Thursday, November 15, 2012

Market Failures

We'll see another one a week from today.  It's no longer Black Friday.  It's Grey Thursday.  People used to take Thanksgiving Day and spend it with family.  Last year though some retailers decided to start late Thursday.  Others didn't want to do that to their employees.  They suffered financially.  So now there's a push to go even earlier.  Wal-Mart's "Black Friday" sale starts Thursday at 8 pm.  It's similar for others.

It's kind of like watching a movie in a crowded theater and one person stands up.  He has a great view, but others are now compelled to stand.  Then of course others until the whole room is filled with standing people all now with a view that is no better than what it was when they were seated, and yet now they must exert the effort to stand.  If a rule was created that said "Black Friday starts on Friday at 8 am" then all the employees could spend all of Thanksgiving with their families, the companies wouldn't be deprived of sales, and shoppers likewise wouldn't feel compelled to leave their families on Thursday night in an effort to score that deal.  They will have just as good a chance on Friday at 8 am.  Everybody wins.

Going down that road is an admission that the market really isn't so great at working out a lot of things, and it's tough for some people to concede that.

45 comments:

Chad said...

For many it's a chance to earn extra money - thanksgiving can be celebrated on Saturday. My nephew (God Bless his Conservative Soul) loves holidays, while everyone whines and moans he works - volunteering for every shift possible. He rakes it in while others (including me) will be drinking and eating until I can't no more.

He's going to be a great business owner one day.

For me, not interested in standing in line at 5 am, but Cyber deals are great and that is my gig. I pay just a small premium to get the same goods without leaving the comforts of my chair. This year I got my eye on a 3D TV and surround sound unit, a gun safe (eye scan unlock able - very cool) and a set of outdoor heaters for the front porch.

It all depends how you look at it I guess.

Jon said...

If your nephew could simply work Friday and make the same amount of money, wouldn't that be better? Then he could stay with his family all day Thursday.

The reason he can't is kind of like the reason you would have to stand up in a crowded theater if the person in front of you stood. You're praising your nephew's effort of standing, but you aren't looking at the bigger picture. If everyone would just sit then they could enjoy the view without the effort. Isn't that better?

Requires a little cooperation though instead of this rugged individualism conservatives like to talk about. Perhaps that makes it hard for you to accept.

Chad said...

It does - no sense in lying, individualism and success is something I (most conservatives) do value quite a bit. I will be doing some work on Thanksgiving and will back to nearly a full day on Friday. Its like sports man - if your taking the day off your competition might be running some extra wind sprints which might be the difference between a W and an L the next game.

For my Nephew and we've talked about this - Thanksgiving is kind of a Hallmark Holiday. He sees his parents a lot already and he would rather take the opportunity to make more money to pay for school and to get a jump on his competition. He is going to work 32 hours between Thursday and Friday @ 2 different jobs. He gets his regular pay and he made some side deals to take other shifts with people who want to sit at home - in 2 days he is going to make 2 weeks pay plus.

The meaning has been lost over the years and now for most American's it is simply a day or two days to screw off, spend money, eat like a pig and drink until you pass out.

In the old days when there wasn't TV/Cell phones and all this tech - whole families got together because they hadn't spoke to one another for a long time now we are connected nearly all the time. I talked to my pops 3 times today, he talks to his grand kids by way of Skype whenever he wants to or when we can which is like 2-3 times a week. My 3 year old knows what button to hit to call grandma/grandpa on the TV. He and my mom see my kids who live 3 hours away more than they see the grand child they have that lives 6 miles away so they don't have to spend money they don't have to come down just for Turkey day. Although we will hook up with them by Skype of course - heck Jon me and pops play golf on-line just about every weekend together. We spend more time together now than ever and we live hours apart.

This is a 24/7 world brother - it just is.

Jon said...

So for you standing in the crowded theater is a good idea. Winners, hard workers, rugged individuals. That sort of thing. People that think we should cooperate, maybe think about how the elderly here will have a hard time, those are just lazy people.

Chad said...

Essentially yes, but with a twist. With the victors comes the spoils so maybe we pit the elderly in the front of the theater and stand behind them?

4tomic said...

I think I have to agree with both of you, if that's even possible.

Jon's crowded theatre metaphor is dead-on. And it is stupid to start Black Friday on Thursday.

But Chad's nephew is also dead-on. Go out there and make that time-and-a-half. But also I don't care on personal grounds, I do all my Christmas shopping last minute and I don't work at Walmart. As for the poor people who work at Walmart, the more that the man steps on them, the quicker they'll come to realize "they are legion and they are many" and they actually do have a voice in how their corporation runs itself. (Or at least they COULD have a voice if they organized).



Finally, this brings me to another bonus about living in Canada and dating a Canadian girl. Canadian Thanksgiving is in early October. At first this put me off a bit, because it felt unorthodox, but then I realized that it means I could have Thanksgiving twice a year! Once with my family, once with hers!

So my solution is that the U.S. also adopts Canadian Thanksgiving in addition to its own. Then there will be two days we can celebrate and Walmart can split their staff to work one or the other. Problem solved!

