Bloomberg writes:

One of the last holdouts in consumer spending — luxury- goods purchases — may be collapsing under the weight of a sluggish and potentially contracting U.S. economy.

Moving from cognitive bias to just plain old schadenfreude, the NYT documents the whining of the heavy metal owners coping with $100+ tankfuls.

I have no sympathy, in fact the reverse. To a considerable extent, the hgh price of gasoline today is due to the wasteful behavior of these people. Their self-esteem issues and status striving have cost me thousands of dollars over the years. Bring on the European $10 gallons and get these ludicrous and ungainly behemoths off the road once and for all.

Another echo of the past. From the Detroit Free Press:

When Chrysler announced plans to cut 12,000 jobs in November — on top of 13,000 over three years — executives were assuming Americans would buy fewer vehicles in 2008 than in any year in a decade, only about 15.5 million. Nardelli said that “conservative estimate” was pretty close for the first three months of the year.

But sales were 7% to 8% below that rate in April and May. And so far in June, he said, J.D. Power and Associates and Citigroup are seeing a sales pace that is almost 20% lower — only 12.5 million vehicles per year.

The flashback (from PBS):

Spring: The American economy shows ominous signs of trouble. Steel production is declining, construction is sluggish, car sales are down, and consumers are building up high debts because of easy credit. Yet the stock market continues its upward momentum, heedless of real economic indicators.

A little good news. General Motors signalled that the end was near for the Hummer product line.

Wagoner said GM is reviewing its Hummer brand and could sell the military-derived SUV line, which has become synonymous with gas-guzzling excess and has hurt GM’s image at a time when consumers are demanding more fuel efficiency.

Gas-guzzling excess? Well with a basic curb weight of over 6,600 pounds, what do you expect? From what I understand, you expect somewhere between 8 MPG in the city and 14 or so on the highway. A classic symbol of conspicuous consumption. Big. And tall, so you can look down on your inferiors, the little people scuttling around in their Hondas. I’ve always thought it would be easier if you could just buy a status badge from the government, like $1 million for a bronze, $10 million for a silver, $100 million for a gold and so forth. Then you could just wear it on your lapel and you wouldn’t have to spend money on Hummers or Porsches, you could just buy safe, comfortable and efficient transportation. Everybody who saw the badge would know you had paid a lot of money for it. As a badge-wearer, you could sneer at the badgeless peasantry. Or patronize the wearers of lesser badges. The revenue from badge sales would help keep taxes low. Resource consumption would be minimal. Sounds like a win-win to me. I mean, this isn’t a new idea. Before there were Hummers, many civilizations had sumptuary laws that limited the wearing of certain articles of clothing, or colors or fabrics, to visually mark social status. Relatively cheap, and successful. Why not? Instead of the huge grilles and front ends of the pickup trucks and SUVs, why not just bring back the well-stuffed codpiece?

From the NYT:

State and city governments have yet to shrink the economy; indeed, they have even managed to prop it up. They have quietly maintained their spending at pre-crisis levels even as they warn of numerous cutbacks forced on them by declining tax revenues. The cutbacks, however, are written into budgets for a fiscal year that begins on July 1, a month away. In the meantime the states and cities, often drawing on rainy-day savings, have carried their share of the load for the national economy.

That share is gigantic. At $1.8 trillion annually in a $14 trillion economy, the states and municipalities spend almost twice as much as the federal government, including the cost of the Iraq war. When librarians, lifeguards, teachers, transit workers, road repair crews and health care workers disappear, or airport and school construction is halted, the economy trembles. None of that, or very little, has happened so far, not even in California, despite a significant decline in tax revenue.

And of course California, with its incredibly lavish compensation of city (see Vallejo (PDF) for an example) and state employees is a big swinger here.