Shopping for Christmas, and for economic recovery

Can cash registers at the mall ring up more than gifts?

December 04, 2010|By Jean Marbella, The Baltimore Sun

My first foray into Christmas shopping this year couldn't have started on a more promising note. It wasn't at just any shopping center; I was at the Mall of America in suburban Minneapolis, only the Everest of its ilk, the largest collection in the country of stores and amusements.

It was a couple of days before Thanksgiving, so I didn't even have Black Friday-addled crowds to fight. As a sales clerk at Club Monaco told me, "It's the calm before the storm." The racks and shelves seemed freshly stocked rather than picked over. And there isn't a sales tax on clothing in Minnesota.

And yet, somehow, after hours of circling the four levels of the complex, each seemingly as vast as the one-time prairie on which it was built, I'd bought only one thing: A more comfortable pair of shoes at the DSW.

Maybe I was overwhelmed by the sheer volume — there seemed to be a Victoria's Secret on every floor — and unexpected offerings such as the Chapel of Love wedding chapel, in between Bloomingdale's and Lenscrafters. Or maybe I just couldn't get past the fact that every saleswoman sounded like Marge from "Fargo," or that "glamour photography" in Minnesota, at least as defined by one shop, seemed to involve the model posing with a Bret Favre jersey clutched to your otherwise naked chest.

But mostly, I think it's just that Christmas shopping even in the best of times can be a fraught affair. And these, of course, are not the best of times.

On top of the usual gift-buying issues — the whole am-I-what-I-give question, the what-if-you-spend-more-on-me quandary — the recession has added another layer of anxiety.

Should I spend any money at all given uncertainty about the future? Would I be boosting the economy by spending or just adding to consumer debt, not to mention already overflowing landfills? Will my purchases lead to more people getting hired to make and sell this stuff? Or will all that job growth happen in China?

That's a lot to haul around in a shopping cart. No wonder I didn't have any room in mine for actual presents.

Back home, I called Jeff Werling, a University of Maryland, College Park economist, for help in sorting this out. He's the executive director of Inforum, short for Interindustry Forecasting Project, which develops models to analyze economic trends.

Werling says the downturn has indeed wreaked havoc with how we shop and buy (in much more scientific terms).

"At the end of the day, people make decisions based on what their net worth is," he said. "You look at your assets and liabilities. One thing the financial crisis did, it really struck down real estate assets, what your house is worth, and your financial assets, if you have a 401(k) or investments. So net worth is way down.

"And then you get in a vicious cycle," he said. People spend less, reducing demand, leading companies to lay off workers, leaving even more people with fewer dollars to spend — and on and on.

It would seem as if you should be able to reverse that cycle by shopping more. But alas, Werling says, it's not that simple. Even though consumer spending comprises about 65 percent of the economy, not all those dollars get spent at stores. Much of it goes toward housing, food and other necessities.

Even if this turns out to be a good Christmas shopping season — and early indications are that it will indeed be an improvement over the previous couple of years — we can't just spend our way out of the economic downturn, according to Werling.

Other issues, such as the foreclosure crisis and uncertainty about issues such as taxes or when companies are going to start hiring in greater numbers, have to be resolved before the economy can pull itself out of the dumps.

Of course, Werling said, a good holiday shopping season is better than a bad one, giving at least one sector of the economy some momentum.

"Things are going to look better than last year," he said. "Anything is better than last year."

Back at the mall, once my feet felt happy in their new shoes, I did manage my small bit stimulating the economy by picking up a couple of gifts — a minor stride, to be sure, on both my shopping list and the country's economy.

But the line Bono sang as I waited for a cashier at my final store remained a propos: "I still haven't found what I'm looking for."

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