4tomic said...

Sorry... I should correct, "Problem solved for everyone but the Turkeys".

HispanicPundit said...

The crowd analogy is horrible. Crowd standing is a zero sum game. Working on a holiday, with all the extra pay that comes with it, is a positive sum game.

Jonathan said...

HP,

I agree with your view on the theater analogy as well. It also ignores the positive benefits of reaping benefits from hard work vs. deciding to just sit down and not reap the rewards.

And Jon, I know what you're going to say - businesses make things harder and are less efficient, abusive, etc. etc, the individual worker works more today and earns less. In your view, the negatives far outweigh the positives.

All I am saying is that your theater analogy is very telling of the shortcoming in your marketplace philosophy viewpoint as well.

I believe in your view, if everyone could but the minimum amount of effort and get the same return of money/benefit this would the optimum situation.

Someone who has an entrepreneurial mindset like myself, and to a degree also the right winger/capitalist etc. would say that the optimum situation is that there is an inherent benefit to having a minimum threshold of effort or work *required* to achieve a sustainable and living wage, and the ability to work harder and achieve even more.

You seem to jump from one pole to the other, either a race to the bottom situation where the poor worker must work harder and harder to make it by, or the situation where the amount of effort is minimized. Or at least I do not recall many/any references where the intrinsic value of working hard to “get ahead” seems to be a virtue in your system. Is this accurate?

Someone who has an entrepreneurial mindset like myself, and to a degree also the right winger/capitalist etc. would say that the optimum situation is that there is an inherent benefit to having a minimum threshold of effort or work *required* to achieve a sustainable and living wage, and the ability to work harder and achieve even more.

You seem to jump from one pole to the other, either seeing a race to the bottom situation where the poor worker must work harder and harder to make it by, or the situation where the amount of effort is minimized. Or at least I do not recall many/any references where the intrinsic value of working hard to “get ahead” seems to be a virtue in your system.

Do you see any benefit or potential benefit outside of financial gain to a store owner who, all things being equal, decided to work on Thanksgiving day to make more money as opposed to being closed and making the same amount of money they normally would?

HispanicPundit said...

Jonathan wrote, All I am saying is that your theater analogy is very telling of the shortcoming in your marketplace philosophy viewpoint as well.

Been arguing this point for a while.

Chad said...

Jon chooses to regulate - everything if at all possible, I see this differently and as an opportunity which some companis are taking. Have your Black Friday on Tuesday and capture the rush - maybe you can (as an owner) reap enough of a benefit on Tuesday by stepping out of the norm you can close on Thursday/Thanksgiving.

Jonathan said...

Sorry my previous post is somewhat redundant and confusing. I was going off 3 hours of sleep and a red eye flight so I wasn't quite 100% yesterday. :-)

Jon said...

You have to understand that when I make an argument it's naturally going to start from my own assumptions. Sometimes those are assumptions you don't share. That's fine, I'm not unaware of that, but I still express myself from my own perspective.

But notice what you do, HP. You make an argument that starts from your assumption. Increasing working hours, increasing GDP is a good thing, and you are trying to get through to me but I just won't listen. If you have read what I've written about how I think we need to work less, not more, and consume less, not more, you wouldn't make an argument that starts from an assumption you know I reject. But since you are not at all good with reading comprehension in my opinion you are constantly incredulous that I'm not getting your arguments and you are not getting through to me. You don't consider that you are the one that is having difficulty getting into my head and understanding where I'm coming from. The fact that you expect me to accept arguments that start from assumptions I reject I think is the real explanation for why we continue to go around and around.

Here's what could increase GDP. Let's eliminate holidays and weekends. These are basically more union victories. Things that exist less in the non-union third world, a world Republicans think we should copy. From my perspective (a pespective you don't share) the costs associated with this are large. More consumption, more environmental destruction, families separated at 7 pm on Thanksgiving (earlier next year?). These costs are called externalities and since these don't factor into GDP you act like they don't exist. It's like you are completely unaware of them. They don't fall particularly hard on Wal-Mart stock holders. They don't have to go in on Thursday and they get more profits, so naturally they like this. Maybe Chad's nephew likes it. But a lot of people that have no choice (except the choice to basically quit, which is not a real choice) really want to stay home. But they can't now. They pay the price and they are compensated some so the stock holders can make more.

So for me my analogy isn't perfect either. We all stand. And we have a worse view. In any case it's a market failure.

Jonathan said...

Jon,

I hear what you’re saying – your starting point is that the worker has no choice but to work extra to start ahead, others starting point is that it’s the small business owner who voluntarily works extra to do more than just tread water. I think we’d all agree that having to work more to stay at the same level is less desirable than to work less to do the same.

However, what I’m unclear on is your view on a situation such as the one below: (I realize based on your starting assumption you don’t see this as the typical situation, whereas someone like myself would see it more this way, but putting that aside for the moment)

Worker A and B make enough to provide for their family, but don’t have any extra at the end of the month. Worker A chooses to work extra (i.e. Thanksgiving), cut back on consumption, and saves up a nest egg for unforeseen circumstances. Worker B chooses to work the normal amount of hours, keeps their lifestyle the same regardless. The next year, due to no fault of their own, worker A and B both incur an unexpected $15,000 expense. Worker B is now forced to work extra just to make ends meet, while worker A had saved up and does not have to work extra.

