Every Christmas, a strange disconnection develops across the media. In a bizarre failure to see the bigger picture, the Business sections decry the reluctance of consumers to spend, while the consumer pages lament the cost of Christmas. I first noticed it in 2008, and it’s no different today. Here are some of this year’s stories:
- ‘A third of people go into debt for Christmas‘ says the Independent, but ‘Retail fears persist despite boom.’
- The Guardian says ‘Households run up debt to fund Christmas’, but that the ‘High street braces for a wave of failures‘.
- Somehow the Telegraph manages to issue a ‘Debt warning as shoppers cash in on post-Christmas sales’, while reporting on the business pages that ‘Shoppers shun the January sales‘.
The retail sector always hopes for a glorious sales blow-out to end the year. Many retailers depend on it, and since the economy depends on consumption, commentators watch the Christmas and New Year sales closely. Every year we have to spend more, because that’s what the growth economy requires.
This year of all years, that’s an irrational expectation: inflation is high and wages have stagnated, meaning that most people are around 3% worse off this year than last. But still, somehow, retail sales are supposed to rise. The only way that’s going to happen is through debt.
A great year for the retailers would thus be a disastrous one for personal finances, and vice versa. The growth imperative forces us into choosing between personal bankruptcies or the collapse of high street brands.
And yet, despite the newspapers covering both the struggling retail stories and the rising debt stories,we don’t seem to be able to put two and two together and see just how unsustainable this debt addiction is, or how hollow our GDP figures really are.