While whiling away the day, I came across a short video wherein the state of the US economy was discussed. At one point one of the expert panelists (for why would he be asked his opinion unless expert?) gave a short monologue about the slippery fish that is consumer confidence. It was gone, he said, but it may come back, indeed, there are indications that this is already happening, which gives hope that consumers around the country will soon regain their lost gumption, are on the verge of consuming with the same enthusiasm and courage as before the onset of the current economic crisis. As it is though, consumers have little confidence to speak of, yes, purchase goods and services they continue to do, but with trembling hands and sweating brows.The idea of "consumer confidence" causes me to pause in wonder at yet another macroeconomic concept that commands such widespread respect, but which seems to me to depend on the most tenuous and feeble foundations. Economists talk about the confidence of the consumer as it relates to enormous aggregates of statistics, the spending patterns of millions summed in graphic charts and lists of percentages. Put crudely and simply, the more people spend, the more confident they are, and such confidence bodes well for the economy in general, it is thought, because a person, sorry, consumer willing to part with his or her money means that greater risks are possible, and greater risks of course lead to exponentially, telescopically greater profits. Already, the tides are beginning to turn if the return to multi-million dollar bonuses at Goldman-Sachs are to be taken as a sign.
Fine, macroeconomics apparently means something to some people. I can accept that, they can have their scholastic branch, can delude themselves that they are talking about the world as it really is. I have my own fantasies to impose on the world, who am I to prohibit others from their own? But what of smaller vantages? How about the confidence of a single consumer? The only consumer I have experience with is myself and I must confess: I am not confident. The world appears awash in goods and services I might spend money on. Though many of these aren't exactly aimed directly at me, many others are and I struggle when deciding whether to buy them or not. Come to think of it, I hardly purchase anything outside of the necessities - food and shelter - with anything close to a feeling of confidence. Most often, I'm deeply uncertain about what I'm buying, I have my doubts that I need it, that it's what I want, that it will make me happy. If an economist asked me if I'm confidently consuming goods and services I'd have to admit that I'm a weak-willed worry wart.
"Consumer confidence" is a misnomer, on the surface referring to the buyers' attitudes, but in reality simplifying to the point of willfully distorting far more complex phenomena. The motives behind why people spend money the way they do was a question banished from economics courses with the advent of positive economics. From then on economists wanted the facts only, damn you, and they'd accept nothing but the facts. The behavior of human beings is no different from mitosis or photosynthesis, these positivist economists pretend, just a natural phenomenon among many requiring the cool temperament of the scientist, unclouded by sticky bias.
Macroeconomics does not concern itself with the motives behind the daily decisions made by individuals; it could care less if buying a $15 toaster at Walmart truly reflected a person's confidence about the purchase. For all economists care, she could be destitute, her stomach pocked with ulcers over anxiety about meeting her family's needs day after day. Ask her, "Ma'am, please quiet your uncontrollable children and tell me: Are you confident?" I wonder what she'd say. But no matter, it's not a real question to the scientists of the economy. As soon as that piece of junk, I mean toaster, is purchased, its statistical referent is instantly dispatched to the azure regions of indubitable statistics, where the lords of econolympus look to their great scrolls of truth and they proclaim, "Behold the confidence of the consumer."




