Consumer spending went up last month but paradoxically consumer confidence in the interim has plunged to lowest level since May. Consumer spending was up 0.5% in August, above expectations, reports the Commerce Department, while the Conference Board reports that consumer confidence has plunged to 86 for September.
What accounts for the paradox?
War, that’s all.
Previously consumer confidence posted the 92.4 for the previous month of August, a seven-year high.
“Paul Dales, senior U.S. economist at Capital Economics, said high equity values, rising home prices, and falling gasoline costs indicate that ‘confidence should be rising not falling,’" reports the Wall Street Journal.
Well what a difference a month makes.
Or better yet, what difference does a month make?
Relief from high gas prices is what has been primarily feeding the increase in consumer confidence and spending. Yet American consumers know instinctively what politicians seem to have forgotten: The wars raging in the Middle East and Ukraine are about energy; oil, in the case of the Middle East and natural gas in the case of Russia and Ukraine.
And while politicians may wish these wars to be the hopey-changey, feel good propositions that are something besides “war,” whatever you call it that is going on in Ukraine and on the banks of the Euphrates is bad for business.
Gas prices over the last month are down around 3 percent, which had previously boosted retail sales numbers. So the increase in consumer spending isn’t necessarily a big surprise, nor should one be surprised by the previous month’s increase in consumer confidence.
Americans like cheap, high-quality fossil fuels.
There is no warmer feeling than filling your tank right up the brim for less than you expected.
But, in the interregnum—and let’s face it: Obama’s government is all interregnum—ISIS and their merry band of headhunters has radically transformed the one region into a Jihadist Paradise, with the fall of Baghdad to radical Islamists within the realm of possibility.
U.S. airstrikes have reached the limit of their capabilities because frankly there just aren’t that many targets. Without better-trained and equipped troops facing them on the ground, ISIS has ground to a halt only for logistical reasons, not because of effective resistance.
Ultimately the region’s only value to the rest of the world is the huge reserves of oil found underneath the sand stretching from Africa to Persia.
In Europe the on-again and then off-again civil war instigated by Russia’s insistence on their “rightful place” in the world isn’t just Hitlerism. It threatens to spread into the rest of Europe because the West can see the Russians rightly as imperialists and a threat to peace.
“Despite the insistence of radical post-modernists that all truth claims are equally invalid,” writes Alexander Motyl, a Ukrainian-American political scientist at Rutgers, “reasonable people the world over know that there is a simple test of the veracity of some perception: does it actually correspond to things as they are?”
While Motyl was talking about the defects in Russian leadership, rather than those in the West, I will observe that leaders in Moscow, Washington, London, Paris and the rest of Europe—OK, I’ll mention Germany too, the last nation to invade other countries because it felt bad about itself—all suffer from a kind of group delusion that has made the world much less safe.
The American people, in short, have much less confidence now than they did even a month ago. That’s because they must see things as they really are rather than how they want them to be.
Unfortunately our leaders don’t share that handicap. They lack the capacity to recoil from anything other than defeat at the polls.
Your leaders would have you believe that we are not at war, that war is nothing more than a word on a bumper sticker. I live amongst men and women who have the ribbons on their chest to show that war is real.
The American people know it too. They value these people with war-related decorations who keep us free.
Obama and his friends are right about this one thing though: When you can’t even contemplate saying the word “war,” war becomes some entirely different eventually.
It becomes defeat. At the polls and on the battlefield.
Today it's a race to see which comes first.