November 18, 2003

Be Careful

What everyone wanted for the new-new economy was a solid base of low taxes, low inflation, low interest rates, high productivity, and globalized trade. Well, here it is: The You-Asked-For-It Economy. Sure, goods are cheaper thanks to more efficient processes and cheap overseas labor, but that's not helpful to the people who can't pay when they can't find jobs and companies who can't show growth when they have no pricing power. Say what you will about WalMart's business practices, but they know their customers' spending habits:

He said the holiday season would be "better than the last" but said customers continued to buy the lowest-priced items, a sign that household budgets remain tight.

Scott also said many customers were waiting for mid-month paychecks to arrive before shopping, which he called an indication of consumers' "liquidity issues."

What a CFO calls a "liquidity issue" most of us would call "flat broke." Hard to imagine anyone enjoying life living paycheck-to-paycheck buying the cheapest crap they sell at WalMart.

So where's all that cheap stuff coming from? Elsewhere, mostly.

America's trade deficit with China reached a record $12.7 billion in September as imports totaled $14.8 billion, an all-time monthly high.

You do the math there. Not that I have anything against cheaper stuff, but it's getting almost ridiculous. Wandered into WalMart and saw a hand-mixer for $6.99. Six dollars and ninety-nine cents! Sure, the motor is probably a wimpy piece-of-crap, and I'm not sure exactly what I'd do with a hand-mixer anyway. I thought about it for a second, though. I mean, for $6.99 it's almost worth it just to make fresh whipped cream. And let's not get started about how it might be cheaper to just buy a new air purifier instead of finding a filter for the old one.

Also along the You-Asked-For-It line, Arnold starts his new job today, Congress gets ready to stick the Energy Bill up the collective rectum of the citizenry, just as they dangle the carrot of Medicare drug coverage. Because we're all for smaller government.

Posted by mikewang on 08:21 PM