The Underreported Story: The 99 percent loses, Wall Street wins... again
This week, discount store 99 Cents Only sold for $1.6 billion dollars. Unless you're an avid fan of the business section, you probably missed this announcement. But as Salon writer Andrew Leonard points out, there's more to this than the sale of one chain, and it has a lot to say about who is benefitting in this economy.
Where the 99 percent shop
In a bad economy, consumers look for ways to be frugal. As the recession lags on and consumers continue to feel the effects of unemployment, debt and rising prices on essentials, the hunt for ways to stretch a dollar becomes even more paramount. Discount stores like the 99 Cents Only store suddenly become an option for things like groceries. In response, discount chains have begun to respond, opening new locations and sprucing up stores to attract a new clientele looking for cheap, generic options.
Bad for consumers, good for retailers... and Wall Street
The economy may be hitting shoppers hard, but discount retailers have reaped benefits from the economic woes hitting the average American. In the case of the 99 Cent Only store, the chain has gone from roughly 120 stores in 2002 to 285 in 2011. A look at the source of profit is also telling -- shoppers aren't just looking for a good deal on non-essentials. Food and grocery items made up 54 percent of the 99 Cent Only stores sales in 2010. Now, the chain has sold for $1.6 billion, and earned a mention the Wall Street Journal's "hot stocks" list. So, while many Americans are busy searching for the least expensive way to buy milk and eggs, shareholders are seeing stock prices trend upwards and Wall Street celebrates.
Why it matters
As Salon notes, if you want to understand what the Occupy Wall Street protesters want, look at news like this. While politicians in Washington are stalling on measures that could create jobs because they call for higher taxes on the wealthy, the rich continue to see increased profits. The majority of the country is suffering in a bleak economic climate with high unemployment and scraping by as they hunt for the cheapest possible way to get food on the table, and the discount retailers and Wall Street are all too ready to capitalize on the desperation.
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irmarobinson
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The day of of reckoning is fast approaching>>The first shall be last and the last shall be first. Treat others the way you want to be treated........PEACE!!!
- 4 months ago
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irmarobinson
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stupid
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The writer of this story is a flipping moron. There is a need for an OWS-like rally, but this mentality is just stupid. It's morons like this writer and "incredulous" who are bringing the country down. U think it's this rich v. poor war. U r too blind that it is the govt who is pulling the strings. There are a few large multi-national corps whose execs, along w/bankers such as the IMF, Fed Reserve and EU Bank who rule the world. U guys want something for free and everything equal. News life...life is not fair and equal. We ALL have equal opportunity....make of it what you will. How dare you try to tell someone how much they can make. If a company wants to pay an exec $100m and can justify it based on profitablity, that is there business so as long as it's not a company like CITI or BOA who got billions of taxpayer dollars from bailout...I have an issue with that. These are the dangerous companies. But you use these few to justify wanting to "tax the rich." This is an idiotic, flawed logic because at the end of the day, tax on law on
"the rich" only effects the middle class and small biz
BTW "incredulous" why would a bank charge the same rate on an auto loan to someone who can't make ontime payments vs someone who is always on time?? U may not like it, but they are a biz too and just because they "have money" doesn't mean it is your right to get the same rate. that is the stupidest argument i have ever heard. Lastly, credit has very little impact on your rate. And yes, credit plays a role is determining the risk of a client...like it or not.Another sheep wanting something for free because you are too lazy to improve your life and are too busy making excuses with your broke mentality, listening to Barry O and is f'ing jobs plan and doomsday theories about the boogeyman and how bad things are.
Get a clue - 4 months ago
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stupid
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KB99percent
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stupid:
How dare you. There are people out there NOT born with opportunities as you claim. People who are born with disabilities and people born into money you cannot compare the two. Just like when a celebrity gets cancer or AIDs they have top doctors from around the world to treat them while a person from middle class with cancer has to work their ass off just for a treatment that isn't half as good as what the rich get. My father was born with clubbed feet and has worked his ass off his whole life to try to stay out of debt and is still falling under. Last time I check Middle class and small business are what make America a country! You think these people out in the OWS want to be out their being beaten and pepper sprayed by police? NO but alot of them dont have homes to go to because banks raised their interest rates or in the case of Chase and other big banks 'robosigned' and illegally foreclose 100s of homes. Credit is just a excuse to put a dollar worth on peoples heads and telling them they have to pay more when they fall on hard times. BTW why do rich people have to be so greedy? I know at least 100 people in middle class who would be willing to go above and beyond for their fellow human being yet the rich cant help out a little bit more because they have a bigger piece of the pie? Yeah right sound reasonable because middle class doesn't do anything right... God bless you and your ignorance toward the middle class
- 4 months ago
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KB99percent
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Incredulous
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stupid:
your intellectual capacity clearly fits your screen name
and in answer to your "stupid" question about what rate a bank would charge, put down the bottle, or the pipe, or whatever it is you are consuming, and try to think your way through this.
1. Insurance is not a bank lending money. It is, largely, a huge profit-making institution that has managed to get Congress to create laws that ensure the profits of the insurance industry will remain huge.
2. Car insurance has been mandated by Congress, and then on down the road, Congress gave insurance companies the right to base a person's auto insurance rate on their credit score, not their driving record. WRONG!
3. God, you really are stupid.try not to spend so much time underneath the car sucking up the fumes....
- 4 months ago
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Incredulous
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Incredulous
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Nicely done, I appreciate reading this, and the links to the Salon piece. I think this sort of thing has gone on for a long time, but we are only beginning to notice it more now, because so many people in this economy have been hit.
I have a friend who, after an operation, refinanced his car because he could no longer afford his payments. The finance corporation was eager to accommodate him, even though he is living on a fixed income as he is completely disabled. They have been charging him 29% interest. How is this helping him? And yet, the underwriters for his refinance are making money hand over fist.
I see a similar trend in auto insurance. People's premiums are now based upon their credit scores, and if you are poor, or have been sick, or simply don't make much money, you are going to pay a higher premium. And who made all of this legal and removed any and all protections for the poor, the sick and the weak members of our society?
Both parties in Congress, that's who. Not the Republicans without the Democrats, both of them. I can hardly wait to see how they are going to manipulate the poor in America with mandatory health insurance....NOT!
- 4 months ago
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Incredulous
