By Dick Miller
WE.CONNECT.DOTS: Small wonder we accept government propaganda without challenge.
Look at the examples we set as consumers.
‘Sales’ are the norm these days. No one admits if he or she paid regular price for an item.
My wife is a veteran Macy’s shopper who once allowed me to accompany her. Then one time she caught me asking clerks if they had ever sold an item at list price.
I am always curious about the wholesale cost of consumer goods. Before the days of constant sales you assumed that merchants “keystoned” the price of a product.
That means the merchant might pay $5 for a jersey and then, doubling the price, sell it for $10. If the item moved too slowly or Mr. Merchant ordered too many, he might put the product on sale for $7 or $8.
That formula, of course, is out the window in today’s sales. “Buy-one-get-one-free” (or “BOGO”) obviously does not work if you have only doubled the cost to sale price. This formula would leave nothing for wages, advertising, utilities, rent or profit. More likely, those $5 jerseys were marked up to $20 list price before offered on a “BOGO” basis.
Another example is the current “As Seen on TV” items. The deal now centers on products advertised at $10 or $20, but your order will get you a second widget “free.” Always they say you will must pay shipping and handling on the second item.
Since the merchant, usually charges close to $10 shipping and handling on a $10 product, you pay $30 for two items. Most likely, if you decide to return the merchandise you cannot recover shipping and handling fees.
Most consumers know this is just another “con” game.
The final example concerns the leasing of new vehicles.
When car leasing became fashionable, we learned a significant amount of up-front money was due at signing. The large type in the ad blared you can lease this car for $299 per month.
Then in type not even half this size: “$3,995 due at signing.”
You get no equity in the vehicle, but if you put enough money down, say $25 or $30,000, you might rent a Jaguar for $10 per month.
Again, small wonder car salespersons and members of Congress share the lowest rung on the “confidence ladder.” Even our President is not held in as much esteem as past Chief Executives.
You gotta love the spin they put on our economy.
We are told “the economy is recovering, certainly by all measurements except employment. Just be patient and soon there will be jobs for everyone.” Occasionally one of our more sympathetic leaders might use the word “tepid” when describing the recovery.
Here is the story our Leaders refuse to tell.
Our economy is roaring along, indeed, thanks to technology. Each year the American work force has been able to increase productivity. Output is up because we are able to produce more with less work. Yes, some work shifted to overseas, but the preceding statement holds true for most all labor performed in this country.
We must re-invent the way our society clicks if everyone is to have a job. That is the truth no politician will tell us if he or she wants re-elected. Without a huge public works program, new employment is not going to be significant.
Too much recovery funding in 2009 was targeted to tax cuts. We were told these tax cuts would trickle down to new jobs. Of course, that did not happen.
Our government has also told us it is necessary we keep interest rates low. This is necessary for our economy to continue growing. Truth again is trampled. The government needs low interest rates to continue to afford servicing trillions in debt. Government cannot compete to sell bonds to finance the debt in what we jokingly refer to as the “free market.”
Bottom Line: Continued developments in automation, robotics, drones and artificial intelligence will further reduce the number of workers we need. As we noted last week, best to advise your kids to get a government job.
