Consumers fail to learn lessons

I suspect the key to economic survival is to live within your means. That basic premise of economics applies to your household budget but it also applies to state and federal budgets.

The federal government - citing extraordinary times - has clearly abandoned the principle of living within its means. And here in Missouri, the General Assembly adjourned Friday while leaving much of the heavy lifting to Gov. Jay Nixon in terms of cutting state spending to balance our delicate state budget.

But recessions, such as the one that has blanketed this country for two years, force consumers to rethink their purchases. Even those consumers who still have disposable income tend to watch their purchases more carefully given the uncertainty of the future.

Well retailers this week signaled that good old American greed has returned. Reports published this week show that retailers are returning the pricey items to the shelves that were largely ignored for the past two years.

On the one hand, this return to opulence may signal some optimism in our economy. But it's equally troubling that many of the questionable practices that crimped household budgets are returning.

The lesson is that we don't learn economic lessons very well. That shiny bobble that we once coveted has returned to the shelves. And I strongly suspect that bad habits don't ever die, they just go into hibernation.

High-end and not so high-end retailers are slowly reintroducing some costly items that have been gathering dust in some dark back room. It's been almost two years since retailers began in full force to cut prices, offer modest merchandise and put the $1,500 python shoes in storage.

The pythons are back and apparently the retailers believe they will sell.

It's debatable if this economic change is a product of returning greed or a true sign that consumers believe the worst is behind us.

Of course, a fascinating aspect of human nature is that perception is much more important than reality. If we believe something we will universally ignore even obvious signs that we may be wrong.

Much of the underpinning of the sub-prime fiasco was the issue of people buying things they could clearly not afford. The recession provided a dose of reality and we tempered our spending.

Ignore the stock market, ignore the collapse of the European economy, ignore the deficits that are beyond our imagination.

If your neighbor struts in his $1,500 python shoes and drives away in his new car, what's a guy to do? After all, keeping up with the Joneses is as American as apple pie, baseball and debt!