By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – I know this isn't the cheeriest of subjects to discuss during the holiday season, but here's some sobering news you might want to think about while you're shopping. According to the Administrative Office, in the U.S. courts, more bankruptcies were file in the Fiscal Year 2002 than any other time in history. I'm Maxine Shapiro with KERA Marketplace Midday.
For the 12-month period ending September 30th, 2002, bankruptcy filings were up 7.7% from 2001. And for the Northern District of Texas, including Dallas, Wichita Falls, and Fort Worth, for the 12-month period ending November 30th, bankruptcies were up 9.5%. The high unemployment rate, almost $11 trillion lost in the market, and the fact a large portion of us spend beyond our means are contributing factors to these record numbers.
Personal or non-business make up the majority of bankruptcies. Over one and a half million of those were filed this year while there were less than 40,000 businesses that filed. And there's a good reason for that. Businesses aren't spending and consumers are! Boy, does this get my goat. I know "two-thirds of the economy is fueled by consumer spending" - I say it in my sleep. But enough is enough, we're getting tired of spending, we have no more to spend - especially when corporate America is playing Scrooge. They're not creating any new jobs and the people that are working are working a whole lot harder. Productivity was up last month, while 40,000 jobs were lost.
And I can virtually guarantee you when Congress comes back, there's going to be a new bill on the table to make it harder to file for bankruptcy. After six years of trying, they almost got away with it last year. The banking industry is a powerful lobby and making it harder for the consumer to file is their number one goal. Mmmm, maybe their second. First would be to send us as many credit cards as they possibly can.
So as you continue adding names to your gift list, keep in mind, at the end of the month the bills will come. The economy will do just fine if Aunt Jean gets a sweater made of a wool-blend instead of cashmere. It's time to do whatever we can to bring the bankruptcy stats down. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m. To contact Maxine Shapiro, please send emails to mshapiro@kera.org.