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OPINION: Spend or save this holiday? What's a patriot to do?

Steve Lopez is a columnist for the Los Angeles Times, where this first appeared.

So here I am at the mall, looking at a pair of $228 jeans, and I can't remember my duty as an American: Am I supposed to buy them to help fuel the economic recovery? Or am I supposed to sock away every spare nickel because the national buying binge helped cause the crash and I could be out of work by Friday?

If you listen to politicians and pundits, you'll hear it both ways, along with a lot more conflicting gibberish. Consumer confidence is up; consumer spending is down. The recovery is kicking into gear; we're headed for another cliff. Real estate is coming back strong; the foreclosures have only just begun.

It can all be pretty confusing, so I asked economist Christopher Thornberg, who saw the housing meltdown coming, to meet me at the mall and help clear things up. You know what, though? I don't need an economist to tell me not to pay $228 for a pair of jeans. I dropped them back on the pile faster than you can spell T-A-R-G-E-T.

Thornberg assured me I'm not crazy to think I'm getting mixed signals. He also said I'm not likely to hear the truth from either Washington politicians or Wall Street barons. And what exactly is the truth, as Thornberg sees it?

Wall Street is nearly as ruthless and unregulated as it was two years ago, thanks in part to everyone on President Barack Obama's economic team being of Wall Street, by Wall Street and for Wall Street.

Although Joe Blow's consumption is down a bit, his wages have been chopped, so as a percentage of income his spending is at an all-time high.

The trade deficit is still way out of whack, in part because of our spending habits, and the national debt is gargantuan. So if you're on the bubble, this holiday season isn't the best time to buy things you don't need with money you don't have.

"If you don't have the ability to pay off the credit card at the end of the month, you shouldn't use it," said Thornberg.

That sounds positively un-American - particularly in December. But Thornberg insisted that debt is something you should only take on for an asset that you pay for over many years. Like a house. Not iPods for the family, he said, or you're asking for big trouble.

I think American consumers are catching on. I was at the mall in late morning on a weekday, just a couple of weeks before Christmas, and some stores had more employees than shoppers.

So if we're not flooding the malls, or buying cars and furniture, where's our money going? Consumer spending includes big-ticket items like housing, education and health care. With the possible exception of housing, there aren't a lot of bargains to be found, so we're stretched pretty thin, with unemployment expected to stay high into next year and hundreds of thousands of foreclosures still to come.

Even Santa looked as if he was on the bubble. He sat alone on a bench, waiting for some business. He told me he's been wearing the red hat and white beard for 13 years, and he's hearing something a bit different this year. The little rascals are asking for dolls and trucks instead of iPods and computers.

Santa said he gets the occasional adult sitting on his lap, and they've got problems too. "They tell me they have no job and no money," he said. Those are things Santa doesn't have in his sack, so what's he tell them?

"I tell them to have faith."


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