11/28/2008

Black Gold Friday?

It is 'Black Friday'. Since I am still in Afghanistan, I will have to order from what Glenn Reynolds calls 'Old Reliable'.

Anyhow, the media has been bemoaning he conventional wisdom that since there has been dire economic new, that we will see poor retail sales this holiday season.

However, I think that this will end up being fairly wrong. Why would I think this, especially since "everyone knows" that we are in a recession and people are hurting? I think this for one reason. And that reason is graphically depicted by this image:



Six or even three months ago, people may have forgone Christmas spending because they knew they had to buy gas at historically high prices. But now that we are seeing prices that we haven't had in 2-3 years, people will be more willing to put those $$ to use for Christmas cheer.

Gas prices have the most direct correlation of any economic measure on how people view their personal economic situation. With prices low and dropping, I am betting thaat people will feel ok to buy more for Christmas.

I am sure that Paul Krugman will label it the 'Obama Effect', but I think I would rather term it 'Black Gold Friday'.

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