Listen to what this Moron just said,
"‘Raise prices,’ said (CEO) Ara Hovnanian. ‘Buyers aren’t buying because they think you’re going to lower prices again. There’s interest but there’s fear. Raise prices 3-4 percent. And quit giving discounts.’"
For those of you who don't know him, Ara is the founder and CEO of Hovnanian Enterprises Inc., a publicly traded homebuilder. This is no small concern, touting a $1 billion market cap. Of course it used to be three times as big - at least on paper.
Well Ara, is obviously an idiot; he believes he can stand the laws of economics on their head and get the mythical buyers to step up simply by raising his prices.
Y'all ought to try this. Go into a job interview and demand an exorbitant salary - that's the key to getting hired!
In his defense, if a homebuilder, real estate agent, or battered home seller is going to fantasize about buyers bailing them out, then why not dream that they bail you out at loftier prices?
1 comment:
The "raise prices" prescription only makes sense using Keynesian economic (anti-)logic. The idea, as George Reisman pointed out once, is that "we're poor because we're rich" according to the Keynesians... we need to soak up that excess supply (since deflation/price decreases are supposedly ECONOMICALLY DISASTROUS). One way to do that would be to have the government tax the crap out of everyone and then start building pyramids. Another way to do it would be to print lots o' munniez. An equally moronic idea would be for everyone to just raise their prices! Hey, if everyone raises da pricez, then everyone will get more munniez!
Keynesians can manipulate data tables and graphs all day long if they want, that still won't get them past the law of TWISATWINS, something Frederic Bastiat figured out over 150 years ago.
Sales have been slow at all my dad's dealerships lately (low-end and high-line brands). I'll have to clue him in that people WANT to buy, but they're just waitin' for discounts, and all he needs to do is raise his prices to start collecting his munniez.
Oy vey!
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