April 19, 2017, - 3:13 pm

EXCLUSIVE: Obamacare Shares Blame for Macy’s, Other Retailers’ & American Malls’ Declines

By Debbie Schlussel

Obamacare’s skyrocketing premiums and high deductibles may be partially to blame for the recent declines of American department stores and America’s malls.



When my late father was alive, he always encouraged me to question conventional wisdom and fight against piling-on crowds of groupthink. And so it goes with the widely accepted chorus of claims that the reason major retailers in America–and the malls in which many of them are found–are dying is solely based on the rise of online shopping and Internet giants like Amazon.com and Walmart.com.

A couple of weeks ago, I picked up a fixture I bought at the Going-Out-Of-Business Sale at the last Kmart store in my area. As I was deconstructing the item with my tools in order to fit it into my car, I lamented the fact that, while there once (and not too long ago) were five Kmarts within 15-20 minutes driving time from my residence, there are now only five such stores anywhere near me, and “near” is a relative term. They are all at least 45 minutes away by car. It’s true that Edward S. Lampert, who bought Kmart and Sears and made a mess of them, helped drive both retailers into the ground, when they could have been updated and re-imagined as the next Targets. Still, Target is not doing as well as it once was. And everyone is blaming it on the Internet and online shopping. That couldn’t be the only reason, I thought to myself. Surely, the Obamaconomy didn’t operate in a vacuum. Nor did families paying thousands of dollars more a year in healthcare premiums due to the awful, statist healthcare program Obama imposed.

And my view is borne out by some of the figures. Information and statistics show that at the same time healthcare spending in America went up as a percentage of total spending, shopping at these stores went down, and Americans are buying less clothing, shoes, and accessories. This week, Justin Fox of Bloomberg News reported that the shift from retail spending on goods to spending on services, especially healthcare costs, is huge.

Health care is by far the biggest contributor to this move from goods to services — spending on health care services has gone from 3 percent of personal consumption expenditures in 1929 to 17.2 percent last year. Spending on pharmaceuticals made up another 3.8 percent of personal consumption in 2015. (Government spending data for narrower categories isn’t available for 2016 yet.) . . . Outside of health care, there are a few other services that we’re spending lots more on than we used to. . . .

Economist Angus Deaton has been making headlines lately with his argument that the U.S. economy is being distorted by health-care and financial sectors chock full of “rent-seeking” firms that enlist the help of politicians to maintain big profit margins. Maybe that helps explain why spending on those categories has gone up so much — and why retail has been struggling. . . . There’s all that money going to health care and financial services — $3.1 trillion in 2016. Surely some of that could have been spent on shopping instead.

Hmmm . . . remember when Barack Obama told us (among other “candy” that perpetually rained from his pinata of lies) that his healthcare plan would reduce spending on and costs associated with healthcare and make it more affordable? Notice how the Bloomberg reporter, Justin Fox, does every contortion in the book to avoid saying it: Obamacare. But his references to healthcare say it all, since Obamacare is the only game in town in American healthcare these days and has been for a few years already.

A family budget is generally a zero sum game. Where spending on Obamacare premiums for most middle and upper class American families went up, the difference had to be made up elsewhere in spending less on other things, such as clothes, shoes, accessories, etc. Moreover, you see more and more people who used to shop retail for those items, buying them at resale shops and places like Salvation Army, Goodwill, and Value World.

Online shopping has been growing at a steady pace since the Internet began. Given that steady rise, the retailers in trouble now might have faltered years ago. But they didn’t. The acceleration of the failure of clothing retailers, department stores, and malls which house them really picked up as Obamacare was implemented.

You could argue that stores like Kmart failed to update and keep up with the times, lifestyles, and shopping habits of American consumers. And that certainly is a factor in the closing of Kmart and chains like The Limited. Also, it would be blind not to notice that Amazon’s and Walmart’s sales each exceed three percent of total retail non-grocery non-convenience-store, non-gas-station purchases in America. But it cannot be those things alone which have led to the deaths of American retail stores and malls–whose main merchandise is clothing and accessories.

