Tag Archives: Consumerism

A Weak Dollar is just Dumb

We currently are experiencing a very weak dollar, for many this is news, but really a weak dollar isn’t news, it’s been around for 30 years and the reasoning behind a weak dollar are as out dated as writing on clay tablets.  A strong dollar is what is needed, as strong a dollar as is possible and here’s why.


Back in the 70’s, when we actually had a manufacturing base in the US, people realized that a strong dollar made it hard for people in developing nations or what was called the third world back then, found it hard to buy US goods because their currency was so weak.  So instead of trying to improve the quality of life and value of the currency for these other people, the then new idea of globalization and free trade, came around and said “lets have a weak dollar so our stuff is cheap overseas.”  People went along with that idea, probably not realizing what a bad idea it was.


So since the mid 70’s the dollar has been weakened intentionally.  So when I hear conspiracy theories about the intentional weakening of the dollar by Bush, I kind of shake my head.  Yeah he is weakening it, but not like he is the only one who was doing it, so was Clinton and all the others before since 1975.  Now this doesn’t excuse anyone from knowing the facts on the issue.  The idea back then was to make our products competitive, back when manufacturing was king of the economy.  Fast forward to the present, manufacturing is not king, the consumer is.


So all those manufacturers who wanted to sell cheap stuff to people in the developing world, decided to go produce their goods there, leaving we the consumers as the king of the US economy.  Now the logic of that is another debate, which I am not discussing here so please refrain from debating this point.  70% of the economy is driven by consumer spending, about 10-15% by manufacturing, so we have a weak dollar to help 10% at the expense of 70%.  A strong dollar means everything is cheaper, gas, food, cheap junk from China at Wal Mart, etc…  A weak dollar means all those things cost more.  You spend more money to buy the same donut that was 63 cents last year, now is 67 cents, same donut, it doesn’t taste any better!  So as you spend more on the same thing you can’t spend enough on all the things you want and the consumer engine slows down and so does the economy.


It is unfortunate that the free traders fail to realize that their policies are failing.  First off, if they were so concerned about people in other countries being able to buy their products, they should have focused on quality of life, not price.  So the theory was flawed from the start.  Second, why are we the consumers paying the price for all this?  If you want to have a strong dollar and as a consumer, you do!  Fight to impose taxes on companies that outsource and are just branding companies trying to sell you junk that is probably tainted with lead anyway.  But first you need to ensure we vote in people who understand a weak dollar is just dumb and will fight to have the strongest dollar possible.  When the corporations complain about it, who cares, they are 10% and they will leave and have left us to produce overseas.  In fact it should be a law that a company can not lobby unless 70% of its manufacturing is based in the US.  That would solve a lot.


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Filed under Business, Consumer Activism, Consumerism, Globalization, International Trade, Politics, The World

Black Friday

One of my favorite days of the year is the day after Thanksgiving here in the US.  Why?  The madness that we know as Black Friday, is why.  A few years ago, I went out to partake as a relative wanted me to join them.  Up till then, Friday morning after Thanksgiving was for sleeping, not shopping.  But once I showed up and saw the craziness of the morning deal dashing, I was hooked as a marketer.  The psychological motives that drive otherwise normal people to get a look of premeditative murder in their eye over some heavily discounted item, draws my curiosity.  What combination of factors drives people to act this way?  That’s been my once a year quest to learn about.


This year I got up at 4:30am to hit the stores.  It was pretty cold at 15F and the morning schedule had been mapped out.  To really get the full impact you need to check the ads, I do it the old fashion way and just read the Thanksgiving day paper to see who has what.  Now I was actually starting late, some stores had opened at midnight but I was not interested in those this year, this year, I was off to see the electronics.


I hit the highway and quickly made my way to Circuit City which had a line going around the store already.  People had camped out all night and others were trying to cut in line to get in with the few deals available.  As my theory was, the electronics stock even less of the hot deals than other types of stores and that theory seemed to hold true, I was in the store in the first 5 minutes and they had sold out of the on sale items already; and they certainly had way more people than the fire marshal would have liked, in the store.


From Circuit City I head to WalMart where security was standing guard quite nervously.  It was a mad house!  I headed to the electronics area and a fight had already broken out, which may account for the nervous security guards at the front.  The crowd was a bit to lively for my taste, more likely to brawl at any moment, so I left to take a breakfast break. 


Next was to OfficeMax which had about 50 people in line when I showed up 20 minutes before the official open time.  As I walked to the door, they opened up early and I quickly got in line and went with the wave of people who were pouring into the store.  I was carried on to the discounted sales table and grabbed a nicely priced 500 gig hard drive.  It was like a feeding frenzy and arms went diving in for the deal like piranha going in for the kill.  There was a kind of rush getting in there and grabbing a deal before the others could, I admit there was a kind of buzz one can feel to it as you actually get something you wanted.


Next I took a detour to World Market and won some free chocolate, Intense Dark 85% cacao, a bit harsh but it is suppose to be good for you.  Then I headed to Target where it was pretty much the same, a mad rush for items, but by then it was 8am and the buzz was gone, so I headed home.


The stores do a great job on getting the word out but I have to say their strategy is way off, it doesn’t work anymore.  Here is what they do, they put in the paper a great deal, like a $300 laptop that is actually decent, and then they only have 10 in stock or something really low like that.  They expect those who don’t get the laptop will just buy something else, that’s not happening.  There were more people out this year looking for deals, this is because the dollar is weak and things cost more so people want a good deal or they won’t play.  So if they can’t get the deal they will just wait.  This means, stores are going to have to offer more deals. 


Most people I know are waiting for the deals, they expect deals and good deals and will wait instead of paying retail or 10% off, they want a really good deal, 50% or such.  I suspect retailers are going to find people are not fooled by their Black Friday tricks and will wait for better deals.


Filed under Branding, Business, Consumerism, Life, Marketing