This article is quite interesting. It talks about the economic effects of the Black Friday shopping event. They note that during this period in the shopping year about 1/5th of all revenue is made, that’s just in four weeks. They say an alien to America would describe the economy as, people living frugally for 11 months of the year but then going crazy buying things that they don’t need.
This unnecessary spending is however very useful to the economy. It stimulates the consumption, spending of billions of dollars that otherwise were not spent. The writer even goes on to describe the event as a “one-day economic-stimulus plan and job-creation program”. This causes the suggestion of trying to extend this effect for more than just say a week. Give the article a read the writer goes more into detail about this idea.
Imagine, Black Friday as an economic relief source.
I like the article's discussion of inflation. It seems like an obvious choice, yet its a bitter pill to swallow. How does one go about convincing the public that making their dollars worth less would actually likely be better for them in the future? Luckily (or unluckily, depending on how you view the Fed), the public doesn't have much of a say in the matter of inflationary policy; that's the Fed's domain.
ReplyDeleteThe Occupy Wall Street movement has proclaimed Black Friday as a "Day of Action," and are calling on Americans to spend nothing on this day. This article shows how detrimental this could be to American retailers and businesses. As much as Black Friday supports corporate greed, it sustains jobs and industry in the economy.
ReplyDeleteI think it is interesting, but it makes sense, that some stores wait all year for the holiday season to make profits. Hopefully, the increase in spending that happens during the holidays can be maintained after the season, but usually it is not. This is why the article points to inflation to help the economy. Inflation is a logical choice but will definitely cause the FED to be criticized by those who don't understand how it can be a positive thing for the economy.
ReplyDeleteI wonder how much the average American know about inflation and what it does to the value of the money they hold. I feel if consumers are more aware that their money depreciates with inflation, they would be more likely to smooth their consumption over the entire year instead of spending most of it on things they don't need during the holiday season.
ReplyDeleteThis is certainly a riveting article in that it talks about a kind of magical tool that we can use to reboot the economy! It makes sense that four weeks are enough to make us see the end of the tunnel in that it boosts consumption, which is what the government has been trying to do. But I wonder, what would happen after four weeks, as sudden surges and falls are never really a good sign!
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