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GregW · 01-01-2012, 06:05 PM

Is my spending influenced by confidence? Yes 100%. For example if I feared losing my job my spending would instantly be cut back. That is just common sense.
And ultimately even a rumor of layoffs can instantly cripple an economy.
Here is an example for you. You are a manufacturing company that employs production workers. Wal-Mart, one of the larger purchasers, says that they will now only pay $7 for a product you were recently charging $10 for. A foreign company will make it for that price. To answer your question: why were they charging "so much more?" , is because the company pays American citizens , American wages and also pays research and development , while foreign companies will copy the product changing one minor thing and then selling it to American markets.
So, you as an executive have two choices. To lay off workers and stop selling to Wal-Mart or to ship all or part of the production off shore to be able to meet Wal-Mart’s price demand. Following so far?
Now that there are rumors of layoffs, common sense would tell you that those factory workers will instantly cut back spending. This seems minor at first until you consider all the others affected by it. The local restaurants see a decrease in business, so those employees spend less. The tr#^&#^&#^&#^&#^&g company that moves the products hears of this and instantly their employees are worried and spending less. This follows suit with all other industries from real estateto the guy filling the vending machine.
Now, do you understand how this can quickly affect a lot of industries?
Now imagine it in a lot more towns.

Now, the other issues. Is the money saved by purchasing cheaper goods at Wal-Mart, and then pushed back into the economy? Not necessarily. And even if it is the value of the dollar is greatly effected due to the problem with the economy.

Is Wal-Mart the only offender? No, of course not. I used it as an example.
If you think Wal-Mart has nothing to do with unemployment, then tell me how many manufacturing jobs it supports, and how many jobs it has sent overseas?

01-01-2012, 06:05 PM	#20
GregW Secretsquirrel iTrader: (1) Join Date: Dec 2010 Location: South Shore , MA Posts: 659	Is my spending influenced by confidence? Yes 100%. For example if I feared losing my job my spending would instantly be cut back. That is just common sense. And ultimately even a rumor of layoffs can instantly cripple an economy. Here is an example for you. You are a manufacturing company that employs production workers. Wal-Mart, one of the larger purchasers, says that they will now only pay $7 for a product you were recently charging $10 for. A foreign company will make it for that price. To answer your question: why were they charging "so much more?" , is because the company pays American citizens , American wages and also pays research and development , while foreign companies will copy the product changing one minor thing and then selling it to American markets. So, you as an executive have two choices. To lay off workers and stop selling to Wal-Mart or to ship all or part of the production off shore to be able to meet Wal-Mart’s price demand. Following so far? Now that there are rumors of layoffs, common sense would tell you that those factory workers will instantly cut back spending. This seems minor at first until you consider all the others affected by it. The local restaurants see a decrease in business, so those employees spend less. The tr#^&#^&#^&#^&#^&g company that moves the products hears of this and instantly their employees are worried and spending less. This follows suit with all other industries from real estateto the guy filling the vending machine. Now, do you understand how this can quickly affect a lot of industries? Now imagine it in a lot more towns. Now, the other issues. Is the money saved by purchasing cheaper goods at Wal-Mart, and then pushed back into the economy? Not necessarily. And even if it is the value of the dollar is greatly effected due to the problem with the economy. Is Wal-Mart the only offender? No, of course not. I used it as an example. If you think Wal-Mart has nothing to do with unemployment, then tell me how many manufacturing jobs it supports, and how many jobs it has sent overseas?