Further, in addition to the rise in costs under Obamacare, there is another reason why malls (and the stores in them) are failing, which has nothing to do with the Internet. The reason is . . . newer malls. Today’s Wall Street Journal reports that a study of dying malls found that this is a far bigger reason (than online shopping) for the decline of malls in America.

Internet retailing is eating into mall revenue, but competition from newer shopping centers was the most common cause of death for malls over the past decade, according to a study of 72 such properties.

So, let’s see, newer shopping malls and less money to spend at either because . . . your family is spending a larger chunk than every to pay for Obamacare. Yup, the same Obamacare that is, unfortunately, nearly a third of a year into the Trump administration, still the law of the land.

If you went back to your old pre-Obama healthcare plan or if we all went back to a market-based, pay-the-bill-out-of-your-pocket method of going to the doctor and the pharmacy, Americans would have more money to spend at the mall.

It’s great that Barack Obama is gone from the White House. Sadly, Obama’s policies keep on killing America, well after he’s left 1600 Pennsylvania Avenue.

And he’s at least in part–a major part–to blame for the death and destruction in American retail.

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29 Responses

The principles behind Obamacare – government dictating what insurance to get or what care to get – are eerily similar to my situation in the co-op where I live. Years ago, the management company administering the co-op imposed a homeowners’ insurance of their choosing for every shareholder (formerly tenant) to purchase and did not allow us any time or opportunity to search for a better or more affordable home insurance policy. And guess what? Like with Obamacare, the homeowners’ insurance I have goes up and up every year.

Concerned Patriot on April 19, 2017 at 3:31 pm

    You obviously know nothing about the ACA and how it works.

    Larry Weir on April 24, 2017 at 3:31 am

Right, Debbie, think for yourself. We’ve lost the art, ability, and even the PERMISSION to do that in this “once great republic.”

That’s a staggering difference. 3% in 1929, and if one adds the two figures, 17.2% PC (personal consumption) for health care costs, and 3.8% for pharmaceuticals, that’s 21% of PC costs. That’s 7 TIMES more than 1929. In 1929, you can bet that “pharmaceuticals” were probably some cheap bathtub gin, or throw some more garlic in the pan, LOL!!!

Makes a lot of sense. Plus, The Community Disorganizer In Chief said that everyone was going to have some skin in the game.

Well, there it is, your skin is in the game, . . . along with an arm and a leg.

Alfredo from Puerto Rico on April 19, 2017 at 3:37 pm

The other factor behind increased health care spending is an increasingly aging population.

Older people need more prescription drugs, preventive checkups and other health care services. Which drives costs up.

Who is subsidizing all this? The few young Americans still around to pick up the slack.

And Obamacare made all that worse.

NormanF on April 19, 2017 at 5:01 pm

And the worst part of Obamacare is the redistribution of income to illegal aliens, bums and loafers, and welfare cheaters.

That will never change. We may get a few cosmetic changes to lower a few premiums slightly, but the massive redistribution of income will stay with us.

Little Al on April 19, 2017 at 5:23 pm

    The level of ignorance in these comments is mind-blowing. Illegal alien are not allied to have Obamacare.

    Larry Weir on April 24, 2017 at 3:08 am

      Wrong! Lots of illegals have managed to get SSNs and file taxes. And with the mandate they have no escape from Obama care if they file a return. The ACA is the fascist wet dream and a perfect example of “damned if you do, damned if you don’t – you either pay through the nose for Obamacare’s slim offerings or you are penalized by the IRS, you get nothing, and you end up having your wealth redistributed. And illegals certainly are “allied” to have Obama care.

      Richard on April 24, 2017 at 4:51 pm

Hi Deb!

Long time; no see. 🙂

I explained this to a young co-worker fresh out of college the other day. Here’s my basic thesis: BY DESIGN, OBAMACARE COULD NOT LOWER HEALTH CARE COSTS BECAUSE DOING SO WOULD HAVE CAUSED AN INSTANT RECESSION.

Sorry for the caps. I’m not yelling; just highlighting my thesis which is intuitively obvious to most of your readers.

