How often do you hear a QVM trader say "People just haven't
got the money to spend"? Well that seemingly vague and pointless comment
has now got support from a major international company and a solution to this
problem may be found in the actions of one of our former Prime Ministers.
According to an article in the Harvard Business Review, Hersheys
(one of the world's largest manufacturers of confectionary) was blaming its
lack lustre performance on one major factor. It said that the average person
was simply too poor to buy their products and allow their company to grow. You
might remember that Cadbury in Tasmania recently decided to make its chocolate
bars smaller rather than increase prices for similar reasons.
So maybe this "no money" thing isn't just a casual
observation but one born from a stagnating world economy where people work
harder and longer, and spend more of their income on mortgages and health care
than ever before. The answer in the HBR article was for central banks to
suddenly give everybody a big injection of cash. How silly is that?
But, hang on, isn't that what Kevin Rudd did immediately after
the GFC? Back in 2009 a government stimulus package gave every Australian up to
$950 as a cash payment. Many people felt all warm and fuzzy over that decision
and went out spending. That was 6 years ago. There was a lot of debate about
the effectiveness of the stimulus in the aftermath but some heavy hitting
economic commentators said it did help avoid a recession. Maybe it is time for
another official government stimulus package. I want to feel all warm and fuzzy
again and buying a chocolate bar will be high on my list of purchases.
