Posts Tagged ‘economics’

Occupy Best Buy?

Posted: November 24, 2011 in Life, Politics
Tags: , , , ,

I found myself driving to Best Buy on the Wednesday before Thanksgiving because my printer had run out of ink, and Best Buy has a regular Wednesday printer ink discount. This in itself is brings up an annoying memory. The last time I had to buy ink was on a Tuesday about a month ago. The under-educated teen at the register was friendly enough, and chirpily informed me of their weekly Wednesday ink specials – but not until after she had already rung up and bagged my purchase. File that under “information I could have used five minutes earlier.”

So in this distracted state of mind I approached the store and found these occupiers camped out on the sidewalk in front. Three thoughts flashed through my mind in a second: a) store display – Best Buy sells camping equipment?  b) the occupy movement hates Best Buy because the evil corporate profits and the quasi-religious holiday pandering is fully embodied in their “Buyer Be Happy” slogan?  c) there are people with nothing better to do than to camp out for two days to save $50 on a crappy made-in-China television set?

I found my ink, went to the registers and asked the cashier (not the same one as before, but her spiritual twin) about the squatters.

Cashier: Find everything?
Me: Yeah, I –
Cashier: Are you a Best Buy Rewards member?
Me: No. Did you –
Cashier: Would you like to become one?
Me: Uh, no. Are those kids out front waiting for Black Friday?
Cashier: (nods amicably)
Me: Is there anything in the store on Friday that isn’t here already?
Cashier: (shakes head amicably)
Me: So, why are they out there, exactly?
Cashier: (shrugs amicably and hands me my bag)
Me: Thanks. Enjoy your Thanksgiving weekend.
Cashier: ‘K. Bye!

I have had more stimulating conversations with store clerks than that (I’ve had more stimulating conversations with my cat, now that I think about it).  But I knew that she was an intellectual giant compared to the concrete campers out front. That’s a given if they were actually “occupiers”, but even if they were shoppers it becomes quickly apparent. Being a cashier, she can presumably do this sixth grade math (and I’ll be very generous with the numbers in this example): $150 savings divided by 30 hours equals $5/hour.

So I have the same question for them whether they are there to “occupy” or for Black Friday: Isn’t there anything more useful (or as some would say, profitable) you could be doing with yourself?

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This quote is from a 9/25/10 AP story on the GOP “Pledge to America”, PBO’s predictable response and the philosophical differences between the Dems and the Repubs:

“Perhaps the biggest difference was on taxes, where Republicans want to extend all of George W. Bush’s income tax cuts permanently — at a cost of some $4 trillion over 10 years.”

“Cost.” Says who? Keeping taxes where they are will cost $4 trillion? Partisan bull.

There is an element of our population that does not understand the simple economics of this discussion, but I hope most Americans get it. The left does – at least those who don’t have their heads so far up their ideology that they can’t hear the howls of outrage of the electorate. The rest of them will stick their fingers in their ears and remain willfully ignorant when this is explained because they know it undoes their agenda.

Imagine a produce stand. It makes enough in sales that Farmer Brown can support his family. His wife gets the idea that she’d like to add a swimming pool to the old homestead, so she convinces him to raise his prices – tomatoes, for example, are now $15 each. He is surprised to find that his sales have dropped off to nearly nothing, even though he’s the only produce stand for miles around. In one week, he sold only 2 tomatoes, so he’s made $30 on his tomato sales. He’s experiencing a seriously sluggish micro-economy, and now he can barely afford to keep the lights on at the farm.

He wants to lower the price of his tomatoes from $15 each to $1 each. Still outrageous, but not as hopelessly overpriced. Based on last week’s sales figures, his wife calculates that when they sell the 2 tomatoes this week that his low price plan will “cost” them $28 in lost revenue.

But an amazing thing happens – sales go up, and he sells 50 tomatoes (still a far cry from the glory days, but an improvement nonetheless). He can now happily put $50 toward his electric bill and keep the lights on. His sales went up $20 in just one week. But his angry wife points out that if he’d left the price alone like she wanted, they’d have made $750 on those 50 tomatoes! She’s so preoccupied about the $700 he “let get away” that she can’t get her brain around the simple cause-and-effect scenario – that lowering the price caused the higher sales, and that charging too much chased the sales away. Her $750 sales day could never have happened.

Will lowering taxes (prices) cost the government (farmer) $4 trillion ($750)? Or will it generate more income, like it has in every credible example ever recorded?

Watch out for AP statistics that use “static accounting”, which is a fancy way of saying that they assume a change in one variable will not trigger change in anything else. A change in price will affect sales at the produce stand, and a change in our tax rates (or even uncertainty in future tax rates) will affect our GDP.

The real question is whether the “Tax! Tax! Tax!” ideologues will give up on this failed and faulty path we’re on before the bank forecloses on the farm.