I checked this before writing this article and was shocked that health care not accounts for 17% of the US GDP. Back when George Bush was President, the accepted number was 15%. This hardly matters. What matters is that if O’Bamacare had lowered health care costs, it would have squeezed profits of mega-healthcare corporations, pharmaceutical companies, medical/surgical instrument companies etc. Their stocks would have plummeted and tanked the stock markets.

Doctor, nurse and healthcare workers’ salaries would have been squeezed, choking off spending (at retail stores) and causing additional ripple effect through our economy.

Thus, unless O’Bama and the Democrats wanted to aggravate the recession they inherited (and did their fair share to cause), they could not reduce the cost of health care. Reducing health care costs would have stalled whatever economic recovery we have had since 2008.

While health care costs take a larger chunk of our economy, other sectors suffer. I agree with your thesis that this contributed to the demise of retailers. Let’s be clear, we can’t always wait 3 to 7 days for Amazon to deliver things that we can buy at our local store. Conventional retailing is not obsolete.

The way to make healthcare more affordable is to shrink its share of the GDP. On this, I am happy to see President Trump talking up reviving the American domestic manufacturing base. Unfortunately, he too has expressed interest in sticking his hand into an effort to drive down health care costs. Yes! There are some things we can do to make for a more economically competitive system in health care. Beating up on a 17% sector of our economy is counter productive. So the new President has good news and bad news. But at least there’s SOME good news.

The Democrats knew they weren’t driving down health care costs when they authored O’Bamacare. What they wanted to accomplish was making the health care system a mechanism for transfer payments (i.e. class warfare) where the upper middle class would suffer; the poor get a few crumbs, and the super-rich (who never had a problem paying for health care) got even richer… so they could make campaign donations to Hillary and the old fart (I forget his name.)

The average American (especially the 18-35 crowd) don’t understand the simple facts of life. You can’t grow an economy by forcing a mammoth portion of it to make less money. I mean… DUH!

It’s time to get serious about trade barriers. High tariffs were a trademark of the Republican Party from the time of Lincoln thru the time of Reagan. It was George Bush Sr. who let us believe that “Free Trade Agreements” are a free trade policy when nothing could be further from the truth. The early Republicans readily understood that America couldn’t have free trade if we didn’t have barriers that restricted trade from a world of countries ruled by tyrants.

Today, our own government is adopting the habits of tyrants. The laws of the land are enforced selectively. The middle class is being squeezed harder until it dies.

What people need to LEARN is that O’Bamacare was a scam to begin with. Its authors could not drive down healthcare costs without causing a recession. It’s intuitively obvious!

I said it back in 2008: “Hope and change???? You better HOPE you have some spare CHANGE in your pocket when these creeps get done with you!”

Your column helps demonstrate that point; long forgotten though it may be. Thanks for writing that column.

Sincerely,

There is NO Santa Claus (aka TINSC)

There is NO Santa Claus on April 19, 2017 at 6:41 pm

    First, your handle might burst a bubble for some, but I figured out the Santa Claus thing when I was around 8 or 9. The free lunch thing took longer, but that’s economics.

    Second, Obama isn’t Irish, no need to hyphenate.

    And Third, good post.

    Richard on April 24, 2017 at 4:55 pm

While I have nothing against online stores, the only thing I think they are right for is software or music. For anything physical that I have to touch and feel, I prefer going to an actual store.

One reason I think online stores are kicking the butts of brick & mortar is not so much prices or killer deals, but rather, variety. I have sometimes looked for quite few things, and have been forced online simply because the things I was shopping for wasn’t there. Some stores, like Costco, are notorious for stocking some items temporarily, but letting it disappear after a while, when a real need might arise. And some simply don’t have the variety that’s needed.

Also, almost, if not all, these malls have an online presence as well, and their malls would only be a slight overhead over the Amazons, and besides, would double as stocking houses for inventory. So ascribing their decline to simply the online fad doesn’t explain it. What does explain it is that in too many cases, they just don’t have the breadth of products. If I want to buy something, chances are high that I’ll find it on Amazon. However, if I try Sears, Walmart, Costco – their online stores – I’m likely to hit a brick wall.

