I look around and notice that firms have not cut back on their advertising and promotions. During a recession, the economic slump would feel quite pronounced, i.e., incomes would be falling, people would be losing jobs left and right, corporate profits would be tanking, and the economy would feel, well, depressed. In a recession scenario, it would not be the best time to throw advertising dollars to the wind in order to promote products like candy bars and plane travel.
I deduce that since many firms are engaging in heavy advertising schemes, then we are likely not in a recession.
As you know, I live and work in
As an economist and based on my anecdotal evidence of the continued flow of advertising dollars, I deduce the
Econ 101 teaches us that advertising is a sunk cost. It does not buy anything except possible market share, or new customers, but that is certainly not guaranteed. You will see big giants like jetBlue advertising incessantly in order to steal customers from Southwest. Certainly if corporate profits were falling precipitously, then managers would be more concerned with paying their employees, rather than buying advertising rights.
Oh, oh, I shan’t forget the Democrats…of course. I think that this is a great opportunity for some good old government intervention led by John Kerry, the Chairman of the Senate Committee on Small Businesses and Entrepreneurship. He should be appalled that the small guys, JP Licks (local
I wish to hear your thoughts and opinions, so please leave a comment. Best, Nontruths