Emerging markets may well want Moët Champagne, Louis Vuitton luggage, and Tag Heuer watches, but luxury shoppers in America "are feeling the pinch" sharply. Just like for your much-lower-income working class relatives, the party is over and the piper expects to be paid - and your credit card is maxed out.
Bernard Arnault, chief executive of Paris-based LVMH Moët Hennessy Louis Vuitton, isn't waiting for the cataclysm to hit. He has a company to keep running, employees to keep paying, and shareholders who still expect to see a return on their investment. Just as a good CEO should, he's aggressively going after sales in these emerging markets, warning others in the luxury goods industry that "a third of all luxury goods will go to China, Russia, and India in the next 10 years."
Kind of beats putting some green hybridization lipstick on those giant SUV hogs and trying to sell them to the same ex-UAW workers who used to build them, doesn't it?
But in America, the cataclysm has already hit. Mass layoff notifications are much more frequent lately as employers cover the option to cut staff. Landmark American retailer Macy's is about to cut 2300 positions, just another sign that there are lots of bargains to be picked up on the way down. It's the sign of the times, as workers still employed labor ever harder to avoid meeting that same fate as the UAW, but they don't have a union to negotiate severance buyouts for them. A Labor Department report issued on February 6th showed that businesses cut employees' hours for the second consecutive quarter at the fastest pace in almost five years, which is seen as good because it reduces "inflationary pressures" and "labor costs."
Yeah! That's the ticket! Let's blame it all on those greedy employees! Why if people would just work for the pleasure of working, everything would be fine - right, Cratchet? You didn't really expect to buy the Mrs. that Donna Karan ensemble, did you? Not with all those rug rats of yours! Hahahahaha......
It isn't just We, the People who are experiencing a little "productivity boost" at the expense of income! Those Communists over at the the Nelson A. Rockefeller Institute of Government report that reduced sales tax revenues are going to produce deficits in half of the state government budgets for the coming year. Property sales tax revenue decreases are also hitting hard in states that experienced a boom in sub prime sales. Arizona is expected to lose 16% of its 2008 general fund requirements for this reason.
Article comments
1 - Dave Nalle
the deficit is so massive that the costs of WWII in current dollars barely matches what it costs to throw a kid's party in Holmby Hills nowadays.
I'm not sure what that last part means, but if you're suggesting there's any comparison between the cost of WW2 and the current deficit, guess again. Adjusted for inflation WW2 cost about $24 trillion dollars in 2008 dollars. Let's see, what is that - about 2.5x the total current national debt?
Math is not your friend, Realist.
As for the rest of the relentless negativism, you aren't thinking about it the right way. High-end retailers are responding to concerns that this coming year may only bring them a 3-4% increase in sales as opposed to last year's 8-10% boom, so they're planning sales.
That means that your happy consumer will be able to buy some Gucci or Prada or a Rolex at 20-40% or more off the usual price.
The market always brings you roses.
Dave
2 - Jonathan Scanlan
Umm... I'm not sure if I agree with your outlook on this Dave. While lay offs and wage cuts might keep inflation low by reducing demand and cost, the practice is ultimately self defeating.
The real problem is the circulation of money. If wealth becomes overly clustered through the externalization of costs, the government is increasingly forced to pick up the tab.
Supposing we got rid of all unskilled jobs; someone is going to have to pay for the education that is essential to those entering the labour market; and that may require higher taxes. Not to mention the extra that needs to be spent on keeping people off the streets.
Where wealth circulates more freely and equitably, you get more competition and thus better prices anyway.
3 - troll
nice rant Realist...people should pay particular attention to your link to 'Gardening When it Counts'
4 - P. Marlowe
Realist... A fine piece. What I find disheartening is this talk among some of the op-ed pieces about the End of Rove-ism in the Republican party.
True, the Evils that are Rove-ism/neo-cons/Cheney-ites has hit (seemingly) a brick wall.
