This situation would not last and the car industry would eventually contract as the recession worked its way down the production structure. And so it came to pass. Despite the evidence of an impending recession the malevolent presence of Keynesian thinking still blinds many analysts to economic reality. This view, as I have explained many times before, is just plain nonsense. Consumption does not drive economies nor fuel them.
Entrepreneurs do the driving while savings provide the fuel.
How a fall in the value of assets cuts spending has yet to be convincingly explained. Falling assets values are not a cause of falling expenditure but one of the symptoms of an emerging recession, as is falling spending, especially in manufacturing. It s just that consumer spending is hit last. This fact obscures for a time what is really happening. The result is that economic commentators tell us not to worry because consumer spending is still robust.