All of the data which sounds good, but isn’t. Non-residential Spending has passed residential Spending. Translation please: The concentration of Retail outlets and Offices are increasing faster than is the concentration of Population; a good Proscription for loss of Profits based solely on the spread of Retail Sales and increased Distribution Costs in a conflicted, Transport Shortage. I know of restaurants out there paying their Overhead Costs, who rely on less than 10 Served meals for their Profitability. A whole range of Small Business will lose their battle with closure, if their daily Sales decrease 10%, and have major competition moving into their Service area. About 7% of curbside businesses are losing Customers due to lack of Parking, and facing a half-dozen new Entrants to the area. Do I make too much of This?–not according to the Small business managers.
Everything which you did not want to hear about the economy can be found here. Business Inventories will not pick up until Retail Sales pick up. Only Economists assume that Business managers will spend on the future, when they cannot meet their current bills. I wish I could find sound data on Business Carry debt, and can only assume that it is on the Rise. It is not a scenario where Managers want to build Inventory stock. It is flat wrong that annualized GDP would have been 4%, if Business had maintained Inventory; GDP might have been pushed up to 2.3%, but is debatable. It is known that Shelf Rent for Product has increased markedly over the Period, the known factor for Inventory Cutback. The Wage spiral is nonexistent at Present, though it will arrive with the increase in professional fees; something which the Fed cannot stop, the Professionals having lost almost all Trade except for the wealthy. Arnold Kling is correct as usual, and We have already killed the Geese who laid the Golden Eggs; it is not their fault that the Eggs turned out to be Iron Pyrite.
Felix Salmon poses the eternal Question: How does GM survive? The Answer states that too many major Players are tied to the Company–millions of Stockholders, dozens of holding financial institutions, thousands of Business fleets composed of GM Products, a Service and Distribution network employing Thousands more, and the forgotten memory of Dinah Shore singing ‘Drive the USA in my Chevrolet’. Americans are unwilling to surrender their fortunes and their nostalgia, in like manner that Putin is unwilling to surrender the old Command methods of Government. The problem comes with the fact that GM is getting as unstable as the old Soviet Union, overburdened with everything except Efficiency. lgl
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