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The Biz Roundup December 23

Take a number.

The National Retail Federation called for three periods of sales tax-free shopping that would last 10 days each in March, July and October 2009. The trade group estimates that it would save consumers about $20 billion, or $175 per family. Under the industry group’s proposal, which would exclude alcohol and tobacco sales, the federal government would reimburse states for the lost tax revenue.

(“Retailers Want In on Stimulus Plan,” Wall Street Journal, December 24) Don’t bother saving your sheckels for that plasma TV just yet. Here’s the problem I predicted for the “economic stimulus” package last year: people would use the money to pay down debt. That’s largely what they did. Here’s the problem with the “sales tax holidays” being proposed by the nation’s retailers: people will spend a month or more before the holiday not spending money in anticipation of the sales tax holiday. They will then stockpile during the sales tax holiday, thus sharply reducing their spending in the weeks and months following the holiday. I predict no significant long-term (say, three months) effect from this kludgy, complex, and cupidinous “stimulus” plan. Obama’s economic team is smarter than this.

More bad news for retailers: Santa’s fighting foreclosure on the North Pole and he’s worried about being laid off, so he’s shopping a whole lot less this year.

[ComScore] said online spending for the first 49 days of the critical November-December gift-buying period fell 1% to $24.03 billion compared to $24.15 billion over the same period last year.

Andrew Lipsman, analyst with ComScore, said this is the first time the firm has recorded a drop in the measure since it started tracking holiday ecommerce sales in 2001.

(“First-ever Drop for Online Holiday Sales,” CNN Money, December 23) I did a small economic experiment today. Not terribly scientific, but neither is economics. Here it is: I went to the mall. Then I went to Best Buy. Why? To see if I could. You know, if I could find parking. If I could get around inside the mall. Buy something. Some background: once a long, long time ago, I went to the mall on December 23. I am still plagued by nightmares and facial tics years later. But today? I found parking at the mall in the first row I turned into (five spots in that one row alone). I easily found parking at Best Buy right near the door (lots and lots of empty spaces). There were people bustling and boobing about in the mall and Best Buy, but it wasn’t bad, maybe a one on the aggravateme-o-meter. Wherever I went, I could move forward anytime I wanted to. Or backward. Sideways. Diagonally. I bought stuff all over the place and most of the stuff I bought was on sale, some 50% off. Here’s the scary data: the lines at the registers? Nothing really serious. Maybe a one on the pissmeoff-o-meter. So what’s my conclusion from all this rigorous economic data I scientifically gathered today? In this coming year, we’re seriously screwed, folks. Seriously. Screwed.

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