Given this scenario, and again, I’m not saying this is the reflective of the normal US working situation (we’d differ on this), would you see it as “better” for worker B if they were alleviated from having to work extra through some sort of external circumstance (i.e. either because of say an unexpected pay raise, someone gave them $15,000, debt forgiveness, etc.) or "better" that they have to work through the situation themselves? Or to put it another way, if you had the ability to allow for worker B to not have to work extra to pay off the unexpected expense that impacted no one else in a negative way, would you do so?

Jon said...

Jonathan, let me make sure I understand you right. Worker A has worked harder than worker B so when he has an unexpected $15K expense he can deal with it. Now that worker B is subject to that expense he's struggling. If I had it in my power to help worker B would I do it?

Is this right? It reminds me of Jesus' parable of the laborers in the vineyard. The owner pays the same wages whether the laborer came early or late, and some are unhappy. But the owner replies to those that complain "Hey, we agreed to a wage. What is it to you if I am more generous with others? Take your wages and be happy. Don't be concerned that others got a good deal." So I guess I'd say why not help worker B if I could. It's not like I'm treating worker A unfairly by helping worker B.

HispanicPundit said...

Actually, I am not making a GDP argument (though yes, it would have spill over effects there too). I am making an argument from the workers perspective.

Try to separate yourself from your limousine liberal lifestyle. Assume for a moment that you had a life where extra hours of work was a serious blessing. It meant a better standard of living for your family. Maybe that translates to more food on the table. Or more clothes. Or more money for healthcare. Or more money for tuition. Or just a less stressful week. I know it's difficult, but try to strain your imagination and imagine of such a family. There are people like this, trust me. People who would like more money, for whatever the reason.

In such situations, more available hours of work is a blessing. This is what I mean by " with all the extra pay that comes with it" (but I am the one with reading comprehension? Go figure), the extra pay, the higher income - matters. Just because it doesn't matter 'from your own assumptions', doesn't mean it doesn't matter to everyone else. It does. And these people have to be weighed into the equation.

And of course, this is positive sum as more people building/selling more 'gadgets' - means there will be more gadgets. A standard of living increase for all of us.

Jon said...

Your claim is that by opening early more working hours are available. But the amount of working hours depends on the amount of sales made. More sales, more working hours, less sales, less working hours. If they open early but in total the sales level is not affected over the period from Thanksgiving to Christmas then there aren't more working hours anyway. At least as a close approximation if not precisely.

So if you aren't saying GDP and consumption are going up then I think my theater analogy is fair as a close approximation. The total available working hours are pretty much the same in both cases. Workers aren't making any more money in total but now they can't spend Thanksgiving with their families. Now you have no basis for criticizing my analogy. However if your argument is that sales levels increase because they are open longer then your argument is based on ever expanding consumption, something I don't think should be an end goal.

Lack of time with family, environmental destruction, these are also costs that you don't address. Is it still positive sum after these are considered?

Chad said...

HP's got a good point there.

With more store hours does come more opportunity to work thus more opportunity to earn.

I am also confused about why Turkey Day has to be celebrated on Turkey Day? Make the cash and celerate on another day - it won't lose meaning. Tape Macy's Parade, hit the play button on Tuesday (or whatever open day you have) pop the Turkey in the oven and celebrate.

Chad said...

JC - Isn't part of the reason for the Black Friday sales to blow out 2012 inventories (Old Models) as well to make room for the new shiny stuff?

Also - doesn't these sales days hold a tremendous value to pay/offset the remainder of the year? Walmart hires/staffs more people during the slower weeks knowing that they can offset those costs during T-Day and X-Mas - right? No stats cause I have none, but I thought that these sales days make up a big number of annual sales. Am I missing something?

Jon said...

Of course Black Friday sales make up a large portion of sales. I'm not disputing that. I'm saying if you can get the same effect (just open on Friday instead of ruining people's holiday) why not do that? The market is not allowing it. Once one company goes the others must follow suit or they miss out on sales.

It's similar to what I understand happened with tobacco companies. They used to advertise at sporting events. Big money was spent. The government banned it for health reasons. The result was that tobacco became more profitable. They all stopped advertising and so they saved the cost, but the sales weren't affected. What happened was once one company started advertising others had to do the same or they would lose market share. You couldn't sit on the sidelines or your customers would be stolen. However once the advertising all ended you could sit on the sidelines, spend zero advertising dollars, and your customers were no longer being stolen away. Basically there was a fixed set of customers and all the advertising did was shuffle them from one brand to another. The net effect of the advertising was zero. So the government regulation helped them. I think the same is true here, though the benefit is not measured in terms of GDP. It's quality family time, which is still something of value.

Jon said...

HP, let me say that I do see your point that if we do have more working hours available this does help the people that need those hours. My assumption when I made this post, which I think is close if not exact, is that people generally know how much they intend to spend through the holidays so the overall spending won't change, and so the overall amount of hours available doesn't really change either. If that assumption is not correct, and it is possible that it is not, then it isn't really a market failure in the way I described it.

