The world’s economies run on consumer spending. The more the consumer spends, the hotter the economy is. We have a problem right now called a recession, negative growth in the economy,  because the consumer is no longer spending as much as before. It seems quite an easy kind of explanation of what is going on.

So the so called experts that stand in front of TV cameras with their half baked theories and often ludicrous statements are eventually going to have their pontifications filed in the archives of comedy acts.  The recession is supposed to be all about the banks not lending money.  Prime reason we are told.

Well no. It’s really about the consumer not buying anymore. And it’s not because the consumer can’t get finance either. Pure and simple the consumer has woken up to the fact that a) they don’t need all the rubbish the advertising industry is dishing up to them and that the marketers are telling them they really need in order to feel good about themselves and b) actually more of the same of a).

Let’s have a look at some examples. An interesting article in one of the online newspapers spoke about the fact that mom’s are cutting down on spending by foregoing that extra pair of jeans or the new shirt they had their eye on. I would imagine that the ten or so pairs of jeans in their cupboard are going to do alright for them. I’m not talking about poverty stricken people here but middle class America.

Do you in all honesty, with a serious face, want to tell me that you have to renew your wardrobe every year?  But that’s what the fashion industry is trying to make you believe. You are not a worthy member of society if you do not wear the latest trendy pair of shoes, hat, gloves, shirt, jeans etc etc.

What about that little car of yours. It’s two years old. It can last another eight years without any major repairs, unless you bought a dud from Detroit which means you would need to replace it within six months. Ok. Kidding. I’m sure Detroit produces some good cars.

So you think to yourself, I’m not sure if I will have a job in six months time. Let’s delay on the purchase of that new car. Even if it is really cheap. Food purchases? Same isn’t it. You downgrade to cheaper cuts of meat, you avoid deli shops, don’t do that latte at Starbucks in the morning, read the newspaper online, take a brown paper bag lunch to work. There are myriad ways of saving every day.

All of that spending is what drives the economy. And every consumer, even to the wealthy folk out there, is cutting down a little here and a little there. It’s across the board. And it’s irrespective of whether the consumer can get finance or not. It has nothing to do with that. Bottom line, the consumer is scared.

Just a few days ago I was sitting having lunch with a bunch of people. And the recession came up, as it does at every occasion people are talking to each other.  Oh well, pipes up one person, it’s all because the banks are not prepared to lend money anymore.

Well not quite. My bank sent me a letter offering me a further business loan. And I promised to do a fun exercise and phone up my bank to ask for a personal loan and see how long it would take to get it approved. Ten minutes it took. Never mind the mail I received advising me that our unsecured personal overdraft facilities have been renewed for another year.

Visit your bank’s website and you will see that the advertising for loans is as aggressive. It’s not about availability of money.  The real joke is that in the UK the government is trying to force the banks to lend more money.

The same applies to company owners. They are not sure how the economy will go so they are not going to replace the computers, build new factory space, buy new equipment, introduce a new product range, employ more people. In fact, they are going to do the same as Mr and Mrs Consumer. Save a little here and a little there.  Retrench some staff, put capital expenditure on hold and wait out the storm.

The economic ‘powers’ are trying to think of all sorts of creative solutions to the recession dilemma. The Germans want to send out a pre-christmas cheque to every citizen to get them spending again during Xmas. Bush already tried that one.  Obama has plans to get government to spend on improving the infrastructure and in this way creating jobs.

China is pumping in billions to get its economy going again and the UK adjusted the VAT down by a few points amongst the many possible solutions being tried out by politicians. All puny little efforts. Not going to do the trick.

Possibly in the future some of these efforts will have some trickle down effect and make a difference. But right now, it’s being laughed off.  Just check the volatility of the major stock exchanges and you will get my meaning.

What’s the solution? Easy answer here. Create a world wide campaign telling everybody that the recession was a bad call made by economists who didn’t know what they were saying. Gag the media. No bad news allowed.  The message has to be that everything is rosy. Go live your life again.

Really? Wouldn’t that be lying? Haha. Whoever thought governments were honest is a touch naive. Dear reader. We are lied to by every conceivable media source, by every government, by every authority. This would not be anything new. And it would do the trick.

Let me give you a lovely little example. The USA and the UK are waging a war in Iraq on the basis of a lie.  The consequences to the ordinary Iraqis are horrific. Weapons of Mass Destruction anyone?  I vividly remember the diagrams and maps the US government showed on TV explaining why they urgently needed to start a war on an arbitrary country.

Check out this video of a discussion between Noam Chomsky and Robert Trivers to get a feel for the deception around. It’s an extremely intelligent discussion by two leading thinkers on the topic of deceit and how we are constantly bathed in it.

How do you start it? This is what to do. You get a groundswell of new mood going. You get Oprah to buy into the plan. Easy to do. She’s a huge fan of Obama already. He just needs to pick up the phone and ask a small favour. Offer her a front seat at the inauguration. That should do it.

Get Oprah’s personal finance guru Suze Orman to advise folk that they can start spending again. You get some new economists, preferably some with some credibility, to voice an opinion that the recession has hit rock bottom, things are moving up again and all things will be good in Lalaland.

And then you use the same folk on TV and in the print media to stoke the fire.  They know how to do it, after all they have fanned the flames of the recession story now for months.  It’s time they focused on the other side.

And folks! There are good news stories around of companies making good money, not seeing sales quite in such a ditch as predicted in fact not even noticing that there is a ‘huge’ recession happening around them.

Even the Black Friday figures looked quite good with an increase of 3% over last year’s figures to $10.6 billion. Add to this a boost of 15% more spent than last year during cyber Monday, the online promotion. The consumer hasn’t quite shut down as yet. Just got cautious and scared.

So never mind all these fabulous schemes to get the economies of the world out of this recession. Re-install a sense of confidence and hope again in the people of this planet and it will go a long way to getting the economy back on its feet. Simplistic? You bet. On the nail? Probably.