How The Government Shutdown (May) Steal Christmas

How The Government Shutdown (May) Steal Christmas

Posted on October 15, 2013

Everyone in The States likes holiday shopping a lot... 

Grinch in the chimneyBut the Government, who work just North of Farragut, do NOT!

The Government hate Christmas! The whole holiday shopping season!

Now, please don't ask why. No one quite knows the reason.

It could be that their heads aren't screwed on quite right. It could be, perhaps, that their well-polished designer shoes are too tight.

But I think that the most likely reason of all may be that their hearts are two sizes too small.

The National Retail Federation is hoping that the government's heart grows three sizes and can resolve the shutdown as soon as possible. The NRF, which says that 42 million Americans work in retail and it's related fields, penned a letter to each member of the House of Representatives and Senate imploring both Congress and The White House to bring the shutdown to an end.

In their letter, the NRF explain the potentially devastating effect that the shutdown will have on the upcoming holiday shopping season that they had projected would generate $602.1 billion in sales, or 20% of the retail industry's estimated annual revenue. The effects of the shutdown, they claim, will be calamitous and far reaching, going so far as to say that "only the collapse of Lehman Brothers in September 2008 has done more damage to consumer confidence in such a short period of time."

Then the Government slithered and slunk, with a smile most unpleasant,

Around the whole room, and they took every present!

Pop guns! And bicycles! Roller skates! Drums! Checkerboards! Tricycles! Popcorn! And plums!

And they stuffed them in bags. Then the Government, very nimbly,

Stuffed all the bags, one by one, up the chimney!

The simplistic notion that you may not be able to buy as much new stuff this holiday season may pale in comparison to people being out of work and the underprivileged not getting the food or medicine they need and every other dire situation hastened by the shutdown, but it's much bigger than that. The government shutdown, which just passed the two-week mark, is going to mean a whole lot more than Cindy-Lou Who seeing fewer toys under the tree come Christmas morning.

As retailers are trying to hire more than 700,000 seasonal employees to work during the holiday shopping season, the government's eVerify system for determining potential hires' immigration or citizenship status for retailers is currently unavailable.

Grinch on his sleigh

What's more, even as U.S. Customs and Border Protection are still operating and able to move holiday merchandise into the country, there are still another 40 government agencies involved in clearing holiday merchandise off the docks and into stores that have been furloughed, rendering the stock of many in-demand items uncertain.

These residual effects precipitated by the shutdown are only serving to fuel further consumer worries over the economy. The hit consumer confidence is taking and the resulting weakened sales in the retail sector may spill over industry tied to consumer spending.

Which is to say, every industry.

No matter your political affiliation, surely by now we can all see the necessity of Congress resolving the government shutdown. In the meantime, we may have to get together and sing some daa-hoo dores to get the Grinch government to bring the sleigh back down the Hill.

"That's a noise," grinned the Government,
"That I simply must hear!"
So they paused. And the Government put their hands to their ears.
And they did hear a sound rising over the snow.
It started in low. Then it started to grow...

Here's the full text of the NRF's letter:

Dear Majority Leader Reid:

On behalf of the nation’s retail industry and the 42 million Americans who work in retailing and related careers, I am writing to urge the House and Senate to negotiate an immediate end of the shutdown. We strongly support passage of both a continuing resolution to provide for funding of the federal government into the next fiscal year and a measure to raise the nation’s debt ceiling.

There are warning signs that an extended shutdown will have serious repercussions for the U.S. economy. Gallup’s Economic Confidence Index fell 12 points last week, making it the second largest weekly drop ever. Only the collapse of Lehman Brothers in September 2008 has done more damage to consumer confidence in such a short period of time. For retailers – who represent the sector of the American economy most closely tied to consumer attitudes – these numbers are deeply disturbing. Moreover, since the very modest growth the U.S. economy has experienced following the 2008 recession has been attributed to the willingness of the American consumer to keep shopping, a lasting decline in consumer confidence is likely to translate into increased unemployment and slower growth in coming months. In view of the fact that the current recovery has been the weakest of the post–World War II era, we hope that Congress and the Administration will want to move quickly to avert lasting damage to the economy.

Beyond the consumer confidence numbers, the shutdown is also having a material impact on retail operations. For example:

• Monthly employment numbers that provide a vital measurement of the health of our economy that were scheduled to be reported on October 4 were not available.

• Monthly retail sales numbers, another important barometer of America’s economic strength, scheduled to be reported on October 11 will not be available.

• With retailers in the midst of hiring more than 700,000 seasonal workers for the holiday shopping season, the eVerify system for determining the immigration/citizenship status of new hires is unavailable.

• While U.S. Customs and Border Protection inspectors remain at work on the docks processing holiday merchandise being imported into the country, many of the 40 government agencies with a roll in clearing cargo have furloughed vital staff, making retailers’ ability to import merchandise during the crucial holiday season uncertain.

• With new FCC restrictions on the use of auto-dialing and pre-recorded calls to consumers – a vital part of marketing and customer service – set to go into effect October 16, no one at the FCC is available to offer guidance on how to comply with these rules.

These and other problems come at the worst possible time for the retail industry. Retailers are about to kick off the annual holiday season, which is forecast by NRF to hit $602.1 billion in sales. That amounts to 20 percent of the industry’s annual sales, as much as 40 percent for some individual companies.

Retailers already have more than 4 million cargo containers of merchandise on their way to store shelves for the holidays. Even if Customs and other agencies can get that merchandise off the docks without a hitch, shutdown-fueled consumer worries over the economy could leave that merchandise sitting on shelves well past Christmas. That would be a severe hit not just for retailers but in every industry whose jobs depend on consumer spending.

Washington cannot keep governing from crisis to crisis and quarter to quarter. Kicking the can down the road may be the norm these days in Washington, but it is an irresponsible approach to the problems confronting our nation.

Rather than more posturing and brinksmanship, we need leadership from both ends of Pennsylvania Avenue on the key issues facing our country, particularly policies that put the economy on a firm footing for long-term growth. For example, we need a comprehensive, revenue-neutral overhaul of the tax code. We need immigration reform. We need trade rules that encourage U.S. exports without taxing imports. We need a sustained focus on jobs and growth, not shutdowns and more uncertainty. Finally, we need a solution to the crushing burden that unchecked entitlement spending will create in future years.

The long-term success of our nation’s economy requires long-term solutions that will take more than a few days to find. But in the short-term, Congress needs to reverse the economic crisis it has created through the shutdown while it is still a short-term crisis and not the beginning of another recession. It is time for Congress to get our government back to work – and time for Congress itself to get back to work on building a strong, stable national economy that will restore the United States to its rightful place as the leader of the global economy.


Matthew R. Shay

President & CEO

National Retail Federation

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