Chad said...

Ahhh - the Tabacco companies profits went up, but what happened to the advertising industry as a result? With regulation you just took billions out of another industry instantly.

You just puff'd your chest out about the fact that billions just got taken out of another industry by gov't hand.

Good intentions, bad results.

Chad said...

Again there is no law (that I know of) that you can not have your Black Friday sale on November 1st? I think we are seeing the net result now - lowered prices (maybe not bottom basement prices) being offered the week leading up to Black Friday.

A person can only be in 1 place at 1 time - if I want the 60" 3D TV, but also would like something else from another store I have to choose one or the other. By staggering the start times they are betting that they will get more traffic - its smart.

HispanicPundit said...

Jon writes, But the amount of working hours depends on the amount of sales made. More sales, more working hours, less sales, less working hours.

I don't get you Jon. Please elaborate. This seems to be the core basis of our disagreement, so we need to understand it fully.

Keep this in mind: First, no matter what the long term is, in the short term, this leads to more working hours. Can we atleast agree on that? So already, on a short term basis, it's a plus for the employees - atleast those who care more about making money.

Second, I don't know how you could assume that this wouldn't result in more sales to Wal-Mart.

Why do I say this? Well, first of all, why would Wal-Mart be doing this if they didn't think it would result in more sales? Certainly they must think so, and they are in a better position to judge than either of us. Then there is the fact that this is the BIGGEST sale of the year. Historically, people have died because the rush of shoppers is so large and the amount of time for the sell is so short. Historically, people camp out in front of these stores - yes, during Thanksgiving, making absolutely no money at all - just to get a small piece of the pie. Given such a situation, why would you assume net sales would be flat?

In fact, you can make an argument that extending the black friday sales might result in more people spending Thanksgiving with family. The sale goes on longer, and there is less need to camp out in front to take advantage of the sales.

Lastly, I dont care how you see it, you can't compare a net zero sum event with a net positive sum event. The two are FUNDAMENTALLY different.

HispanicPundit said...

Jon,

I posted my comment before I saw your second comment. Let me address that now.

You wrote: My assumption when I made this post, which I think is close if not exact, is that people generally know how much they intend to spend through the holidays so the overall spending won't change, and so the overall amount of hours available doesn't really change either.

This is not true. Many people (myself included) don't shop during black friday because of the crowds. Just too many people. Not worth the savings. Extend the hours of black friday, and you get less crowds. Less crowds will attract many people who otherwise would not go. Like myself.

Chad said...

I am with HP on this one Jon, I don't see the wealthy standing in lines to save a couple bucks. From the media broadcasts I see - well I will keep my opinions tucked away, but it appears that they may be buying up a couple levels.

Jonathan said...

Jon,

Yes, you read my scenario correctly. I also see we’re in agreement that being generous is a good thing, and someone should not be angry that a fellow worker is the benefactor of an employer’s generosity. Today in our society, this would probably result in a lawsuit or complaint by the union. But I’m actually trying to drive to something a bit different. Let’s slightly change the scenario.

Suppose two fathers (father A and B of course) had worker “B” as sons. Father A tells his son “son, you’re going through a tough patch and your mother and I want to help you out. No need for you to have to spend time away from your family and work even more than you already do, here’s $15k.

Father B tells his son “sorry you’re going through a tough patch, but I know you can make it through. No point in dwelling on the past, but hopefully you’ll save a bit more in the future and spend less so you don’t have to be away from your family as much”.

In your estimation, would you think that the son that worked through paying off the $15k would end up being more likely, less likely, or have the same likelihood of experiencing financial difficulties again as compared to the other son?

Jon said...

You don't shop during Black Friday, but you do shop some time between Thanksgiving and Christmas. That's what I'm saying. Total expenditures are going to be the same and the number of hours required is proportional to the amount of sales. Not exactly probably, but close.

Wal-Mart doesn't necessarily think more sales will occur overall. What they realize, correctly, is that if they go early they will get a larger portion of the total sales that are made, not that more sales OVERALL will occur. Some people have a Christmas budget and they spend it all on Black Friday. Once it is spent it is gone and if you weren't open at the time it was being spent you miss out. This is what happened to JC Penney last year. They decided they would not do this to their employees. They suffered for it. Not that TOTAL sales were down. It's just that a large portion of sales happen on Black Friday and if you aren't open at that time you don't get them. Now of course it's spilling into Gray Thursday. If you aren't open at that time you don't get them, but total sales overall from Thanksgiving to Christmas may not be affected.

Like I said, I agree with you that it's not zero sum if it turns out more sales OVERALL between Thanksgiving and Christmas occur. I think what's happening though, and I think the article I linked to discusses this, is that retailers just want to get a larger share of those initial purchases by people that blow through their whole Christmas budget as soon as the stores open for Black Friday. If they all agreed to just push the date back the overall expenditures wouldn't change and employees wouldn't have to suffer. What we have here is a case where the winners are the ones most cruel towards their employees. If a store opens at 8 am on Thursday they will probably do best. Next year we will move further in that direction. This is a market failure.

