Monday, June 30, 2008

More woes for 4th of July economy

Welcome to another edition of "Signs the economy is bad." We already pointed out how people may be buying less for the 4th of July here. So, what can possibly make things worse? When fireworks, that great prominent part of the holiday, become "a luxury many Americans and governments can’t afford in tight economic times." That is according to a story from MSNBC with the headline "Rockets' red glare to dim this Fourth of July." What is this world coming to when you can't even buy a bottle rocket or a sparkler to celebrate in your own backyard? Even worse, what is this world coming too when your local municipality may not even be able to afford fireworks?

It turns out there is a pretty tight market for fireworks, kind of like for oil. We get oil here in the U.S. from some specific places (link from ABC News). In the case of fireworks, we get most of them from China according to the MSNBC report, which states that "a massive explosion at fireworks factories in China created a global shortage that has driven prices beyond the means not only of many backyard revelers but even of many local governments, forcing them to cancel municipal celebrations." So our fireworks pipeline has just been shut down pretty much. Add to this the fact that various locations are just banning fireworks due to drought conditions and fire concerns, and thus, we get less fireworks. This certainly explains why I have seen less of those little shacks selling fireworks that seem to pop up like weeds around this time of the year. A lot of people just can't afford to buy them.

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