I do believe that Obamacare shares much of the blame, but even aside from its assault on employment, Obamacare has totally f*@%ed up the healthcare system in this country. Ten years ago, at work, we had flex plans which we could use to supplement our insurance, and whose only drawback was that we couldn’t carry it over year to year. Now, few companies seem to offer it, if it’s even there, and hence all the bellyaching about its going away. What I don’t get is people who concede that it’s so expensive that all their expenses tend to be out of pocket as a result of the high deductables, but are still outraged if repeal is not accompanied by replace.

The other issue is that as the #avenues to pay doctors dries up, there will be fewer and fewer of them. Which I suspect there already are, given the long wait times when one wants to undergo a routine checkup

Infidel on April 19, 2017 at 11:21 pm

Hi Dear Debbie and thanks for sharing! i had no clue at all thanks for letting us know very sincerlly! Tirdad.

TIRDAD GHARIB on April 20, 2017 at 7:50 am

The first three comments are spot on. Blame should also be a fixed to Chief Justice John Roberts who re-wrote the “law” at the judicial level to make it a “tax” in order for it to be legal. You really can’t blame Democrats, because by definition (and espoused) they are totalitarians.
Ozero and his minions who are still remaining, including the numerous liberal “judges” (who are in quotes because they do not use the law), have done more to ruin/defeat the US Constitution than any communist country, including the Soviet Union, Russia, China, etc. All the lawlessness, national security, foreign policy issues, the economy, and ESPECIALLY personal privacy invasions, all lead back to the Ozero administration.

unholyone on April 20, 2017 at 8:03 am

Since that crypto-Moooooolim, marxist freak left office on 1/20/2017, he’s been chillin’ with millionaires & billionaires EXCLUSIVELY. While in office, he & his Wookie-Wife looked down on and criticized that lifestyle but the Obama-Putins are potentates and also live like ’em…so they have been livin’ wicked large and rich since January (I’d like to know what Obama-Putin did on that he-man Island with all them boys….). The problem are the people who LOVE them and support them. How can you love & support such un-likable hypocrites? Obama-Putin wouldn’t even give his fellow Donks the time of day when he was POTUS. People love the lie and love to be tricked in 2017. It makes me sick! Obama doesn’t like ANYBODY…he a malignant narcissistic malcontent.

And since NOV 2016, Donks have gone stark, raving mad RE: President Donald Trump. The Trump Derangement Syndrome should make me laugh but it really doesn’t. It annoys me. It’s like being around heaps of idiots who can’t recognize the truth if it bit ’em on their big, ugly noses and all the stuff they HATE about Trump, they LOVED about Obama-Putin and any hypocrite Donk. Their new hero is that freak Maxine Waters, who stole James Brown’s wig straight from his coffin…that old crone is an absolute freak and lies as stridently as Obama-Putin.

Even with the Obama-Putin’s gone it is STILL bizarro world. I just don’t get it. This disgusting media is so butt-hurt about Trump (who hasn’t been 100% great (who has?) but has been better than I ever expected…) yet they didn’t mind the same transgressions in Obama-Putin…like with golf and stuff like that. Everyday on Yahoo News some Libtard is whinging about something Trump did but they never, ever called Obama-Putin on his crap and indeed protected him and never reported the TRUTH about him to begin with. Even though I am not the biggest Trump fan it sometimes makes me wanna defend him because it just wasn’t fair how they protected and aided and abetted Obama-Putin from 2008-2017!

I can’t stand it. People will ALWAYS show you who they really are and those disgusting potentates Obama-Putin’s are showing you their REAL desire by hanging with exclusively millionaires and billionaires. I don’t wanna hang with poor peeps but I also don’t act like poor peeps are my #1 concern like these lying Donks do! It’s so effing odious! They are never called on it and it just boils my blood!!!

Plus the GOP in the house & senate don’t help either. Big-ass wimps. The Donks fight tooth & nail for what they want ALWAYS but we have the limp-dick GOP Republicans always willing to compromise with these nasty Donks. It’s pathetic to behold!

