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Apparently the economy in California is doing well. My personal economic indicator revolves around how hard it is to buy ordinary goods and services. At the moment it is very hard.

For starters, the lines everywhere are longer, and the traffic is notably worse than a few years ago. If you can get to a physical store, they don't have your size in stock, or the popular model is already sold out. At best, the salesperson might try to order your item from another store if you can wait a week. With the exception of grocery stores and pharmacies, physical stores are empty shells waiting for the Internet to deliver a head shot.

Apple stores are exceptions. They generally seem to have every model in stock and the staff is excellent. But I won't buy anything at an Apple store this summer because I'm quite certain they have new and better stuff coming soon. Apple trained me not to buy their products today if they might come out with something better soon, and they are always coming out with something better soon. I've been staring at my old and defective iPad for six months wishing there was something I could do about it.

Online shopping isn't much better. Let's say I realize I need to replace some sort of broken item in my house, which is a process that happens a lot. So I go to a web page that carries that product and use the contact link to find the email address for the company. I type out a simple question about the product and wait for a response.

And it never comes.

What kind of company doesn't bother answering a customer who already has his credit card in his hand? Answer: One that has too much business already.

Buying clothes online works unless you want a size that fits. Those sizes are generally not available, even online, which I find puzzling. And if heather grey and navy blue aren't your colors, you're usually out of luck.

And what's up with taking two weeks to deliver an item you purchased online? Which part of the supply chain is doing so well they can't keep up with the business?

I hired a locksmith recently to fix a broken bathroom door locking mechanism. He worked on it over the course of three separate days, including trips back to headquarters to get parts. When he was done, he proudly showed his work. The door handles were back on the door and functioning! The only problem was that the door would never again lock, because he didn't have the right parts for that. He's a locksmith who doesn't think the "locking" part of a bathroom door is terribly important. Apparently his boss was having a hard time hiring qualified employees. That was a bad situation for me, but a good sign for the economy.

I realize this is all anecdotal, but how hard are you finding it to buy normal goods and services compared to a year or two ago?

 
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Aug 16, 2013
i dont 'get' the first paragraph.

it seems as if your thesis is that the better the economy is doing the more scarce goods and services become. this seems like a broken thesis to write a blog on. from my pov it appears to be selfevidently false.
 
 
Jul 11, 2013
I'm retired from my corporate computer programmer job now, but I don't think much has changed in how teams work.

I didn't play hockey, baseball or football, but I watched a lot of games. In baseball, the left-fielder NEVER swooped into the infield and shouldered aside the pitcher. The pitcher pitches, the out-fielders field long drives, the catcher stays behind the plate etc.

When I entered the corporate world, I naively imagined that teams in the workplace would operate on the same principle.

Not even close.

Teams in the workplace operate more like a dogsled team. Dogs that pull a sled in the Idorod are not harness like a team of horses. Instead they are tethered individually to the sled. There is one lead dog, supposedly the lead dog finds the trail, but because of the way the dogs are attached to the sled, they have the illusion of being able to overtake the lead dog and thus become the leader. This works with sled dogs because its in their nature to want to be dominant.

The same is true of workers who have paid a boatload of cash to get trained and land this cushy job. They all think they should be the lead dog and will crush anyone who stands in their way.

 
 
Jul 11, 2013
I'm aghast that a friend just paid a locksmith for hours of work. After the third hour, a neighbor happened by and asked why she didn't just climb in the window and unlock it from inside. Fifty years ago, that was S.O.P. for locksmiths. They always tried the windows first. Then the locksmith gave her his card and said to call him, not the company, and he'd give her a better price. So a man who is willing to screw over his employer could possibly have kept copies of your new keys... that's reassuring.
 
 
+3 Rank Up Rank Down
Jul 10, 2013
You paid someone to work for 3 days to replace a doorknob? Driving around drinking lattes?

Don't get me wrong, I have before and would again pay some kid to cut my grass. Currently cannot locate such a critter. Gen Z? No work ethic? Whatever. Takes me an hour. A lawn service would charge me $110 or more. Less treadmill time for me.

I think exiledsurveyor nailed it. In the time it took you to blog it, you could have fixed it if you had any of the handy skills one would expect of an engineer - or should I say ex-engineer. Even assuming you paid for a total replacement doorknob - probably purchased over the internet because you probably have some fancy-smancy designer thingy that has to match the rest of your CEO-class mansion and probably isn't stocked anywhere like home depot. Where Wally and I shop. Even with that over-payment for the replacement part you'd be ahead time&hassle-wise.

I think a real locksmith would have fabricated the part and got it done. Much like a real engineer who could actually grind metal. But in CA, you probably had an actor playing the part of a locksmith. He probably looked marvelous though.

