Photo: By Michael Holden on flickr
In a provocative editorial in the Times today, Adam Davidson writes that despite the havoc Black Friday wreaks on our wallets, every day in America should be just like it.”Black Friday is essentially a one-day economic-stimulus plan and job-creation program. Retailers use TV commercials and deep discounts, rather than tax breaks and infrastructure spending, but the effect is the same: billions of dollars, which would otherwise never be spent, make their way into circulation.”
Davidson doesn’t want retailers to keep slashing prices day after day—this would stave off spending as consumers ask themselves “why buy it today if it’s going on sale tomorrow?” and of course “lower profits from smaller margins” might force smaller employers to cut back staff which would worsen unemployment.
However, he does argue the Federal Reserve should hike inflation to scare consumers into spending more. If they see their money’s losing value, he says, they’ll be more inclined to burn it.
What do you think: Is inflation the cure-all for America’s woes, or is Davidson blowing hot air? Let us know in the comments.
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