My family spent its last Thanksgiving in Montgomery County, Maryland this past weekend. Montgomery County has among the ten highest median household incomes of any county in the country, and unemployment here remains low., at 3.3 percent. The county's bond rating is AAA (for whatever that is worth nowadays).
But when we went to White Flint Mall yesterday, the Sunday after Thanksgiving, it was nearly empty. I bought myself an unexpected little gift--a Banana Republic shirt that lists for $79 was selling for $27 (I like their shirts, but I think at list price they charge too much for them). But even with deep discounts, we did not have to wait in line to check out.
Fundamentals are strong here, and yet people aren't buying stuff. Paul Krugman is telling us to turn to Keynes for an explanation, and so I have been rereading the General Theory. It is a slog of a read, but Keynes' insights apply to our time more than those of any economist since his time.
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