Do you still own man-tools? A file? A grinder? A vise? Or were you a purely white-shirt computer mouse engineer? I do recall something about once a man can afford to not change his own oil, he is rich ... where did I read that? ;) (Yes, I have succumbed to paying for automotive work. I know a good shop I mostly trust. It's one of my more effective delagations.)

 
 
Jul 10, 2013
Many economists seem to measure the strength of the economy based on whether consumers are spending money like drunken monkeys.

They call it consumer confidence.

But it was exactly this type of confidence that led to the crash. Banks sold consumers on the idea that you could borrow against the equity in your home indefinitely because the value of your home always goes up. Except when it doesn't.

So everyone borrowed, bought bigger houses, 2nd or 3rd new cars, and lots of stuff.

Perhaps a better measure of confidence would be the rate at which consumers put savings into banks, or pay back debt. At the moment, I'd bet that level is less than zero.
 
 
Jul 10, 2013
Whenever someone makes a claim about the economy, I look at the Bureau of Labor Statistics. I try to find the numbers without any spin. Sadly, that's just the unadjusted "employed" numbers. Everything else is full of adjustments and spin, and it's hard to find the straight-forward list of unadjusted numbers. Here's the page:

http://www.bls.gov/webapps/legacy/cpsatab1.htm

Raw numbers: 6/2005: 63.1%, 6/2006: 63.6%, 6/2007: 63.4%, 6/2008: 62.8%, 6/2009: 59.8%, 6/2010: 58.9%, 6/2011: 58.5%, 6/2012: 58.9%, 6/2013: 59.0%

It looks like we're still almost 1% below where we were during the height of the 2009 crash. We're up 0.1% since last year. We're up 0.5% from the all-time low in 2011.
 
 
Jul 10, 2013
If you actually bought the product, all of your questions would be answered.
 
 
+3 Rank Up Rank Down
Jul 10, 2013
Wake-up call to all the smart analists:

Ofcourse the economy is not doing better. One of the most important things however that would boost the economy is a wide-spread BELIEF that the econmy is going to get better. I would go so far as to claim that this belief is the one thing that made the USA what it is today. The US population is probably the most optimistic in the world. But this seems to be changing. And this is where Scott tries to step in, with the help of a little hypnosis. You just have to engage in it.

Don't try to be grumpy, pessimistic and have a good economy at the same time. Only the Germans are able to pull that off, but you don't want to be like them, do you?
 
 
+6 Rank Up Rank Down
Jul 9, 2013
The problem is that you can make more money not being productive.
 
 
Jul 9, 2013
Showrooming = the practice of looking at what you want in a physical store, and then buying it online.

Every month, in one article or another, Consumer Reports explicitly recommends this practice.

If this doesn't kill of retail, I don't know what will (maybe retail stores will start charging a "cover charge" at the door, refundable if you actually buy something....).
 
 
+9 Rank Up Rank Down
Jul 9, 2013
To me it seems like you are confusing 'a good economy' with 'an educational system so terrible that it produces nothing but incompetent morons'. Any of the situations you describe would be quickly remedied if there were anyone in the supply chain with the smallest amount of intelligence. But hey, what do I know? I must be one too since I am questioning the economic theory of someone with a degree in economics. Wait...
 
 
+2 Rank Up Rank Down
Jul 9, 2013
I'd have to concur with Whtllnew (and Dutchmang, sort of). California is a high-tax state. Anyone and everyone who makes money and wants to keep it is leaving. I'm guessing the business taxes are high too. So if the businesses are concluding California is less profitable and cannot be made more profitable through improved services, it will get less attention.

Online shops being out of things is just weird. Physical stores are just as bad on the east coast for clothes, though -- I'm lucky if on a trip I can find one pair of pants or one shirt that's in my size and isn't hideously ugly. I go to buy men's jeans and every size is something like 40 waist, 29 inseam, and I'm left wondering why the stores have so many of what seems like a ridiculous size. I guess with America getting obese, the stores are only catering to the Oversized American demographic??
 
 
Jul 9, 2013
My anecdotal evidence is from Ohio. We listed our house for sale last month and had multiple people come look at it until we were offered our asking price on its 6th day on the market. Who pays sicker price on a house?? A couple weeks later, my friend sold his house and got their offer a day after it was listed.

I put my car up for sale on Craigslist last week and had a call that night. I'm selling it for less than I asked but still more than when I bought it used 3 years ago.
 