And Crooked Hillary almost won. That don’t sit right with me. Now there is gonna be a tell-all book that shows all the ugly chaos and pathos in that campaign that we knew existed all along. I would have rather known about it THEN than NOW.

This country is still full of stoopid effers! It’s too stoopid and crass for my liking!

Skunky on April 20, 2017 at 6:26 pm

Yes, discretionary income is limited, even in more prosperous times than these. Also, people generally do online shopping to get items at lower prices. Items that you would never have considered getting online in the past, such as shoes, are now purchased in that manner. People are using the Internet to stretch their incomes further, since the ravages of the Obama Administration have impoverished us all.

Worry on April 20, 2017 at 8:49 pm

Skunky with the commenters’ Nobody Does It Better Award yet again. Sorry for the (ugh!!!) Carly Simon reference, but the title does fit Skunky’s ongoing contributions.

Alfredo from Puerto Rico on April 20, 2017 at 11:17 pm

Going off the tracks here, but . . . since ‘Skunky’ mentioned ‘crooked Hillary’ and how thisclose the lumpen-this-and-that-iat came to electing her, I wish to bring up the whole to-do in lower Manhattan over the ‘Fearless Girl’ statue that was put up right next to that of the ‘Charging Bull’. The latter’s creator, Arturo di Modica (who is rightly outraged over such placement), envisioned his statue as a symbol of resilience, prosperity, freedom, and the individual spirit – yet didn’t seek to inject politics into it. ‘Fearless Girl’, by contrast, was meant from the outset as a political statement, commissioned by State Street Global (you can see where we’re going from this – “global” = One World government); that statue represents coercive collectivism, Big Government statism, socialism and Communism, and has ‘social justice warrior’ written all over it in the same way the late Al Hirschfeld used to weave his daughter Nina’s name into the hair strands and clothing wrinkles of those he’d caricatured in the last six decades of his life and career (up to his death in 2003). When the Marxist Mayor, Warren “Bill de Blasio” Wilhelm, denounced di Modica’s ‘Charging Bull’ statue as symbolizing “unfettered capitalism,” that gave away, right away, what ‘Fearless Girl’ was really about – and not what its defenders and apologists claim it to be.

Concerned Patriot on April 21, 2017 at 5:37 am

Ahhhhhhh, Concerned Patriot, you have quite a mind, and frequently expound on topics that are of great interest to me, giving what I consider to be expert analysis. After reading the initial story about this statue and the burgeoning hubbub, I have kept in touch with it through the headlines. I have not gotten too much closer than a headline lately, although I have continued to note how this non-story has become a “story” in the minds of many.

Excellent statements on a subject I could not follow too closely because of the tendency I might have to vomit. And if I vomit too much, I’ll lose too much of what I eat and drink. And if I lose that, I’ll lose my fitness. And if I lose my health and fitness, well . . .

but thank you for your comments on this, yet another episode of the ridiculousness surrounding the downfall of “this once great republic.”

I have now been Stuck In NYC for the past 1 year, 8 months, 2 days and counting. It was 38 years ago today that I took my first acid trip. Ahhhhhh, how time flies, and how I’d like to fly, back to the farm, back to the fire ants, illegal monkeys, illegal iguanas, rats, cows, horses, coconuts, acerola, pasteles, etc.

All because, . . .

I’M GOING CRAZY LIVING HERE IN THE MADNESS KNOWN AS NEW YORK MOTHERF_CKING CITYYYYYYYYYYY!!!

AUUUUUUUUUGGGGGGHHHHHHHH . . .

THUMP!!!

Alfredo? Alfredo? Hey, . . .

you alright? This guy just . . .

he just . . .

Alfredo?

Alfredo from Puerto Rico on April 21, 2017 at 7:50 am

Your article Debbie is yet another concrete example of how Obama deliberately set out to “fundamentally transform the United State of America.” And he did.

