Dump the house, buy an iPad

As everybody expected, the economy began slowing down in the April-June quarter, with consumer spending looking especially anemic. That's too bad because any hope for a significant rebound relies on everybody's willingness to take out their wallets once again. But it's not as if consumers have stopped spending altogether. They're just doing it differently. Bloomberg Businessweek has an interesting piece about what it calls the schizophrenic consumer. Those are folks who walk away from their mortgage, but then take a fancy vacation. They splurge on an iPad and at the same time buy the cheapest brand of toothpaste and shampoo. Maybe that's why Apple and Family Dollar Stores are both doing so well.

"Last September, retail started to recover on a very narrow basis," says Michael Niemira, chief economist for the International Council of Shopping Centers. "Most of the industry was really weak. It wasn't until the end of the year that you saw any momentum. It was all dollar stores and luxury. You have this bifurcated market. This year, it started to move to the middle a little. Now it's kind of moved back to the edges."

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In such an environment, optimism about the economic future ebbs and flows constantly, with far-reaching consequences for a nation in which consumer spending accounts for 70 percent of the gross national product. It's an economy that suggests an EKG- shaped recovery -- a sequence of mini booms and busts as consumer fads and pent-up demand drive sales, until the impulses fade.