I have started today off with a boom by opining about an Los Angeles Times’ article about why some people do not think that a recession will occur. When food and gas prices exceed the CPI inflationary targets then we will have a recession. Period. Regardless of where you are in the economic strata, if you cannot afford food and clothing then we will have a recession. These things are not luxuries just the basics; and when the essentials outpace inflation then America has a problem! Even though I am unaffected by the sub-prime lending crisis and my income outpaces inflation, you do not need to be a genius to understand that the domino effect is coming.
During the last week of Christmas I walked into the Jimmy Choo store at 6:30pm and no one was there. Though I knew that the store closed at 7pm, the fact that no one was in there did not resonate until earlier this year when the dismal retail numbers were reported. When the upper middle class cannot afford to spend their discretionary income because of higher consumer prices then why denounce a recession? That’s ridiculous!
Finally, I have a problem when all of these analysts, idolizing the rich, make these outlandish statements about a self-contained or regional slowdown. The majority of these reporters cannot afford to buy items out of Bloomingdales, Nordstrom, and Neiman Marcus on sale, let alone at regular price! As an economist, I know a domino effect when I see one because though I can afford these high-end items, I cannot be the only one in the store.
During the last week of Christmas I walked into the Jimmy Choo store at 6:30pm and no one was there. Though I knew that the store closed at 7pm, the fact that no one was in there did not resonate until earlier this year when the dismal retail numbers were reported. When the upper middle class cannot afford to spend their discretionary income because of higher consumer prices then why denounce a recession? That’s ridiculous!
Finally, I have a problem when all of these analysts, idolizing the rich, make these outlandish statements about a self-contained or regional slowdown. The majority of these reporters cannot afford to buy items out of Bloomingdales, Nordstrom, and Neiman Marcus on sale, let alone at regular price! As an economist, I know a domino effect when I see one because though I can afford these high-end items, I cannot be the only one in the store.
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