Chad said...

How is a market failure again? I am missing something.

Jon said...

Jonathan, why do I get the feeling you are leading me down some path that is going to have me ending up looking stupid?

Anyway, I suppose the person with the father that bailed him out is more likely to be unprepared in the future. But let me tell you what he also may do. He may be more gracious to others. He may end up being a better person, knowing that not everybody is perfect, so forgiveness and grace are virtues.

Back in my right wing days I had a relative that was like this. She had too much credit card debt, made a lot of poor decisions. Her Dad bailed her out, and like a good, cold hearted right winger I was critical. But here we are years later. She has made poor financial decisions subsequently. But here's what else. She's a great person. Not stingy. Very sharing. Very giving. OK, maybe she shouldn't be given her financial situation, but she is just plain good.

I also know some people that are exactly the opposite. They punish their kids financially in a sense. I'm not going to get into the details, but they are committed to making sure their kids make wise financial decisions. It's worked. The most stingy, selfish, unforgiving kids you'd ever meet. So far it looks like they will have money in their adulthoods, but at what price?

You know what's interesting to me? The more I think about Jesus the more I recognize that in my former days as a Christian I really wasn't following him. He had nothing and that was good enough. He taught forgiveness and grace. I embrace that more today than I ever did.

Jon said...

Chad, in the market we have effort exerted for no net benefit (again, assuming I'm correct that total expenditures are unchanged).

It's just like smoking. They exert the effort making the advertising. On net it did no good. It was effort wasted. You can say that it was good because it was money in the pockets of the advertising agencies, but by that logic we should stick with typewriters instead of computers because now typists are deprived of money they would otherwise make. If a company employed people to just dig ditches and re-fill them this would be good because these people now have salaries and otherwise they wouldn't. I assume you think that is waste and not ideal.

HispanicPundit said...

Jon,

I think I get you more now. I see your point. I still disagree with it, but it's not unreasonable. Thanks for clarifying!

With that said, the part I disagree with is this: ...but you do shop some time between Thanksgiving and Christmas. That's what I'm saying. Total expenditures are going to be the same and the number of hours required is proportional to the amount of sales. Not exactly probably, but close.

Remember, by including more people in the black friday sales (because of lesser crowds), you are including more people in a sales event that sells products at lower prices. Which means MORE products will be bought. Which results in more sales.

Think about it this way: I am an AVID credit card rewards person. I try to maximize my credit card rewards. But because I know I am getting 5% back at select merchants, I have urges to spend more. Much more than that 5% savings. On net, rewards often leads me to spend more $$ than I save.

That's how lower prices work. They will drive people to spend MORE.

HispanicPundit said...

Btw, I dont want you to think that I am blindly in favor of this. I do believe there is SOME level of the "collective action problem" at play here. Probably not as much as you, but certainly SOME.

So go ahead, ask me: HP, what would YOU do? Glad you asked! If I was king of the world, I would support economist Robert Frank's idea here.

Specifically, this part: "an across-the-board 6 percent national sales tax (on top of any existing state and local sales taxes) in effect from 6 p.m. on Thanksgiving to 6 a.m. on Black Friday.

This plan would leave both stores and consumers free to decide for themselves whether middle-of-the-night shopping is worth it. Even if some retailers decided to stick with the early openings and even if some shoppers showed up, the country would reap a significant benefit. As every mature adult realizes, we have to tax something, and the revenue from my 6-6-6 plan would make it possible to reduce taxes on other activities that are actually useful. Best of all, it would encourage Americans to spend Thanksgiving night where they really want to - in bed."


Keep in mind though that I only support this because of the employees perspective, many of whom will be forced to work Thanksgiving afternoon because of such "collective action problems". For an alternate view, see here.

Chad said...

JC - That is no where near the same. Gov't decided to end something that would otherwise continue leaving a hole. Typewriters where replaced with a new product/service. The market share moved to a new product and not by force.

Not the same at all.

Same on this topic, before you went off roading. There are no outside market forces only market choices. If Biz A decides to open 24 hrs to sell product and Biz B shuts down to have turkey that is not a market failure.

Examinator said...

HP,
There are few problems with your assertion.
First... There will always be the late shopper 'oh god, Aunt Boris has sent us a present and we forgot her' and human nature. it is demonstrable fact that crowds generate bigger sales over all. Ergo in marketing terms the idea of Dirty brown Wednesday, grey Thusday, black Friday or purple with pink spots Saturday is to create more Crowds...interest, excitement to stimulate the emotion to buy now...or miss out.
Interestingly in Aust the biggest single sales day turnover is "national exchange day" (aka Boxing day Sales(hmm?)).
BTW in big retail stores the myth is that their profit comes from the cash register..... it doesn't it's the cash flow and what they DO WITH THAT.

The second is the dual self ass biting devils of the consumerist on steroids from Cassandra's Box. i.e. What is being bought (where is it being made...jobs).
Then who is funding the consumer DEBT.

In short what is happening is the US is borrowing consumer debt from the manufacturing country.

