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Recently, my wife heard a kitchen installer bemoan his economic fate on a local talk radio show. A job that netted him $10,000 a year ago, now goes for $4,000. This shows that the economy is not discounting goods and services. It's correcting prices.

The installer will never get $10,000 for that job ever again. How could he since he's willing to accept less than half the original price? The same thing holds true for the automakers. Every consumer with good or decent credit will now insist on zero-percent financing. How will the automakers -- especially the embattled Big 3 -- be able to afford these incentives? Is it any wonder that one in 30 new car dealerships are expected to fail this year with another 1,000 expected to shut their doors in 2009.

Retailers are offering huge bargains early in the holiday season to entice cash-strapped consumers. The problem, though, goes beyond this expected dismal season. Consumers are getting used to paying less and getting more and will not be satisfied if they do not get what they want.

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Price discounts: Good for consumers; scaring economists originally appeared on BloggingStocks on Thu, 20 Nov 2008 12:42:00 EST. Please see our terms for use of feeds.

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