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The Late, Great American Shopper

What's good for Best Buy isn't necessarily good for America.

by
Stephen Green

Bio

March 3, 2014 - 12:02 am
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Gas station sales going up during a period of overall weakness is, I think, the telling detail. Gasoline demand is relatively inelastic, especially during the winter months when Americans don’t usually enjoy many road trips. We’re hunkered down for the cold months, paying down the Christmas bills, and generally doing only as much driving as we need to. Yet despite this season of weak demand, gas prices jumped an average of 17 cents in the last three weeks, an increase of 5%. That looks great for overall retail sales, which reflect the increased costs for filling our tanks. But it means we have less money to spend on the things we want. In other words, weak retail sales were even weaker than they appeared, once you account for the “gas tax” of higher gasoline prices.

This might be a good time to mention that fourth quarter growth last year, previously reported to be a strong 3.2%, was “unexpectedly” revised downward to 2.4%. “Do women know about shrinkage?” They must, when it’s by a third.

So why is Wall Street so happy, setting record after record during what was by most accounts a dismal February? The short version is, Wall Street hates good news and loves bad news. Good news means that Fed Chair Janet Yellen might actually get serious about this taper business and cut off the flow of easy money. Bad news (for you and me) means good news for Wall Street as the funny money keeps propping up their bubble-tastic securities valuations. That money is supposed to trickle down — remember when that was a bad thing? — from Wall Street to Main Street, but Lee Adler says that “it’s not reaching the average American”:

Even with the 1% disproportionately boosting per capita spending; even with foreign shopping tourists invading the US in droves to get bargains at northern border Walmarts or Fifth Avenue and Rodeo Drive shopping districts catering to rich Europeans and Asians, the trend of sales per capita is as flat as a pancake. There’s been almost no growth in the past year. The volume of sales per capita grew by 0.7% over the past 12 months. With the 1% and shopping tourists fattening those numbers, it’s a good bet that most Americans actually bought less stuff this January than they did a year ago.

We’re spending more — being forced to spend more — on health insurance, on light bulbs, on gasoline, on food. That means we have less to spend on the things we might want, like cars, entertainment, travel. Best Buy had to cut to the bone, just to put a little money in the bank — does that feel at all familiar?

There’s a word for people who have to spend more on the things they need and less on the things they want: Hurting.

But rest assured that our endlessly vacationing and golfing president feels our pain.

Just ask him.

(Artwork created using multiple Shutterstock.com images.)

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Stephen Green began blogging at VodkaPundit.com in early 2002, and has served as PJMedia's Denver editor since 2008. He's one of the hosts on PJTV, and one-third of PJTV's Trifecta team with Scott Ott and Bill Whittle. Steve lives with his wife and sons in the hills and woods of Monument, Colorado, where he enjoys the occasional lovely adult beverage.

Comments are closed.

Top Rated Comments   
"Outsourcing is merely a statist term invented to blame capitalism for the problems created by statist intervention that supposedly creates "fairness"."

Yes. First we drive jobs offshore through regulation and taxation and then we condemn the capitalist for greed and "outsourcing". Works well with the dimwitted.
1 year ago
1 year ago Link To Comment
A good and timely post, Steve! Betina, Charles and Branding Iron are correct as well.

I could start a new business, but if I don't have to do so financially why would I? I could expand an existing business, but if I don't have to to meet my needs, why would I? I could add employees, but if I don't need them why would I?

I listened when he said "...at some point you've made enough money." and "...you didn't build that." That was deep insight into the man's thinking and into the future actions of the people in his circle. What I heard when I was listening is that it was a great time to pull back, to not expand and to not feed Leviathan. I was/am not alone.
1 year ago
1 year ago Link To Comment
Either you miss the point or intentionally wander off in a neo - statist direction to distract from the issue accurately described in the piece. Obama and his Alinskyites are dismantling the capitalist system via enlisting cronies who will gladly surrender virtue in the quest to disable others and empower themselves. Meanwhile, real America is forced to endure artificially higher costs in daily consumables while the entire economic system crumbles in reduced activity as a result. Outsourcing is merely a statist term invented to blame capitalism for the problems created by statist intervention that supposedly creates "fairness".
1 year ago
1 year ago Link To Comment
All Comments   (17)
All Comments   (17)
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Consumer spending is 70% of the U.S. economy, and even as we prepare to enter our sixth year of recovery, the American consumer remains tapped out.

