Sometimes I wonder how it is that media can write about consumer needs while acting as if they are on a completely different planet from politics.
Take today’s story on “Americans not willing to spend without deals,” for example.
Despite signs that the economy is improving, big store chains like Wal-Mart and Kohl’s don’t expect Americans to have much holiday shopping cheer unless they see bold, red signs that offer huge discounts. As a result, shoppers are seeing big sales events earlier and more often than in previous holiday seasons.
Retailers are trying to lure shoppers like Marissa Anwar, who has been doing more bargain hunting compared with last year. … Since the recession began in late 2007, stores have had to offer financially-strapped Americans ever bigger price cuts just to get them into stores. …
There are already signs that retailers are aggressively discounting. Wal-Mart, for instance, on Friday started matching or beating the prices that certain competitors like Best Buy are advertising for some toys and electronics for the day after Thanksgiving — known as Black Friday. Best Buy also plans to match rivals’ prices, even after customers have purchased items. And Target, better known for its whimsical advertising, is touting its prices in holiday TV ads for the first time in at least a decade.
A few lessons are evident here:
Demand curves slope downwards. The higher the price, the less consumers are willing to buy. The higher prices are in general, the less consumers are able to buy, period. So retailers have to cut prices in order to see more buying customers. And that is because …
Stores have to compete for your business. If you as a consumer do business with a retailer, it is by your own choice. You are not forced at the implicit threat of violence and imprisonment if you choose not to shop at Wal-Mart or Target. (The silly leftist war against such shops has been on the basis that the low prices virtually force poor people to shop there, since they tend to look out for their own self-interest. It is offensive to leftists that poor people prefer to see their buying power extended, for whatever reason; they don’t seem to realize that low-priced retailers do far more actual good for the poor than leftist policies that force them into reliance on the strings-attached benevolence of the state — or, given their offense, they do realize it.)
More from the article:
“We continue to see anxiety regarding the economy and the ability to stay within household budgets, particularly among lower and middle-income consumers,” said Kathee Tesija, executive vice president of merchandising for Target, which trimmed its annual profit outlook on Thursday.
In particular, some Americans still are getting used to smaller paychecks because of a 2 percentage point increase in the Social Security payroll tax that started on Jan. 1. That means that take-home pay for a household earning $50,000 a year has been cut by $1,000. That was a concern Wal-Mart noted on Nov. 14 when it lowered its annual profit guidance for the second time in three months. …
Stores also say customers don’t want to spend because they’re uncertain about their health care costs next year due to the U.S. health care overhaul. Additionally, stagnant wages aren’t keeping up with daily living costs. Not to mention, some people are still out of work.
Look who’s raising prices: government. Government doesn’t have to compete for “customers” nor worry about demand curves, because government involves the implicit threat of violence for those who don’t comply.
What we’re seeing this Christmas season, then, is retailers striving even harder to cut prices to compete to make up for the price increases forced on people, especially lower and middle-income consumers, by their government. Thank God for competition.
What we’re not seeing are media siding with the people against the price increasers, because they support the politics of those price increases. Nor are we seeing any actionable concern from the federal government; i.e., cutting its prices, lessening its intrusion into people’s affairs. Media concern over Obamacare tend to focus on whether the glossovertheproblemsquickly will endanger the law itself, not the people forced to comply.
In North Carolina, at least, we have witnessed action by state policymakers to cut government prices and help consumers, understanding that by doing so they were helping the state’s economy overall. We have also witnessed media attack those policies, sometimes quite clownishly. It is almost as if they think the real good in helping consumers save money is so they can “afford” more intrusive government.
