Many people complain about the economy being weak, but have many stopped to think that certain segments were bound to become weak? And if certain segments have become weak, might other segments have become strong?
Consider the booming sales of iPods, iPhones, smart phones, DSL subscriptions, wireless subscriptions, and on and on. Airlines are making a mint on their extra fees – to some people's displeasure and to other people's pleasure. Regional activities of all kinds are drawing people to the events and local merchants.
What has become weak is more of the same. Cars are built to last longer and cars are built with less labor. People are staying in their houses longer and not moving so frequently; that means less turnover and that means fewer home sales.
What has become weak is credit card purchases. Not that people have stopped using credit cards, but many have stopped using their credit cards as indefinite loans. In other words, more people have become "dead beats" – people who pay off their current balance every month. That certainly cuts into the profits of credit card companies and banks and the sales of all kinds of businesses
Businesses are still being started. Both the Duluth News Tribune and the Star Tribune feature new or growing businesses every week. These owners have found products and services that people want to pay for. In a world of iPods it will be difficult to sell lots of CDs.
We do have to recognize that life has become difficult for many people. And business "efficiencies" and "no new taxes" governments are making matters worse. If businesses and governments lay off employees, then there will be fewer consumers to buy goods and services. If there are fewer consumers to buy goods and services, there will be fewer sales and taxes. If there are fewer sales and taxes…
