Wally World Opened Last Week

Well, it's here--"super walmart". Apparently, the folks in Bentonville were not satisfied with the amount of money they were sucking out of the Grand Rapids economy, so they had to upsize. And judging by the crowded parking lots, Grand Rapidians were eager to help out.

The new walmart supposedly has everything under the sun for sale inside its monolithic temple to shopping. I cannot actually attest to this from first hand witness account, as I have been "walmart free since 2003". But a drive by glance of the exterior revealed a home and garden center, the regular walmart stuff, a liquor store, subway restaurant, grocery store and an automotive center.

I hope this does not bode poorly for the local businesses that survived the original onslaught from walmart. Can our small city support 4 large grocery stores (Cub, Ogles, Target and walmart)? Kmart seems to be just barely hanging on - I cannot believe they have lasted as long as they have in the face of walmart and Target expansions.

By now you can probably tell that I am not a big fan of walmart. Here are a couple of interesting links that help show how I formed my opinion about walmart:

• PBS Frontline store about walmart
• JibJab Big Box Mart
• Wakeup Walmart

Why Gas Prices Will Continue to Rise...

The price of gasoline has everything to do with demand, and little to do with supply. In particular, it is the price elasticity of demand that is driving gas prices higher.

Our demand for gasoline is what economists would describe as extremely inelastic. This means that as the price of gasoline changes, the demand does not change much. Think about it. The price of gas could drop to 50 cents per gallon, and we would not change our consumption much. Sure, you would go and fill up your tank quickly, but you can only drive so much, and you are not going to burn an extra 100 gallons each week just because the price of gasoline went down. Likewise, a raise in price to $4.50 per gallon would not cause most of us to decrease our consumption much. We are married to our vehicles, and need (sic) to drive about the same this week as next week, even at higher costs.

So, because the supply of gasoline is controlled by an oligopoly, they can charge whatever they want for a gallon of gas, and we will pay it and not make much of a change in our consumption patterns. Granted, there is a breaking point at which Americans will earnestly start consuming, but your guess is a good as mine at what dollar amount that will be.

We certainly are not there yet. Get on a freeway and watch the 6,000 lb luxury gas guzzling SUVs fly by at 80+ mph.

Everyone's and Economist

The purpose of this blog is to provide my thoughts about economic issues facing us in our everyday lives. Some topics will cover deep significant issues, while others will address issues that some might consider trite.

I hope you enjoy reading these posts, and that they evoke some thought and dialog.