Economists call it the "paradox of thrift." What's good for individuals -- spending less, saving more -- is bad for the economy when everyone does it.
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The downward spiral has hammered the retail and manufacturing industries. For years, stores enjoyed boom times as shoppers splurged on TVs, fancy kitchen decor and clothes. Suddenly, frugality is in style.
I've been saying all along that this crisis would worsen. Meanwhile, the world's best and brightest in Davos, Switzerland have no idea what to do to make things better:
The five-day World Economic Forum in this Swiss alpine resort wrapped up Sunday in the same atmosphere of doom and gloom that it began, with a realization that the depth of the crisis is still unknown and the solution remains elusive.
This crisis lends itself to the kind of fundamental analysis that the world's elites are reluctant to perform. They are not about to question "the way things have always worked" until their own lifestyles are immediately threatened. My lifestyle is under no threat, but I like to think a few decades ahead. I am prepared to offer the WEF my own insights if they'll listen.
"Hello, Mr. Alfidi? This is the World Economic Forum. We'd like you to come to Davos to tell us what to do." I'll wait as long as necessary for that phone call as long as they pick up the tab for my flight and accomodations.