Is a Biden Recession Coming in 2023? One Odd Holiday Indicator Says Yes
It’s apparently not a very happy Honda days this Christmas season — and that could spell trouble for the White House in 2023.
You’re undoubtedly tired of them by now — whether it’s Lexus’ “December to Remember,” Chevrolet’s “Red Tag Sales” or, yes, the “Happy Honda Days” ads, they all blend together. On Dec. 25, outside an implausibly expensive modernist house, in a snowstorm so obviously generated by computers you can almost see the video effects guy hunched behind his MacBook Pro, a husband removes his hands from his wife’s eyes.
There, in the driveway, is a brand-new, specced-out, top-of-the-line vehicle — with a big red bow on the roof, the luxury SUV curiously not covered in any of the snow falling all around it. A look of gratitude, of surprise instantly washes over the wife’s face, as if to say: Thanks, honey! I’m so glad you made a major financial choice and disguised it as a Christmas gift, one that I absolutely can’t return even if I like the car I already have!
Yeah, so apparently we’re all decadent and doomed. Remember the good ol’ days when Lucy Van Pelt informed Charlie Brown that the commercialization of Christmas was due to it being run by “a big Eastern syndicate”? In the interim, they’ve farmed it out to the folks in Detroit, Japan and Korea, apparently.
But apparently this works, because these ads run year after year, scarcely changed but for the vehicles. Not only that, but it apparently isn’t just to entice regular car buyers to go to the dealership around Christmastime with their spouse to do the sensible thing and pick out a vehicle together.
People do really buy these things as gifts — and, as a kind of proof, there’s an actual giant bow industry that’s sprung up, so that, even if your house doesn’t look like it was designed by Frank Lloyd Wright or there’s not a CGI snowflake to be seen, you can still recreate the big-red-bow-on-top part of the commercial.
And, if you needed another group of experts to tell you the economy is headed for a for real, can’t-just-redefine-the-word recession in 2023, don’t just ask Wall Street. Ask the giant bow people.
According to a Dec. 20 report in The Wall Street Journal, things are looking bleak in huge bow-land, as manufacturers “report a steep decline in business this holiday season.
“As with many economic indicators of late, the data is mixed. But if weak bow sales are taken as a shiny red indicator, they may foreshadow a drop-off in the number of cars given as gifts this year,” the Journal reported.
“Orders are down 35 percent this holiday season at King Size Bows, which sells thousands of car bows each year to dealerships and individual consumers. That works out to hundreds fewer bows than normal, [said] Amber Hughes, the Costa Mesa, Calif., company’s owner.”
Meanwhile, Tom Maoli, who owns a Lexus dealer in New Jersey — repping the company that arguably started this bows-on-cars mess — said he ordered fewer bows this year because sales of new cars are down.
Now, part of that is based on the consistent inventory problem that’s plagued the auto industry due to supply chain issues. New car sales will be down significantly from 2021, according to estimates — 13.7 million new cars off lots vs. 14.9 million in 2021.
However, another sign that consumers aren’t necessarily as confident in making a new vehicle purchase is the rise in people buying the car they’ve already been leasing.
“It’d be hard to turn around and put a red bow on a vehicle you’ve already had for three years and try to pass it off as something new to someone,” said Tyson Jominy, the vice president of data and analytics at J.D. Power.
At least for the auto industry, this spells trouble — because, yes, it turns out the data show there are some people who really do buy cars as presents, which means a huge reduction in giant bow sales, however odd it may seem, is a canary in the coal mine when it comes to a serious economic slowdown.
“Real people — not just the ones who appear in commercials — do occasionally buy cars for loved ones as holiday gifts,” the Journal reported.
“Mr. Maoli figures that roughly 15 percent of holiday-season sales at his dealership are gifts, which is in line with estimates that Lexus says it has heard anecdotally from other dealers over the years. December was the strongest month for car sales from 2010 to 2020, according to an analysis from the research firm J.D. Power. During that period, 9.6 percent of sales occurred in December, and specifically among luxury brands, December accounted for 11.5 percent of sales.”
So no, it won’t be a December to remember. The problem is that 2023 ain’t looking so hot either — and not just because of supply-chain issues.
As CNBC noted in a humbug-esque report issued the day before Christmas Eve, “Economists have been forecasting a recession for months now, and most see it starting early next year.”
“Historically, when you have high inflation and the Fed is jacking up interest rates to quell inflation, that results in a downturn or recession,” Mark Zandi, chief economist at Moody’s Analytics, told CNBC.
“That invariably happens — the classic overheating scenario that leads to a recession. We’ve seen this story before. When inflation picks up and the Fed responds by pushing up interest rates, the economy ultimately caves under the weight of higher interest rates.”
As we know, President Joe Biden’s administration told us all, at first, that inflation was transitory. Then it wasn’t transitory, but it was controllable, and we were, by no means, invariably headed to a recession. Also, we were assured the federal government’s drunken-poker-player spending spree under Biden and his Democratic Congress had nothing to do with record inflation, even if pure common sense dictates that was rubbish.
Well, time’s up, folks: Winter has come, and the happy Honda days seem to be over. If only Chuck Schumer could have snuck in a bailout for those giant-bow folks in the pork-laden $1.7 trillion omnibus they shoved through Congress at the last minute. Heaven knows, if any industry needs bailing out right now, it’s them.
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