On The Run {Part II}

I know I said that I wouldn't be posting today but had a few random thoughts and wanted to put them out there for the "Good of the Corp" {an old Culver Summer School expression which I don't expect anybody else but CSS alumni to understand}.  

-ISIS, the new war in Iraq, Syria, Ukraine, the economic problems in the European Union, American/Cuban attempts at repairing relations, drug wars in Mexico and continued tensions in the South China Sea are to me all indicators that the world is trying to get somewhere.  That somewhere is likely a new way of viewing things and a reordering of alliances and regional powers.  We may not know how this will finally look for years or decades, but suddenly everything old seems new again.  We're going to cover this a bit more in the future.

-Winter in the northern tier of the country has been brutal.  Expect it to start impacting GDP numbers for the first quarter just as it did last year.  My response to this will be the same as last year when winter never seemed to loosen its grip on us.  "Nobody bought cars, went to the mall or looked for a house.  Now some economic activity doesn't get made up.  You don't make up going to the movies or going out to dinner.  But most demand is simply demand that's been put off.  I think that things like car sales and consumer purchases will be much higher this spring than most investors expect.  I think we'll add a few basis points on to GDP because of this as well."  For what it's worth and solely on a gut basis, I'll guess that we've been about as cold as last year but we have nowhere near the snow so far.  That could change as some of our worst storms in the Chicagoland area have come in March.  Unless that happens we're going to end up only slightly above average this year in snow but the Great Lakes are more frozen now than they were a year ago.    East Coast has of course suffered our snow fate this year.  That's why I think we're about to see more buzz on winter's effect on the economy.  

-Let's say for the sake of argument I can buy an identical set of golf clubs on line as at a typical sporting goods store.  Let's also say that I can save myself $50-100 dollars on the purchase, then these are the questions I ask myself-even if I don't necessarily have all the answers.

1.) Why wouldn't I do this?  Ok maybe I won't but it's likely my children who are much more comfortable buying items unseen online would do so.

2.)  How do economists record this transaction.  The sporting goods store, to the extent they'd even know about this, would record it as a lost sale.  However, I DID buy clubs and the seller booked a transaction that looks every bit like a retail sale if I'd purchased these in the store.

3.)  What is the sales tax hit.  I know that somebody's supposed to pay sales taxes most of the time and I'm pretty sure that most of the time nobody's collecting any money for Uncle Sam.  Folks that have online businesses where this is their livelihood may do so but I'd be willing to bet the guy selling a used set of clubs in his garage isn't giving Uncle Sam his cut.

4.)  How much is this bleeding sales away from traditional retailers and how, if it all is it being measured as economic activity.

Back Monday.