As BBC and CNN report (and as Jeff Tucker blogs below), Krispy Kreme’s stock plunged when investors found out that the low-carb craze is affecting doughnut demand. This is unacceptable.I know free traders will say that this is clearly good. After all, meat prices are rising. Butchers, cattle ranchers, and grocers all around the country benefit from the fact that people substitute away from simple sugars and toward protein-laden meats. Soy farmers are doing better, as well.
This ignores the most important points. Honest, hard-working people are going to suffer. What of the Krispy Kreme stockholders whose hopes and dreams have been wiped away like so many flakes of dried sugar from a tabletop? What about Krispy Kreme’s suppliers? What about Krispy Kreme employees?
Most importantly, what about all the health care professionals (and people in med school and nursing programs)? If people curtail their consumption of simple sugars and instead eat more protein, monounsaturated fats, and complex carbohydrates, they may not have a variety of obesity-related illnesses to generate demand for their services. But won’t this be good for the economy? No, because of three simple words:
INSUFFICIENT AGGREGATE DEMAND.
So, gentle reader, I urge you to go to your nearest Krispy Kreme and buy a dozen custard doughnuts to go. Failing this, write your congressman and let him know that a full-fledged federal bailout may be in order. Do it for yourselves. Do it for your children. Do it for America.
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Here in Canada doughnut sales are dropping too. Not soley because of Atkins; but because national obessesion Tim Hortons (a popular doughnut chain) stopped making its doughnuts fresh. Not they are made in a factory in the middle of Canada and trucked throughout the country. Blech.
In my household, donut consumption is holding steady (just doing our fair share for the greater good, Art), while other related, but non-commercial, measures continue to climb.
Prices of donuts have been dropping because of the many stalls opening up, resulting in tough competition.
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