The truth is since Reagan this WALL has been hit each time when the Reps were in control. Each time they took over the CARPETBAGGING was bolder, more naked...
But the truth is these people DON'T retreat to some mist enshrouded isle... They simply slip back into the shadows. It's not as if their paymasters suddenly have no money, and worse, no greed or desire to warp American society to their own ends...
We make this mistake each time. We think we'll never see THAT again. We're right. It comes back even worse...
These people wait. They're patient. A four or eight year run and out means nothing to them. They've been in the process of changing things to their advantage for decades.
Look at the shifts in corporate law, corporate taxes, taxes for multimillionaires and billionaires...
And it isn't as if Dems are saints in political garb. Corruption is corruption. It's just that during the Dem Days it is not so nakedly brazen as it has been when the Reps Run things...
Marlowe
5 - Les Slater
It's convenient to blame the 'extreme right' but the process has been helped quite handily by the Democratic Party moving to the right for decades.
6 - P. Marlowe
Les, I'm begging you - READ my posts first. I just said this about the DEMS.
Marlowe
7 - Les Slater
#4? Your second to the last paragraph mentions what might be considered a move to the right in a narrow economic sense but to the extent you might link the last paragraph to the preceding, there is no ideologically expressed content to it.
8 - P. Marlowe
Good Lord Les don't be a pest! Look beyond the immediate! Of course the ISTBW (Inside the Beltway) Dems are just as beholden to the lobbyist $$, etc. But what Realist is saying, what I'm saying is that the hijacked Republican party (certainly wasn't Eisenhower's Republicans) became the vehicle for - among many other things - tax restructuring for Corporate America and the ultra-rich. The "ideology" you speak of - if I understand you correctly - was PART and PARCEL of the HIJACKING.
Look how the two main sources of the Republican Party's "shock troops": the religious right and the "small" businessman (i.e. companies with less than a few hundred employees). They've both been used and abused. The Bush's Cheney's Rove's Lot's (the man and his ilk, not bare-ass pavement, overgrown with weeds and filled with trash, although that is a pretty good description of Trent Lot's soul) - these people NEVER intended to either fully support the religious right's causes, and they sure as hell weren't going to LEVEL the playing field for the small businessman - they couldn't! The very tax laws they were busily rewriting had to be rewritten to favor the top 3% of America...
READ the tons of material on this. READ - DAILY the BUSINESS sections of the New York Times, The Wall Street Journal (and ask yourself some questions) the Washington Post, the LA Times, hell, even some Texas rags!
The men behind the Republican Curtain have USED and ABUSED good, honest, hardworking men and women who had every reason to believe the Party represented THEM and their LEGITIMATE concerns...
Instead they've been screwed...
The only difference really between a moderate Democrat or an Indie is that they've been SCREAMING at these good people for YEARS that they're being USED!
Marlowe
9 - Les Slater
Marlowe,
“The only difference really between a moderate Democrat or an Indie is that they've been SCREAMING at these good people for YEARS that they're being USED!”
It looks like we’re talking about different things. You’re still focusing on what I described as ‘narrow economic’ issues. This does not rule out including social issues but as expressed, does have a certain one-sided feel to it.
In the last paragraph of your #4, you point out that the Dems are also corrupt. What I’m trying to say is that it has NOTHING to do with corruption. The politicians are saying what they believe. There is no NEED for them to be corrupted. The problem is WHAT they are trying to sell us. Voting for ANY one of them is a vote in support of this rightward shift. And this is a BROAD rightward shift, not just on economic issues, but social issues as well.
Reading the NYT, WSJ, LA Times, etc will not help you clarify this in the least. Their line is that there ARE significant differences between the parties and candidates within them. ALL these rags SUPPORT this move to the right but some people are fooled because a few of the rags CULTIVATE an IMAGE that they are progressive.
Les
10 - P. Marlowe
Les... Thanks for the clarification.
Marlowe