Retail Sales Up Mid-2013 But Why - A Historical Perspective

We saw a huge uptick in retail sales, which bodes well for our economic indicators showing an Obama Administration recovery. Still, before you throw up your hands and signal victory, I think you and I need to talk. Now, it's no secret that I have little respect or love of socialist leaning administrations or governments here or anywhere else on this pale blue dot - neverless, do not let that taint the reality of what I am about to say here today. Let's talk.

First, when car sales are down, the administration, regardless of who is in power - Clinton, Bush, Reagan, Carter did the same also - pull those auto sales figures out of the retail sales economic data, separating them, but when sales are up, they throw those numbers back into the mix saying; "autos really are part of retail sales," and thus, they should be illustrated together. Well, figures lie and liars figure and administrations obviously have political agendas - no surprise there, so I am not picking on the Obama Administration.

However, when Barack Obama goes on TV and reads from his teleprompter how he saved the auto industry - when it was actually Bush Jr. who started the bail-out of the auto industry - and points to auto sales being so strong, along with retail - that his "recovery" strategy is working - well, I just cringe. Why you ask? Well, because it just is not so. And do you know why auto sales are up? Low interest rates and easy money car loans - that's why. There is only one problem with all of that easy money to consumers.

There was an interesting article in the Los Angeles Times on May 21, 2013 titled; "Car-Loan Delinquencies, Repos Surge," by Ronald D. White which noted that "the number of auto loan delinquent at least 60-days climbed 12.4% in Q1 of 2013.

To me retail sales indicate real transactions where real money is exchanged for goods. If auto dealers find hapless questionable consumers to sign their name to a loan document and take a car for near no money down, no interest, and no payments for 90-days, well, that is not really a sale in my view. Further, it does not show a recovery of the auto industry, it shows a revival of incompetent business practices and more down the road can kicking by corporate leaders, economists, bankers, and politicians. Please consider all this and think on it.