The Engine That Won't

At long last it seems as if the American consumer, whose borrowing and spending has buoyed the U.S. and global economies for most of the last 15 years, has decided to call it quits.

The evidence comes from retailers who report a disappointing January -- so disappointing that the International Council of Shopping Centers called this the worst January since 1970, automakers now expect 2008 to be the worst year in a decade and Wal-Mart reported that shoppers were using Christmas gift cards to buy food.

And it comes from credit card companies that report a sharp slowdown in the growth of outstanding debt along with a rising tide of delinquencies.

The retreat by consumers comes as employers, collectively, have stopped adding to their payrolls and companies have begun to pull back on their purchase of new software and computers. Meanwhile, as new housing construction continues to fall and inventories of unsold homes rise, the long-awaited bottom of the housing market seems to recede further on the horizon.

In a rare display of speed and bipartisanship, Congress sent President Bush a $152 billion package of individual and corporate tax cuts to cushion the recession that even economists now predict.

Next week on Wall Street, investors will test whether a floor can be put under the Dow Jones industrial average at the 12,000 mark. If not, it may be a quick ride down to 11,000 and an extended bear market.