Going Thrift

I love shopping at Trift stores, though I see what InformedTexan is saying. Personally it's the 'reuse' side of it. Buying 'throw out' items instead of paying to have new clothing made.

Although it's good that people are being frugal, but the way that this is being looked at is all wrong.

Yes, it's an increase in business for at least someone. But, it's even more so an indicator of a suffering economy. The products sold at Goodwill and the Salvation Army are considered inferior goods (their demand goes up when incomes go down) rather than normal goods being sold at retail stores.

In fact, the sale of used items doesn't even count in the U.S. GDP, so these sales don't really supplement the U.S. economy directly - mostly due to the fact that the demand for goods sold from retail stores (products that are being manufactured and therefore requiring jobs to produce) is going down because people are buying cheaper substitutes. When people buy products that aren't being MADE, then no one has those jobs to make those products.

Like the video said, a majority of these shoppers are middle class Americans. If they can afford more expensive products but are buying more inexpensive products, this means they're trying to save for the future, when they feel their buying power might not be as strong. They're trying to build up their future standard of living by lowering their current consumption. This means that a lot of people see, for themselves, a dismal future, which they're trying prepare for.

The Fallacy Here: It's like saying that if you break a window, it's in part a good thing because it keeps the window repairman in a job. But the fact is, if you didn't break that window, you would have had the money you paid to the repairman to use for something you wanted rather than had to pay for. Having that extra money rather than having to pay for the repair of you window would improve your standard of living.

It's like saying that Katrina was in part good because it employed lots of building contractors. But, as we all know, it was so much more devastating than that - if that hurricane hadn't happened, all those homeowners wouldn't have to spend on new homes and be able to live at a higher standard of living now than they currently are.

This (most likely) recession is essentially an economic Katrina, taking people out their homes (foreclosures), keeping business from growth (less available capital and credit), and resources now having to be spent to clean up the mess and repair the system (the bailout, coming to cost 2 trillion+).

The rise in spending at these thrift stores is an indication of people's fears about the economy. This shows that this rise is only because of damage to many people's incomes (the worst), people predicting that their income or standard of living will decrease in the future (preparing for the worst), and the economy as a whole is slowing down (the reason behind the worst happening).