Some Basic Economics
3 April 2007
News Editor, USA Today
Dear Editor:
When criticizing Circuit City's decision to lay off many of its employees, you miss two crucial facts ("Circuit City's harsh layoffs give glimpse of a new world," April 3).
First, Circuit City is responding to consumers. As electronic products become less expensive and easier to use, consumers have less need for on-site personal service. This fact is one reason why consumers buy increasingly from on-line retailers.
Second, the money that consumers save by buying on-line doesn't disappear. Each dollar is either saved and invested or is spent on goods and services that previously were too expensive for most consumers. Either way, the economy grows.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
News Editor, USA Today
Dear Editor:
When criticizing Circuit City's decision to lay off many of its employees, you miss two crucial facts ("Circuit City's harsh layoffs give glimpse of a new world," April 3).
First, Circuit City is responding to consumers. As electronic products become less expensive and easier to use, consumers have less need for on-site personal service. This fact is one reason why consumers buy increasingly from on-line retailers.
Second, the money that consumers save by buying on-line doesn't disappear. Each dollar is either saved and invested or is spent on goods and services that previously were too expensive for most consumers. Either way, the economy grows.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Sunday November 18, 2007 at 2:17pm