It's the new Pottery Barn Rule for our times:
Sears and J. C. Penney, retailers whose wares are aimed squarely at middle-class Americans, are both in dire straits. Last month, Sears said it would shutter its flagship store on State Street in downtown Chicago, and J. C. Penney announced the closings of 33 stores and 2,000 layoffs.Loehmann’s, where generations of middle-class shoppers hunted for marked-down designer labels in the famed Back Room, is now being liquidated after three trips to bankruptcy court since 1999.
The Loehmann’s store in Chelsea, like all 39 Loehmann’s outlets nationwide, will go dark as soon as the last items sell. Barneys New York, which started in the same location in 1923 before moving to a more luxurious spot on Madison Avenue two decades ago, plans to reopen a store on the site in 2017.
Investors have taken notice of the shrinking middle. Shares of Sears and J. C. Penney have fallen more than 50 percent since the end of 2009, even as upper-end stores like Nordstrom and bargain-basement chains like Dollar Tree and Family Dollar Stores have more than doubled in value over the same period.
None of this needs to be happening, and it's not happening because of some invisible hand or some market correction but as a predictable policy outcome. If we want to avoid being turned into a nation of vassals and lieges, we'd better think about changing the policy. And if our policymakers won't listen to our suggestions, they too will need to be replaced. But neither our lieges nor our job creators can feign ignorance---"How did we ever get to such a sorry state?"---because this is the world that they've created together. The rest of us, essentially, are tenant farmers in it.
---Baron V
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