What both you and Chad are looking at is myopic focused. It helps specific retailers etc. with market SHARE of the Pie but it doesn't build NATIONAL Wealth...it doesn't help the current account, to do that you need a balanced economy.

See the real Capitalism as writ by it's inventor the real Adam Smith.
Not the fictional one and his faux Capitalism.

It is demonstrably fictional to assert that more part time retail jobs compensates for loss of full time jobs.
Both you and Chad are confusing sales with profit and marketing with Economics.



Jon said...

HP, there's reason to think that Black Friday actually is not the best time to buy in terms of prices. See here:

http://online.wsj.com/article/SB10000872396390443615804578042700772445448.html

Not that this changes your point because sales could increase regardless of the price because of effective marketing, so I still grant you COULD BE right that sales are higher because they extend the Christmas shopping season by a few hours. So I'm not saying your wrong, just adding some food for thought.

If you're right then I still would object and call it a market failure for other reasons, but you would be right that my reasons here (it's zero sum) would not be valid.

Jonathan said...

Jon,

Thanks for indulging in my question. No, it’s actually not a loaded question or a trick, – I’m just trying to drill down to your underlying assumptions and understand where you’re coming from instead of just going back and forth endlessly on liberal vs conservative economic arguments.

Jon wrote:
Anyway, I suppose the person with the father that bailed him out is more likely to be unprepared in the future. But let me tell you what he also may do. He may be more gracious to others. He may end up being a better person, knowing that not everybody is perfect, so forgiveness and grace are virtues.
--
I think it would be great if this were to happen. Do you think they would be more or less likely to be gracious and thankful if one day they got a $15,000 bill in the mail unexpectedly, and then the next they got a $15,000 check, or if they had a month in between where they were trying to figure out how they would come up with the money and had to take a hard look about what they might need to do to pay it off?

Dietrich Bonheoffer talks about this with this ideas of Cheap vs. Costly grace. He was a pacifist German who fought against the Nazis and was big into social reform as well, and I’m guessing you might already be familiar with his work, but if not, I think you’d really like this book about his life, or his writings in general: http://tinyurl.com/a5m72on

He talked about the situation where all our problems are simply swept under the rug, the consequences are short circuited. It does no good for someone to be forgiven if they do no change their ways, and most times in order for us to get to that point, we have to undergo some measure of consequences for our action before we really decide to change. I know that’s how it works for me.

The problem I see with our society is that to the extent we short circuit the natural outworkings of the problems we have (i.e. digging ourselves deeply into debt, and then erasing the debt) it both fosters a sense of thanklessness and entitlement, and also prevents us from learning and growing as a person. The real travesty here is not that it’s unfair that worker A had to struggle and work through debt and worker B did not, it’s that person B was not given the opportunity to grow and become thankful and more mature as a person going through the process.

Jon wrote:
Back in my right wing days I had a relative that was like this. She had too much credit card debt, made a lot of poor decisions. Her Dad bailed her out, and like a good, cold hearted right winger I was critical. But here we are years later. She has made poor financial decisions subsequently. But here's what else. She's a great person. Not stingy. Very sharing. Very giving. OK, maybe she shouldn't be given her financial situation, but she is just plain good.

I also know some people that are exactly the opposite. They punish their kids financially in a sense. I'm not going to get into the details, but they are committed to making sure their kids make wise financial decisions. It's worked. The most stingy, selfish, unforgiving kids you'd ever meet. So far it looks like they will have money in their adulthoods, but at what price?

You know what's interesting to me? The more I think about Jesus the more I recognize that in my former days as a Christian I really wasn't following him. He had nothing and that was good enough. He taught forgiveness and grace. I embrace that more today than I ever did.
--

You do bring up a good point – one common trap is to look at those struggling financially and get mad at them and judge them, and be arrogant that they are not as “responsible” as you when we never walked a mile in their shoes.

You can indeed go too far on the other way and be punitive and judgmental in your desire to force people to pay for their actions or situation.

Examinator said...

Jon,
I think you're right from the wider NATIONAL or for that matter international perspective.

Chad
I would warn all work-a-holics or people who put off a life for 'trinkets' cool or otherwise to consider carefully the message in this song http://www.youtube.com/watch?v=zH46SmVv8SU
The other thing you should consider is how fragile and unpredictable life IS.
I call it the "Cancer wake up". Trust me on this one there is nothing like a bout of cancer to you or a loved one to make one reconsider what is really important.
i.e. do you live to work or work to live?

Chad said...

That question, for me, is one of the all time dumbest. Unless a person is independently wealthy the two are tied together. If I walked out my front door and got hit by a car ripping off my leg that would change my life, views and ideas as well so the cancer thing is another duh moment.

Jon tries to force feed some study that tells us happiness is not tied to wealth - I suspect the way the questions were asked skewed the results, but sitting here in the hills of Tennessee at a cabin overlooking a beautiful landscape sitting in a hot tub sipping on 35 year old bourbon with my family is about the happiest I have ever been. The only thing that will make me happier is when my parents get here to join us.

