 0.3 per cent, but a year-to-year decrease of 1.3 per cent.
In some quarters, money is flowing again like water at Lourdes.
Harry Rosen told us that $5,000 Tom Ford suits and $700 dress shirts are “a runaway success.”
Then again, we're not sure your typical Harry Rosen customer was ever what our Jesuit teachers might have called frugal.
If we sound like we're equivocating, well, so do the mandarins. On Wednesday, Bank of Canada governor Mark Carney urged consumers to take over from the government stimulus, noting they're typically responsible for about 70 per cent of spending.
But then on Thursday, Mr. Carney warned people not to get in over their heads with cheap loans they can't service if interest rates go back to their historic averages.
