Like most folks, I took Economics in high school. Not that I remember much, it was a long time ago. As it is, anything that involves finances usually leaves me glassy-eyed. I understand some basic concepts of economics, such as “The Law of Supply and Demand”, and the fact that one needs to have money to buy anything. I also know that most people need a job to earn the money they use to buy products or services.
For however it started, the recession has resulted in a great deal of people losing their jobs. It seems obvious, to me anyway, that without a paycheck, most folks are going to limit their spending.
Since I work as a cashier at a store/gas station, I have seen first hand the decrease in spending. The early morning workers don’t come in for coffee and donuts anymore. Smokers are cutting back on their smoking. Patrons are driving less, and buying less gas. Kids don’t get their candy treats, either.
Now comes the part I don’t get. Companies and corporations have noticed a drop in their profits. People are not buying their ‘stuff’.
They can’t afford to!
So what do the companies and corporations do?
They raise their prices!
As I stock shelves and re-price product folks can’t afford to buy in the first place, I wonder who are the geniuses who figure that higher prices will improve the economy?