The fruits of my (and my wife's) labor allows us these special, very special opportunities. We got the Macy's parade on the HDTV, the bird is in the oven and nobody and I mean nobody has anything less than a huge smile on their face.

Now would it be any less special if we were back home - hell yes it would why lie about that. This T-Day will be remembered forever in found light by all of us. And Ex - that is also another reason why my wife and I work this hard is due to life's unknowns. While Jon and possibly you choose to be frugal, not get swept up in buying things your family might enjoy (selfishly I might add) and claiming your happiness is equal or greater than ours because your sitting on one another's lap at the home you come home to every single day of your lives is somewhat of a joke. If God decides that it is my time in 6 months, my kids and my wife and my family will remember and cherish this T-Day above all others. This is memorable, this is living, this is the way I want to live my life without question. Being able to essentially never having to tell my kids no we can't do something warms my toes to the tips and beyond.

I don't know about Jon's kids, your kids, your or Jon's wife - maybe they are simply happy looking at your face sitting at the same kitchen table you sit at everyday, but I'd like to ask them privately if they would be happier there or if they would be happier joining are family here - I suspect the answers would be overwhelming. In order to afford these trips it requires working .

And why not strive to be the best while working? Why not put in extra hours during the week to enjoy an extra on the weekend. I laugh at Jon's assertion that somehow I have less quality time with my kids than maybe others - unless he requires the entire family to sit in the same exact room - unless he has no TV's at all his kids (like all kids) have their own agenda - on weekdays my son has sports, homework, chores and his fun stuff that he likes to do. Sometimes I don't see him until 10 minutes before his bedtime and it had nothing to do with my availability.

On top of all else - the values being learned by my kids - they just can not be under stated. We are raising kids who will value hard work and success - no matter what they decide to do they will have a blueprint of what success looks like.

Time for another pour - HAPPY THANKSGIVING to all.

Chad said...

‎"Thanksgiving is a typically American holiday. In spite of its religious form (giving thanks to God for a good harvest), its essential, secular meaning is a celebration of successful production. It is a producers’ holiday. The lavish meal is a symbol of the fact that abundant consumption is the result and reward of production. Abundance is (or was and ought to be) America’s pride—just as it is the pride of American parents that their children need never know starvation."

The Ayn Rand Letter

Examinator said...

Chad,
My apologies I forgot momentarily that subtly and shades of grey aren't your long suit.
On a personal note your assumptions are well off the facts. If I didn't know you I might be offended.

'Frugal' me? you have to be kidding.I have a computer, book readers, two cycles, I drink wine, love chocolate....ah chocolate hmmmmm and many 'useful' but not strictly necessary things.

I live in a four bedroom house with a large lounge area , I have pets an outside pergola where the family gather with many orchids and a reasonable garden . I just don't subscribe to the BS of consumerism and owning stuff for the sake of ego or displaying opulence or because I can.
Your underlying assumption in your response is that people need 'things' and corporate success to be happy ...frankly that isn't true in fact the exact opposite can be proven. There is a balance.
As for buying each other presents on specific days (why? because some marketeer says so?). What for example are they going to buy me that I haven't already bought myself if I need it? The Aussie term is " sox and Jocks (underpants) reflex". We buy each other gifts when the * need * arises. We get together on 'significant days and when we feel the need. We actually have lengthy conversations with our children on almost a daily basis. In the case of our daughter on the mine several times a day depending on her mood/need.. My corporately minded son at least every other day . My other son I am his research department.
Oh yes my children generally earn more than me currently.

We know and have celebrated "T day" when we lived in the US several times. Surely the key is getting together as a family and sharing...after all that was one of the reasons my wife and I emigrated. Not just the 35YO Bourbon.
FYI booze is an acquired taste and like most things once you get to a certain level further steps provide diminishing differences.
I'll bet you that if I was back in SC I could serve you a bourbon that wasn't a 35 YO one half the price of yours and you wouldn't be able to tell.
I've drank the $600 bottle of wine the $800 bottle of single malt ...sure their nice but really THAT much better worth the extra effort , hours away from my family ...Meh !
As for the implication that “non conservatives” (me/Jon) are somehow not a rampant individualist.....you simply aren't paying attention to what has been written or have an incredibly short attention span.

FYI it is arrogance that *assumes* that only conservatives or Americans value and or aren't individualists, entrepreneurial,ingenious. In fact all those features are HUMAN traits. You really need to get over the notion that the world is divided into two camps Conservatives and 'socialists' (sic). It simply isn't true!
For those who actually read what Jon and I write there are significant differences.

'The dumb question' I'd be curious how you'd define Adelson and Murdoch both are past their best, they hardly need the money to enjoy the 200 yo bourbon. In truth they are their jobs if they stopped they'd lose their self identity and die. Some day you should read about Murdoch's life, talk a bout a tale of misery. His father was too busy for his children ...and Rupert repeated the same mistake.
Finally the cancer thing. Clearly you are still at an age whereby you consider the future and mortality a long way off.
I hope such realisations of the fragility of life comes easy to you and you don't find yourself away from home with your child emergency admitted to hospital and probably dying. Maybe sitting in a waiting room for hours waiting for a diagnosis while wondering about all the things you meant to say or all the things you may not get to share. It is then that every moment becomes important and the time spent on working for that 3D TV that now becomes a regret.

