Thursday, October 14, 2010

Creative Destruction and Consumer Sovereignty

4. List of defunct airlines of the United States.

These lists provide lots of evidence of: a) the discipline of the market, b) consumer sovereignty, c) consumer greed, d) creative destruction, e) the dynamism of the U.S. economy, f) the effectiveness of the profit and loss system, g) entrepreneurship and innovation, and h) intense global competition, among others.  


At 10/14/2010 9:44 AM, Blogger Buddy R Pacifico said...

It is interesting to see the demise of the "five and dime" stores in the defucnt list. Were these stores replaced with Dollar type stores as a result of the ravages of inflation? :)

BTW, if you ever drive the backroads of the South you will notice one of the Dollar (Family, Dollar and Dollar General) stores in just about every little town.

At 10/14/2010 10:28 AM, Blogger Jason said...

A&P used to be the #1 grocery store in the US. Now it's #34.

At 10/14/2010 10:33 AM, Blogger morganovich said...

it would be interesting to add all the companies that SHOULD be on this list in as well.

GM, chrylser, numerous airlines, etc.

it's interesting that you never see a supermarket or a retailer get bailed out.

why is transport so different?

At 10/14/2010 1:08 PM, Blogger Benjamin Cole said...

Makes you wonder about owning non-dividend paying stock--sooner or later, your company will be on the trash heap too.

At 10/14/2010 1:09 PM, Blogger Benjamin Cole said...


Dollar stores rule. Another reason why the CPI overmeasures inflation.

Internet sales, dollar stores, living in warehouses, trailers, eating dogfood, Americans are alerting lifestyles to lower cost alternatives....

At 10/14/2010 1:39 PM, Blogger Benjamin Cole said...

The French are wealthier than Americans?

And get to eat better food?
And get national health care?
And get eight weeks off?

Waa-waa-waa, it ain't supposed to be this way.....

At 10/14/2010 2:00 PM, Blogger Jet Beagle said...


I think concentration of employment and unionization are important factors. Retail companies rarely have thousands of employees in a single Congressional district. Airline HQ cities, on the other hand, have thousands of office employees plus thousands more based at the nearby hub airport. Congressmen and senators are influenced by such concentrations of voters.

At 10/14/2010 2:09 PM, Blogger Jet Beagle said...

By the way, Morganovich, I don't think most of the airlines wanted a post-9/11 bailout. As I recall, only four airlines even applied for any of the $10 billion loan money, and only two received loans.

United and American wanted protection from lawsuits related to their terrorist-caused crashes. But they and the rest of the industry were forced to go along with the initial $5 billion bailout. That's because U.S. Airways (Arlen Specter) and America West (John McCain) were facing imminent failure. Once Congress voted the $5 billion no-strings grant, no one was going to refuse their share.

At 10/14/2010 5:15 PM, Blogger PeakTrader said...

Why Europeans Work Less Than Americans

Europeans pay a price for their extravagant leisure. The average Frenchman produces only three-quarters as much as the average American.

Between the 1970s and the 1990s, the U.S. marginal rate (inclusive of payroll taxes) stayed fixed at about 40%, while the French rate rose to 59% and the Italian rate to 64%.

(Conventional wisdom) A 20% increase in your marginal tax rate is more or less the same thing as a 20% pay cut.

One trio of economists (Ed Glaeser of Harvard, Bruce Sacerdote of Dartmouth and Jose Scheinkman of Princeton) offers this explanation: When your wages are cut 20%, you take more vacations. But when your friends' wages are also cut 20%, you'll take even more vacations, because vacations are more fun when you've got friends to share them with.

So a 20% across-the-board tax hike, which affects both you and your friends, yields a more dramatic response than a 20% cut in your own wages.

At 10/14/2010 6:21 PM, Blogger PeakTrader said...

"In 1986, the first Dollar Tree store (then called Only $1.00) opened in Dalton, Georgia."

When will they call it the Dollar Ten Tree store?

At 10/15/2010 6:48 PM, Blogger VangelV said...

The French are wealthier than Americans?

And get to eat better food?
And get national health care?
And get eight weeks off?

While I am a big fan of the French lifestyle I do not believe that this is entirely true. The French spend much more of their income on food than Americans and have fewer dishwashers, refrigerators, DVDs, PCs, washing machines, etc., per household than Americans do. They are less mobile because they pay more for their gasoline, automobiles, and transportation related fees.

As for the French healthcare let us note that it is a two-tier system. The poor get a basics only system that would lead to massive lawsuits within the United States. The poor get the best system that they can afford.

Let me note that the US is no longer to be considered a good representative of free market capitalism. The US military-industrial complex takes up a very large chunk of the American budget and the US government has virtually nationalized huge swaths of American business. Like France and other European nations, the US has a major problem with unfunded public pensions and social security systems. They are all about to come tumbling down like a house of cards and few Western countries will be left standing with their high standard of living intact.

At 10/17/2010 4:08 PM, Blogger Unknown said...

Too bad Bank of America, Citibank, Wells Fargo, & JP Morgan Chase are not on the list as they deserve to be.

At 10/17/2010 8:44 PM, Blogger VangelV said...

Too bad Bank of America, Citibank, Wells Fargo, & JP Morgan Chase are not on the list as they deserve to be.

Just wait a while.


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