This is the Cato Daily Podcast for Monday, November 24th, 2008.

I'm Caleb Brown.

The Financial Crisis, according to Cato Institute Senior Fellow P. O'Driscoll, might be the

Grinch that stole Christmas. But, he says, instead of trying to appreciate the new

financial world that this crisis will bring in terms of higher savings rates and slower

consumption growth, Congress is trying to use the national credit card to get

consumers to spend evermore. We spoke Friday.

We're a consumption driven economy.

Exumptions traditionally somewhere around two-thirds up to 70% of the economy

and people, ordinary individuals from the working poor all the way up to the formerly

working well off such as Wall Street brokers and traders and analysts have lost their job or

worried about losing their job and they're also indebted and for both reasons

they're deleveraging and for both reasons consumption is going down you can see this in the fact that

the only retailer that's doing well is Walmart which is traditionally a lower

middle class retailer and my wife reports that for a year now she's

noticed that in front of the Walmart she just keeps seeing more and more Lexis and

Mercedes and Cadillacs parks so that formerly high-end

consumers are trading down and people are just cutting back.

So I would say that I think now everybody knows that the financial

crisis is going to be the Grinch that stole Christmas this year. What about

the effect on typically low-wage earners in the United States, particularly immigrants.

Yes, it's, well some immigrants were doing fairly well and that's why some immigrants were some of the people who were enticed into these subprime mortgages and

...