Examinator said...

BTW
In other countries Thanks giving has many names but is largely the same context "harvest festival".
Now the kicker, they have been around and at roughly the same times since pagan times.
Constantine when he converted the Romans from paganism to Christianity (as a promise if he won a particular battle) found his subjects rebelled against losing their (gods)holidays. He simply Followed the Roman practice of adopting pagan gods and their special days by simply re naming them.
Thanksgiving is one morphed version of the celebrations of Bacchus etc.

Christmas is simply appropriation of a major pagan solstice celebrations (Saturnalia) .

Evidence in the Bible descriptions and correlation with historic events puts Jesus' birthday (?) at a different time of year.
BTW there are several Jesuses it was a common(ish) name at the time.

Chad said...

The bourbon was a gift from a customer, I generally am a scotch man and with my cash I buy Cutty Sark. It has the taste I prefer with the price point that makes sense. With that said there are occasions when I splurge and regardless of what you say every drink of the high dollar hootch tastes that much better - probably because the drink symbolically represents a milestone or winning, but it tastes way better. How ironic (yet not surprising) that somehow you know more about liquor than everyone else as well and you want to tell me how to buy and drink my liquor - interesting.

I watched cancer take my girlfriends mom and one of my best friends not to mention others as well, I had surgery to remove part of my face which had cancer. I had a front row seat for many years so I will take your 3 hrs of waiting any day. Your assumption is about as far of the mark as most of your posts. The reason I live like my hair is on fire is because we don't have control so you better make everyday count. A song for you - Tim McGraw's - Live like your dying. The only thing they asked those of us not currently afflicted was to live life with no regrets and that is exactly what I am doing. Sounds like your so busy looking for the Grim Reaper you might be missing something beautiful. Besides my faith allows me to believe that this life is the painful one and when my time is up I am moving on to see love ones lost.

As far as the consumer or ego thing - who cares! What's funny about Liberals/Progressives (besides their ideas always requiring 100% participation) is when they stand up and tell everyone how to live without understanding the consequences. Like Jon and I think you agreed although I don't often read your posts so I guess I am not sure, but like the Global Warming thing. Jon says we need to react right now, turn off every carbon producing car, boat, jet airliner and so on so forth - okay so then what will the people do to make money? Oh thats right gov't will print money and no one will have to work any longer. Total collapse. Your flying your flag - don't impulse buy, your stupid if you do so. If we adopt your way another total collapse. If people only bought what they needed only - no extras and like Jon saying he is driving a 1989 van see how responsible he is, but if we all adopted his attitude their would be nobody working. When we buy a new TV, an RV or rent a cabin in the hills of Tennessee we smile and are happy - we are helping in a small way to keep our fellow hard working Americans while at the same time making great memories for our family.

Examinator said...

Chad,
I'm not looking for the Grim Reaper I think you missed the point I was/am advocating that people stop and enjoy what they have particularly the relationships, rather than work and sacrifice or put it off for a career or things.

My eldest daughter who was diagnosed with a degenerative condition at 16, an is unlikely to live to her 50's.
BTW I've had a few doses of cancer my self ...currently in remission.

Despite her failing health she told me she wanted to go to Sri Lanka and on to India. My advice to her was the maxim of my life "don't die wondering if I had....don't be silly and do it"
Again Chad, it's a matter of degree.

I'm not so sure that your nephew's choice is *undeniably* the best one. But again I'm not him and I don't know all the circumstances.

Like Jon I deliberately drive a 18 yo Subaru sedan for a number of practical reasons. Having had the Mercedes, caddy's, BMW and even a Roles Royce as a mark of my success. But at the end of the day a vehicle is a means of getting from point A to B.

I fail to see that my life has been enriched by them. Certainly not to the point that the working long hours etc were worth the sacrifices.

You really do have a problem in even considering the alternatives except in a Black or White context.

e.g. I don't know how many times I've pointed out to you that "Liberals(US version)" lefties, et al aren't one great amorphous mass neither are they actually for stopping all pollution ....now....today etc as you insist on mis-saying. Sure it would in one sense be great but it isn't realistic. Neither is it sane/realistic to do the proverbial ostrich and bury heads in the sand and go one as though AGW (sic)doesn't exist.
Most telling are those 'corporate executives' who 'just know' everything but when push comes to shove if faced with the real data their myopic experience isn't worth squat. They simply lack the knowledge and skills to read it let alone assess.
The term horses for courses come to mind. Why is it that very few Right wingers have the nous to simply admit that they don't know or don't understand something?

Examinator said...

Jon
Keep an eye on this
http://www.alternet.org/watch-out-plutocrats-progressive-pro-democracy-movement-savvy-and-gearing-take-citizens-united

And this is all the things Chad and the conservatives don't want you to understand...probably because they don't understand them themselves.
http://media.wix.com/ugd//d0a82b_3e6f4e038fd6167c5f8ac59f8aa0e0cb.pdf

Like I say Context/ consequences are everything