In February 2009, the stock market hit rock bottom, and a lot of people freaked out. People had stopped buying things, as their portfolios were ravaged and their homes fell dramatically in value. Buying a new car when you are being foreclosed upon is just not in the cards. GM and Chrysler went bankrupt. Many today don't remember those times, even though there were only a few short years ago. Some of these "Alt-Right" Nazis were only 10 or 11 years old at the time. Today we listen to their "opinions" as if they were wizened.
Lack of consumer confidence can crash an economy or at the very least, make it worse. Once people stop spending, companies lay off employees, who in turn stop spending. News of layoffs make those who still have a job, nervous. They stop spending. Company profits are down, share prices drop, dividends are cut. Retirees, living off savings and investments, get nervous and stop spending as well. It is a vicious circle.
Of course, some (Republicans, mostly) complained that the recovery wasn't "good enough" and that we were entitled to massive growth rates, conveniently forgetting that massive growth is what lead to the recession of 2008 in the first place. Like the alt-right, they seem to have no collective memory, at least not extending back more than 18 months (except when they want to blame Bill Clinton for the housing bubble, at which point their memory goes back 20 years. Elephants never forget - but perhaps they have a selective memory).
And the boating industry sales numbers seem to reflect this. When the shit hit the fan in 2009, sales of boats tanked - but sales of high-end yachts barely had a hiccup. Sales of vacation cottages went south - sales of luxury resort mansions kept going. And so on throughout the market. Today, sales of upper-end "luxury" homes are through the roof, while young people starting out lament there are no "entry level" homes for sale - nor is anyone building them.
Those who have money still spend it, the middle-class, striving to imitate the upper classes, was wiped out. And perhaps we saw this same pattern in the 1930's, where luxury car sales ironically increased, while the middle-class started buying stripped down versions of Buicks (Marquette) and Oaklands (Pontiac). Meanwhile, Cadillac introduces a V-12 and then a V-16. The rich still had money to spend.
Today, unemployment is low, but so are wages - a deadly combination. With low wages and low unemployment (and no benefits with most jobs) there is nothing to stop a worker from saying, "I quit - I can get a job just as shitty as this across town!" And they are right - they can. But they still have no money to spend, and most are living "paycheck to paycheck" so they can afford their smart phones.
Throw in trade wars and perhaps real wars, as well as an overheated stock market (particularly with regard to so-called tech stocks), and we might see a pullback in the economy next year.
If you are a young couple looking to buy a house today, and are paying for your own health insurance under Obamacare, do you feel confident enough to put down a down payment, not knowing what your tax bill or health care bill will be like next year? Quite frankly, I think you'd be insane to buy right now, unless you could predict these actual costs and budget accordingly.
People buying houses, on the other hand, are going to look at that tax deduction very closely, and how much they pay for the house will be based on how much they get back on their taxes. If there is no deduction for mortgage interest (for middle-class homes, Trump proposes protecting this for richer people) then people will see less savings and thus pay less for such homes. This could depress home prices - for the middle-class.
All I can say is, I am losing confidence in the market, largely because the people running things seem a little unhinged these days. Not only that, they are not proposing minor changes to our laws and economic system, but rather instituting radical "overhauls" of our tax code and health insurance system - with outcomes that are either unpredictable, or, if predictable, look like misery for middle-class people (this is a good time to be a Billionaire, though, although is there ever a bad time to be one?).
Because of this, we sort of gave up on the idea of buying a boat, at least for the time being. It just seems safer to have money in the bank than a hole in the water. And of course, these means not buying a truck to tow it with. If the economy does go down, there will be a lot of cheap boats for sale next year, just as there were in 2009. So maybe it would pay to wait. Or maybe it would pay not to buy at all.
Multiply my anxiety by the large number of Americans who are struggling to get by or retirees who are trying to figure out if they will outlive their money, and it doesn't look good, even as the financial press reports "record profits" for companies that still have P/E ratios in the hundreds.
Funny, but they said the same thing back in 2007.
UPDATE: Blue Cross tells me that my health insurance will go from $18.72 a month this year to $675.89 a month in 2018. I am not kidding. This is serious shit.
Thanks President Trump! You really fixed Obamacare!
Good thing we didn't buy a boat.....