Avoid panic and we can lay groundwork for prosperity

This long Thanksgiving weekend brought more than the usual jarring juxtapositions. With our economy wracked by recession and doubt, the seasonal messages clash with a resounding clatter.

Each year, I wonder at the sharp contrast between Thanksgiving Day and the ensuing Black Friday. For many of us, Thanksgiving is the uncluttered holiday, the one with the least emotional and commercial baggage. It’s a time for family, reflection, gratitude and home-cooked meals. The apocryphal Thanksgiving stories reinforce faltering virtues, attesting to forbearance, humility, community and perseverance.

Then, the dam breaks and the floodwaters of consumerism pour over the malls on the day known as Black Friday and commonly understood to refer to the time when retailers move “into the black” of profitability.

Retailers watch this shopping season with apprehension; shoppers, with uncommon anxiety. Long lines and crowded pre-dawn safaris through the retail jungles were common. While sales appear to have been stronger than expected, they were likely spurred by deep discounts that squeezed profit margins. It’s too early to speculate that this year’s shorter holiday shopping season will disprove economists’ dismal predictions.

Monday the National Bureau of Economic Research confirmed that the nation has been in recession since last December. Unsurprisingly, the Rasmussen Consumer Index for the month of November plumbed an all-time low, hovering at 64.5. Consumers now express less confidence in the economy than they did in the month following the 9/11 terrorist attacks.

While there is no denying the severity of the economic crisis, the low confidence ratings go beyond simple recognition of an uncertain economy. Two weeks ago, state economic forecaster Arun Raha sliced another $1.9 billion from the incredibly shrinking estimate of expected state revenues through fiscal 2011. At the time Raha said, “Our state revenues are dependent on people buying cars and homes and gifts over the holidays. And right now, no one is buying … at best, we can expect a holiday season that shows no decline over last year.”

Daily, we read of tightened consumer credit, declining housing values, foreclosures and layoffs, with pundits routinely invoking parallels with the Great Depression. No wonder consumers have, in Raha’s words, decided to “just sit on their wallets.”

Economic qualms have also fueled desperation in some shoppers. Responding to the fatal trampling of a Long Island Wal-Mart employee, some psychologists spoke as if Black Friday were a frenzied retail mosh pit filled with fearful and fevered consumers struggling to prevail among the pack, to score before their last opportunity is lost. Think of it as the panic before the hoard.

Meanwhile, after years of soaring revenues, state and local officials are rediscovering the lost art of subtraction. Stories of cutbacks and lost public services contribute to the prevailing disquiet. Incessant speculation, trial balloons strategically released to maximum effect, and the coordinated protests of interest groups compound consumer distress.

Somehow, we’ve lost our sense of proportion and balance, as if we’ve never seen hard times before. Despite the rhetorical allusions to the Great Depression, this isn’t it. Even with the latest jump to 6.3 percent, the state unemployment rate is just over half the November 1982 level of 12.2 percent. For most Washingtonians, times are straitened, but not dire. Under most scenarios, pullbacks in public spending won’t shred the safety net so much as roll back recent increases, an appropriate response to changed circumstances.

These are uncertain times. But we make them worse when we clamp down too tightly on our consumption. If the boom had its roots in irrational exuberance, a too easy flow of credit and cash, the bust has been deepened by parsimony disproportionate to current conditions.

Ideally, commerce is an extension of community. Finding the right gift for a loved one, purchasing something to place under the “giving tree” for the less fortunate, and chatting with neighbors, friends and salespeople cement relationships and affirm shared values.

In confronting our challenges, we will be better guided by the attitude of Thanksgiving than the agitation of Black Friday. Policy makers, like prudent shoppers, should avoid the hot pursuit of short-term stimulus, excessive spending and the demands of voracious petitioners. Rather, they should use this time to lay the foundations of a lasting recovery.

Richard S. Davis writes on public policy, economics and politics. His e-mail address is richardsdavis@gmail.com.