Yglesias

Luxury Goods Rebound

CREDIT:

Nobody really wants to read about how amidst continued misery for the bulk of Americans, sales of luxury goods are sharply accelerating. But I do think the key sentence in the piece is this one (emphasis added): “Luxury goods stores, which fared much worse than other retailers in the recession, are more than recovering — they are zooming.”

You would want, and even expect, the lines of business that had especially sharp contractions to have especially sharp rebounds. Meanwhile, luxury goods stores are a source not only of luxury goods but also of jobs for retail and goods transportation workers. This is a legitimate path to recovery. More jobs for these workers leads to more housing demands leads to construction recovering from its current doldrums leads to more tax revenue and an end to state/local cutbacks and now you have a firmer platform for overall demand for goods and services. The problem is that with markets plunging all over the world this week, it looks like there’s a great chance that this whole cycle will be nipped in the bud.