Feb 16, 2013

I Got Yer Supply Side Right Here

"Supply Side" actually means that you try to boost demand by lowering the cost of goods and services.  If the price of everything is lower, then people who aren't making much of a decent wage (Low-Enders) can buy what they need, and have a few bucks left over for Christmas and Birthdays etc.  And the people who do make a decent wage (Middlers) can spend at an even higher rate on the Discretionary side.  Pretty cool model, but eventually, you get to a point where you've milked every fractional penny of margin out of the Volume Buying Discount, and then you have to figure out how to keep making it possible for the people your Big Box store has put out of work to go on buying the shit they need.

Wal-Mart is another one of the monsters we've created by swallowing the hog-slop known as Reaganomics.  We're now trapped in almost exactly the kind of downward spiral the Progressives and The New Dealers tried to fix in the first 35 years of the 20th century by building in some safeguards and firestops - and we've been supporting all kinds of bogus ideas in the last 30 years that strip away those safety features.

I'll say it again - I'm a capitalist because God's a capitalist: I have to take in enough calories to build up a surplus so I have the energy to do the work required to get my next meal.  And I'm in favor of regulation because God's in favor of regulation: without a pancreas, I can't regulate my blood sugar, and I die.  Without a hypothalamus, I can't regulate my body temperature, and I die.  Without the lower part my brain stem, I can't regulate my heart rate, and I fucking die.

But, let's get back to Wal-Mart via Business Insider:
Wal-Mart is facing a scary reality: the ailing finances of its core customers, Brian Sozzi, chief equities analyst at NBG Productions, told us.
"Wal-Mart shoppers are the barometer of the U.S. consumer, and these emails reflect common sense about customers," Sozzi told us. "The consumer isn't mentally or physically ready to spend on discretionary inventory and there's no reason to be optimistic."


hat tip = Democratic Underground

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