NEW YORK (AP) -- It is difficult at times to understand the insatiable desire of the American consumer for houses and automobiles until you appreciate the power of merchandizing.
It is a dazzling, conquering power based in advertising, spurred on by aggressive sales representatives, and made almost irresistible by financing terms that have diminished, if not eliminated, the pain of paying.
Appeals to the imagination and the ego are part of the formula. Think of your heightened image as you drive a BMW. Think of your family and all the fun and comfort they will have in the house of their dreams.
More than 17 million cars and light trucks were sold last year, a record, and closer to 18 million will be sold this year, providing a new car -- or what used to be called new -- for every third or fourth family.
Remarkable in itself, the number becomes more so when you realize that buyers are moving up, albeit slowly, from the lower-end vehicles to the more expensive models, where gasoline is consumed more swiftly
Gasoline comes from the very same source as home heating oil, and the demand for it to run vehicles contributes to a fuel shortage that could leave homes chilly throughout the winter, a connection usually ignored.
Moreover, the news in recent weeks has been filled with accounts of blown tires and overturned cars and trucks, events still not sufficiently dire to overwhelm the merchandizing genius that creates desires.
Not all the credit goes to the automakers and the lures they devise. Financial enterprises, once fortresses of denial, have become consumer friendly and aggressive, extending terms even before being asked.
Sales of new single-family homes slowed a bit in August to an annual rate of 893,000, but only after an explosive jump in July. And sales of used homes leaped 9.3 percent in August, the biggest rise in 14 months, to an annual rate of 5.2 million units.
If car buyers have an inducement in the form of easy terms, homebuyers have it doubly, enjoying not just relatively low rates but tax deductions as well. Why, even government joints in the merchandizing effort.
All this is taking place, mind you, while the consumer savings rate all but disappears from the gauges, meaning many families aren't saving for today, or for tomorrow's tuition charges or retirements.
That they fail to save is not because they haven't been told. The savings message has been broadcast and printed as loudly if not as subtly and creatively as that of the sellers, but it fails to build an audience.
Consumers, it appears, are too busy getting and spending, buying and planning to buy, and otherwise responding to the seller's enticements. Well-trained by the market, they remain ready and willing to respond.
The University of Michigan consumer survey in September recorded the most optimistic long-term economic outlook in its history. It's a history that goes back to 1950, when modern merchandizing was in its infancy.
End Adv PMs Thursday, October 5.
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