Time For a Revolution
As a matter of ritual, I read certain columnists to get their perspective on things. I read Nicholas Kristof, Maureen Dowd and Paul Krugman from the New York Times. I read Bill O’Reilly’s posts and I read several columnists from the Post and the Wall Street Journal as well. I rarely, if ever, site any of the columns in my column but today I will.
O’Reilly, love him or hate him, usually brings home points quickly and succinctly. I don’t always agree with him but I do like the fact that he does not beat around the bush. He is a regular guy from Long Island who happens to be very smart, very well connected and while he has a huge ego, he will always say when something is his opinion or when something is a fact.
I have never been a fan of Tucker Carlson but again, he will have his facts checked and rechecked to make sure what he is saying is the truth.
That’s the thing about Conservatives with street cred, they may bloviate from time to time but they identify and separate fact from opinion. I am ok with that. I may not agree but I appreciate the opinion (from a very intelliigent person) and I know when they say it is a fact, it is.
This is not something I can say about Liberals and Progressives. They operate as if their opinions are facts. Opinions are not facts, they are opinions. Watch MSNBC for any length of time and count how many times one of their reporters or intelligent will use the word opinion. Do it for two hours if you dare. I will bet some pretty good money it won’t be more than 2 times.
Sure Conservatives can twist facts to make any case they want. I get that. Both sides do that religiously but in the dialogue, most Conservatives will qualify a statement with, “In my opinion”. That will never happen with a Liberal. Like I have said, Liberal opinions are facts.
Getting back to O’Reilly, in his column today on The No-Spin News he mentions something that I have been writing about for a couple of years, the abusive pricing practices businesses are employing.
It has infected pretty much every level of the economy and there doesn’t seem to be any end to it. His suggestion is to walk away and I think that if more and more people decided that $8.99 for a double egg on a roll with American cheese, salt, pepper and ketchup was too much and decided to skip that treat, local businesses might realize that keeping people satisfied is not only a function of good products and good service, it is also a function of good pricing.
You have to wonder how many people are buying Lox for instance. One of my favorite treats, but the prices have just gotten out of control. One year ago, my local deli would sell hand sliced Nova Scotia Lox for roughly 41 dollars a pound. Expensive? Yes, was it worth it? Sometimes. I now see that very same Lox is $65 a pound. A 59% increase in price in one year! Let’s put this in perspective for a second. At BJ’s an 8 ounce package of their best Lox is $22. Works out to $44 a pound. Last year, it was $22 for an 8 ounce package.
Granted, the quality isn’t the same and the buying power of BJ’s is much different than the food distributer my deli uses but how does one place have zero increase and yet another has a 59% increase.
I can site probably 30-50 examples off the top of my head about abusive pricing policies at every level.
Please don’t come at me with the small business cry. Rents are going up, electricity is going up, the food purveyors are gauging them. Stop it! Face the facts, small businesses along with big businesses have taken advantage of the current pricing cycle and are milking it for whatever it is worth.
Every small business complains about Amazon or Walmart or Costco. They can’t compete. Size gobbles up size every time. It is only partially true. Part of the reason that customers are going to big box retailers instead of Mom and Pop stores is for price but I think subconsciously people don’t want to feel ripped off every time they leave a store. You know when you shop at a Walmart, you are probably getting the best price anywhere for whatever you bought. Who cares that the store is a madhouse and some of the clientele is sketchy. Why would I pay 40% more for the same product?
This is actually something I don’t think people have ever thought about as far as inflationary cycles go. I think that at the end of every inflationary cycle you have people going to the point of lowest pricing. It is the last phase before inflation is broken.
People are sick and tired of spiraling prices and they tend to go to that place where they walk out with a basket full of items for a fair price.
The soft landing comes after.
That is where we are now. Consumers will spend but they aren’t paying $65 a pound for lox. They might forgo the whole idea or go to a BJ’s or Costco and buy it a price commensurate with the availability and uniqueness.
What does it do to the economy as whole? Simple. Companies that are perceived to be a fair value company will survive and thrive and companies that took full advantage of the pricing spiral will get hit hard.
That is when inflation has finally run it’s course. Demand slackens for products perceived to be too expensive and money flows to products that people still believe are fairly priced.
This whole idea is not new. Supermarkets have known this for years. When the economy is good and inflation is normal, supermarkets will put high value, more expensive branded products at eye level. When the economy is softer and inflation is an issue, store brands become displayed in prime locations. They typically are cheaper yet the supermarket produces a higher profit margin on these products rather than name brand products.
Stores like Dollar general do better in high inflation times simply because they offer better value. Consumers will buy what they can afford and if local merchants price themselves into oblivian, that is on them.
I love a good deli, don’t get me wrong, but they are responsible for many of their own problems.
BTW, the place I have been circling back to with the Philadelphia Cream Cheese now has it for 6.95 a brick!