David Leonard has another involving feature in BusinessWeek, this time on "the new normal" of broke people buying stuff that by rational examination should be luxury items, like iPods.
So who are all those people at the mall? It's easy to forget that a 9.5 percent unemployment rate means that roughly 9 out of 10 Americans in the workforce are still employed. "Some consumers are probably liquidity-constrained," says Kenneth Rogoff, Harvard University professor and former chief economist at the International Monetary Fund. These are "the ones who are probably not the ones buying iPads. But 90 percent of Americans do have a job, and maybe 70 percent are confident about them. And maybe half of those have liquidity."
Yep, when you're out of work, remembering that 90% of us still have jobs is tough. Leonard finds a host of examples of consumers spending on one-off luxury items while putting off core purchases like a new car or trading down to a dollar store from Target.
Amusingly, Josh Brown, who blogs as the Reformed Broker, wants to point out that he did this story earlier, and his post on being the inspiration for the BusinessWeek story is worth reading as well.
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