'Tis the Season

The commercialization of Christmas has always been troubling to me. It has been my experience that picking out gifts for people is difficult, maybe because of my practical side, but I'm always thinking about what someone might need or even use as opposed to just buying something and shoving it at them because it is expected at this time of year. Maybe that statement came out a bit raw, but the following article by George Will sort of hit my hot button :

Scroogenomics

However, my greater concern this season (as in the past several since the economic contraction began) is not so much the spending of money on senseless items, but the fact that people invariably borrow to do so. Coupled with recent notices by credit card companies to their customers that rates are going to be rising sharply (Capital One, for example, will be applying a 39.9% rate to some of its customers, and most card companies have put people -- even their best customers -- on notice that they can expect charges ranging from 19.9% - 29.9% on ordinary balances), the December bash will unhappily become a February surprise for many of these people. The great deals that people are rushing to embrace, paying with plastic today (Black Friday), will turn out to be ulcer-makers down the road.

The ultimate effect on consumer ability to spend will kick in some time in the Spring of 2010, as people struggle to pay for Christmas 2009. Consumer confidence and ability to spend are key to economic recovery, and I see a rocky road ahead.