I was kind of expecting you to put quotes around the word "recovery"...
1 year ago
1 year ago Link To Comment
There's a song from flyover country explaining this phenomenon.

Josh Grinder and Kelley Mickwee - The Price of a Dream
http://troubadourtx.com/blog/joshgrider-and-kelley-mickwee-of-thetrishasmusic-the-price-of-a-dream-on-rlifermusic/

Consumers can't afford to buy more stuff from Best Buy because they've already used up their available income opportunities, time, and credit trying to keep what they already have. Economic growth will have to come from something else besides more consumer spending.
1 year ago
1 year ago Link To Comment
American production jobs moved overseas.
--> Cheaper products, but no job to pay for them.
Anyone surprised by this causal relationship needs to stand in the unemployment line for a few weeks.
1 year ago
1 year ago Link To Comment
We have truly reverted to the 16th century where the aristocracy governs and destroys the hopes and wealth of the peasants.
1 year ago
1 year ago Link To Comment
Such a shock that Warren Buffet has played ball with the Dems and finds himself with record profits...
1 year ago
1 year ago Link To Comment
You mean the same Warren Buffett that most of us once admired but learned later that he was nothing more than an opportunistic and greedy traitor (not trader) who, apparently, would sell his native country to the highest bidder?

That Warren Buffett?
1 year ago
1 year ago Link To Comment
Left out the part about not paying his taxes.
1 year ago
1 year ago Link To Comment
There is still a market for a shopping experience but it is never going to be what it was.
1 year ago
1 year ago Link To Comment
The internet changed all that. In the case of many items you see in the store, you can find it online for a better price.
1 year ago
1 year ago Link To Comment
A good and timely post, Steve! Betina, Charles and Branding Iron are correct as well.

I could start a new business, but if I don't have to do so financially why would I? I could expand an existing business, but if I don't have to to meet my needs, why would I? I could add employees, but if I don't need them why would I?

I listened when he said "...at some point you've made enough money." and "...you didn't build that." That was deep insight into the man's thinking and into the future actions of the people in his circle. What I heard when I was listening is that it was a great time to pull back, to not expand and to not feed Leviathan. I was/am not alone.
1 year ago
1 year ago Link To Comment
If demographics is destiny then a whole lot of shopping isn't going to take place for a long time. The largest segment of the population is aging and they are "downsizing" - getting rid of stuff. They aren't buying like they used to because they have a lot of "stuff". I see it all the time. And the younger generation has debts galore so they won't be shopping to they drop either. There is a paradigm shift about consumption taking place, the products that will matter and who will be buying them. To cling to what worked and what appealed for so long isn't going to work any more. Plus the type of immigrant we allow to become American will make a difference as well.
1 year ago
1 year ago Link To Comment
Betina, you have expressed what is really happening with a large segment of the population especially with those 50 and over. I am doing the same thing, downsizing, and lots more of us older boomers are doing the same thing. We just simply don't need all the stuff and big houses we have. Hopefully the younger generation can profit by using our used stuff like many of us did back in the 60's and 70's.
1 year ago
1 year ago Link To Comment
People want to work. Investors want something better than 1% on their money. What is preventing workers and investors from joining forces to grow the economy, creating jobs and profits? If you look quarter to quarter some kind of unexpected shock can disrupt the process, but we are more than five years past the shock. This is the Obama economy, paralyzed by regulation, taxes, and growing incentives for not working. The path to profits is manipulating the government. Actions taken and actions that might be taken increase the risks of any business proposition.
1 year ago
1 year ago Link To Comment
Demonstrations in the cities praised Big Brother for raising the chocolate ration to 20 grammes per week.

http://pjmedia.com/eddriscoll/2009/08/31/the-chocolate-rations-been-increased/

Hussein sucks and his Obammunism sucks too.
1 year ago
1 year ago Link To Comment
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