[marketcorrection] Don Boudreaux: Some Basic Economics

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Posted by Don Boudreaux:
Some Basic Economics
http://marketcorrection.powerblogs.com/posts/1195413454.shtml


   3 April 2007
   News Editor, USA Today
   Dear Editor:
   When criticizing Circuit City's decision to lay off many of its
   employees, you miss two crucial facts ("Circuit City's harsh layoffs
   give glimpse of a new world," April 3).
   First, Circuit City is responding to consumers. As electronic products
   become less expensive and easier to use, consumers have less need for
   on-site personal service. This fact is one reason why consumers buy
   increasingly from on-line retailers.
   Second, the money that consumers save by buying on-line doesn't
   disappear. Each dollar is either saved and invested or is spent on
   goods and services that previously were too expensive for most
   consumers. Either way, the economy grows.
   Second,
   Sincerely,
   Donald J. Boudreaux