Thursday, May 26, 2011

DUH!!!

NPR reports that consumers who are squeezed at the pump have pulled back on spending in other areas. The result is being felt on the economy.
"High gasoline prices, government budget cuts and weaker-than-expected consumer spending caused the economy to grow only weakly in the first three months of the year."
Thanks to NPR for pointing out the obvious - that higher gas prices cut into money consumers would rather spend elsewhere.

That's why the corporate leaders who feel that squeezing as much out of their employees for as little as possible are remarkably short-sighted. A consumer-driven economy needs consumers with funds to spend.

So dip into the profit goody bag and start giving employees much-deserved raises. Hire new talent to fill key positions. (There's a lot of talent looking for a compatible work hook-up right now, FYI.)

If business leaders want to sell their product, they need to make sure America's got consumers with money to put towards consumption. And by consumers, I mean the broader market beyond just the high-paid folks in the C-suite.

And if the GOP wants to continue to assert that stopping the only spender in town (the government) from spending is the best way to jump start the economy, good luck fellas! Way to remain blind to the evidence! Their "big idea" is not showing much traction today.

4 comments:

Anonymous said...

people could just drive less? Car pool more, find other ways to be efficient.

Just because gas prices are high does not mean you have to cut back spending in other ares.

Or another way to look at it, is apparently Americans are still not saving enough if there are areas that they can cut back from

Main Street Muse said...

People could drive less, but that would depend on if they have neighbors that head over to the same corporation at the same time or live in an area with decent public transit. But that's not always the reality.

And shifting the mode of transportation can take time if the elements (neighbors who are colleagues on your same schedule; public transit, which has had the budget shredded in many areas) aren't immediately in place.

But yours is a good point - and one that many people probably don't consider as they should.

Anonymous said...

even with out neighbors, or public transportation it is still possible.

In the digital age it would be incredibly easy to find a group of commuters going the same way within in a reasonable distance..

Also the perception of distance is a bit out of touch without public transportation. Grocery stores within a mile are certainly walkable. Ask any NYC or Chicago resident how many miles they walk a day for even simple tasks.

Main Street Muse said...

When I lived in Chicago (the city, not the 'burbs), most people I knew drove to the store.

But again, your point is well taken. Our car-obsessed society can do with a change, given the price and risks associated with big oil.