 
Jul 9, 2013
In the UK we have a number of similar things going on. The town centre shops are dying off due to high rents, rates and punitive parking charges. Large shopping malls with free parking are doing well although they do seem to be full of clothing shops and cafes with little else so how long they can last I don't know. On line shopping was doing really well until our postal service got in on the act and jacked their prices sky high whilst reducing levels of service (they called it customer choice and kept their faces straight). Our petrol (gas) prices have escalated to the point of being $7.66 a gallon so the cost of transporting goods has gone crazy. The charges for heating our homes, shops and offices have quadrupled recently so small businesses have to bear that as well. It seems that greed is killing off Britain.
 
 
+11 Rank Up Rank Down
Jul 9, 2013
Apple has fallen victim to market maturity.

In an early adopter market you have what no-one else has. You can charge pretty much what you like and the problem is letting everybody know - and matching demand with production.

Later it becomes a mature market. Growth slows. Competitors copy you. Margins become tighter.
The battle is about cost and clout. Who can get their product into the most outlets. Who can make margin by making more from selling at the same price or less.

That's where Samsung wins. As it manufactures its own product, it has margin which someone subcontracting manufacturing can never do. It hasn't the cost of developing the market either - it relies on switching people who started out to buy an iPhone. And its developers don't have to re-invent everything - simply get the features Apple introduced to work, just as well, on their phone/tablet/whatever.

When the market is mature changes become tweaks. They don't bring bragging rights any more. For example, no-one cares about PC processor speed now - once it was "I've got a 1Gig, yours is only an 800." The iPhone - and the iPad are destined to have this future. Until someone comes along and re-invents the category.

But it won't be Apple. The incumbent always misses the next wave.
 
 
Jul 9, 2013
The internet doesn't need to deliver a head shot. They have a stranglehold.

Retail overheads are fixed. Rent, rates, wages, cost of stock.
Margins are pretty much fixed too - there is a bell curve governing pricing (too little and you sell lots but make little, too much and you make good margins but don't sell much) and most companies have pretty much found the sweet spot.

But the internet is approaching 20% of all sales.
Taking 20% off your sales, while trying to cover the same overhead is difficult.

Companies have responded by paring stock - hence some sizes aren't there.
They've pressured suppliers - but third world wages are now rising fast.

They're fast running out of options.
We're reaching the tipping point.

Soon there will only be food shops and fashion stores left.
 
 
Jul 9, 2013
In Colorado I haven't noticed any difference. This summer I've been spending mostly on travel and I have had no issues finding rooms anywhere at a low price and I've done most of this booking at the last minute.

Of course the fact that our state is on fire might have something to do with the low demand in this market...
 
 
Jul 9, 2013
As wealth continues to trickle upwards and the middle class continues to slide, could we reach a point where nearly every business is chasing the same comparative handful of rich consumers, leaving a few monster chains to peddle zero-frills necessities to the rest of the population?

It would effectively mean the end of traditional advertising, and of any media still dependent on advertising. There'd be no need to brand and position generic foodstuffs and jeans. You'd barely have to brand the retail chain itself since bottom-tier consumers would have no choice but the closest and cheapest.

Affordable entertainment would devolve to pure subsidized content: political or religious propaganda barely disguised as entertainment, news or even sports (The strong, happy students of Liberty University versus the drooling, swearing inmates of some godless liberal school).

Instead of investing in broad campaigns, surviving sellers of luxury goods would target market to their small customer bases almost on an individual basis. They'd have to, once they all began fighting for shares of the shrinking pie. The pretty girls from the auto shows might actually call on each guy who could still afford a sports car.

The shopping experience would deteriorate even further for the vast majority of shoppers as the trends discussed above gained speed. Why pamper a shopper who realistically has no better options? Why have malls when the end of discretionary income precludes recreational shopping and/or impulse buying? Why waste money on service or product quality when they no longer provide a competitive advantage? "Competition" will be the last few monster chains agreeing to lines on a map -- or a merger.

The final logical stage of "capitalism", as currently practiced by the biggest players, could be the kind of grim Soviet purgatory capitalism was meant to protect us against.

Okay. It's late and I'm in a bad mood.
 
 
+2 Rank Up Rank Down
Jul 9, 2013
Risingstarlp is spot-on about cost cutting and personnel reductions at retail outlets. I have been shopping at Wal-Mart for about 2 decades. Within the past year, I have found empty shelves (too few stockers), exasperated employees, and nightmarishly long check out lines, because only 3 or 4 lanes are open. I read that Wal Mart has reduced staffing from about 350 employees per store to around 300. I question the validity of this technique since it persuaded me to take my grocery shopping to Target. The meltdown at Wal Mart also helped push me to Amazon Prime, where I can buy pretty much every non-perishable item on line. I'm puzzled about the delivery delays Scott talks about, as I get everything in 2 or 3 days, at least from Amazon.
 
 
Jul 8, 2013
The workplace seems to have a lot more Wally's than it used to.
 
 
 
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