Sunday drive-by grassroots economics

Lynne Kiesling

Idea courtesy of Paul Kedrosky, who posted a list of on-the-ground observations of economic activity. Yesterday I spent a couple of hours browsing and running some errands at my nearby suburban mall, and both the vehicle traffic there and back and the foot trafffic while there seemed light. But by the time I left at 1:00 my level of the parking deck was full.

The shops seemed pretty busy, especially Nordstrom, and there are some early spring deals out there (I got a super-cute top at Martin & Osa at a very good price!). But what was most striking was how crowded Forever 21 was! The line for the fitting rooms was about 25 people when I was there, and everyone’s arms were laden. Then they only had three people working the checkout, and there were about a dozen people waiting to check out, most of whom were buying multiple items.

I have three hypotheses for why Forever 21 was so busy:

  1. It’s inexpensive “disposable fashion”, so when people trade down from other, more pricey shops, they shop at Forever 21 (same argument for H&M)
  2. Its target market is adolescent and young adult women, whose discretionary spending may be less sensitive to recession than other spending
  3. It’s Easter/Passover weekend, and I overheard several conversations between moms and their daughters who were home from university for the weekend

Can green bank proposal pass the laugh test?

Michael Giberson

The Houston Chronicle has an article on a proposal to set up a federally-chartered bank to lend billions of dollars to renewable energy projects.

Renewable energy ‘green bank’ idea takes root

By TOM FOWLER Copyright 2009 Houston Chronicle

A coalition of energy companies hopes to reinvigorate the market for funding renewable energy projects by creating a government-backed “green bank” to serve as a conduit for billions of dollars in federal loans.

Under the plan, outlined in federal legislation sponsored by Rep. Chris Van Hollen, D-Md., the bank would be an independent, wholly owned corporation of the federal government focused solely on loaning money to a range of projects deemed to promote clean energy.

I might have had something intelligent to say about the proposal, but I started laughing too hard  at the phrase “independent, wholly owned corporation of the federal government”.

While I can’t imagine that the federal government is better suited than the banking and investment community in lending to renewable energy projects, my lack of an imagination is not a critique.

I really don’t have anything to say about the substance of the proposal, I just can’t get passed the “independent, wholly owned corporation” part.