Panhandle on April 21, 2017 at 1:38 pm

When I joined the old INS in the late-1980’s I signed up for pretty good health insurance and kept the very same plan into retirement. Without so much as a warning, my insurance dumped me, and I was placed into a Welfare-quality plan. To keep my old insurance would have been like making a second monthly mortgage. So now I am the only white guy in an office full of Spanish speaking,pregnant teenagers. THIS was ObamaCare for me.

#1Vato on April 21, 2017 at 6:53 pm

Spahneesh speeekeeeng, pregnahn’ teenhajerss?!??!???!!!

Ai nebehr herr nuhseeng abou’ dah een mai lie befawahr!!!

Except all around me, a few relatives, a few close friends, the daughters of a few close friends, the girls in the building, or down the block, or . . .

ROTFLMAO!!!

Alfredo from Puerto Rico on April 22, 2017 at 2:05 pm

OH!!!

One more thing, . . .

said the attorney to the temp at 5:27 p.m., . . .

after the computer had been turned off, and I was about to put the cover on.

IF, . . .

Debbie does an article about . . .

The Downfall Of Uncle Bill, . . . it’s . . .

going to be . . .

SO MUCH FUN!!!

You can tell I’m stoned, right?

Alfredo from Puerto Rico on April 22, 2017 at 2:17 pm

ACHAAAAAAAAAAAA!!!

Zee Beeg Noose, Brezhinski. And boy, do I mean NOOSE. Just reviewing the internet after a rough days work, and some errands afterward. All I can say is . . .

ROTFLMAO!!!

Alfredo from Puerto Rico on April 23, 2017 at 11:16 pm

Obamacare accounted for less than 10% of the population at its highest enrollment. Until 2017, Obamacare had premiums at lower rates than they would have been under pre-Obamacare. Yet, Obamacare (which didn’t actually start until 2013) shares the blame in the downfall of retailers, malls, et al?

It’s fairly obvious you don’t know much about (1) why malls have been and will continue to die out (hint: America has more physical retail space per capita than anywhere in the world) and (2) Obamacare.

But hey, why let facts get in the way of pandering to an audience.

Isaac on April 23, 2017 at 11:39 pm

I’m off to work, but wait until the rest of the world wakes up to Zee Beeg Noose.

Debbie, I hate the expression, but . . .

you go girl.

Alfredo from Puerto Rico on April 24, 2017 at 6:29 am

I don’t have much of a database for gaging the cost of healthcare, I had company paid insurance until a couple of years ago when I got laid off and took early retirement. I do know that my insurance went up 29% from 2016 to 2017 for EXACTLY the same coverage.

I have hated mall shopping for decades. The places give me a headache, they are a hangout for thugs looking to rob people and teenage girls. I will miss Sears, if it does tank. I grew up on Sears, the Ted Williams line of sporting equipment, the candy counter in the middle of the store with the fresh popcorn that one could smell throughout the store. And Craftsman tools, no better warranty anywhere. At least on their mechanics hand tools, their power tools were crap a lot of the time.

I won’t miss Kmart. I’ve never set foot in a Walmart, though I have bought from Wally world online a couple of times. Just something offputting about those stores. Maybe it’s the trailer park chic they exude. Similarly I stopped in at a 99 cent store a few month ago and got to observe some interesting folks.

Don’t discount internet sales as a factor. True the internet has been around for a long while, but the internet retailers have been upping their game constantly. Amazon Prime is still relatively new and it’s a great enhancement to the Amazon shopping experience. I’m an Amazon addict. Between free shipping, two day delivery, and a 5% rebate on my Amazon card it’s hard to beat.

Richard on April 24, 2017 at 4:44 pm

You can dislike the ACA as much as you want, but to claim that it is responsible, even partially responsible, for the closure of so many retail stores and shopping malls is HILARIOUS. Considering that so few of the people working in these stores can even afford healthcare, and many of them are still on their parents’ plans, Obamacare is about factor number 58 or so.

You glossed over some of the REAL reasons that brick-and-mortar retail and older malls are dying: online sales, complete lack of customer service, and the “leadership” of incompetent boobs like Eddie Lampert. Funny how some of the formerly online-only retail outfits are opening stores and making a profit doing it.

PaulS on April 24, 2017 at 5:19 pm

Obamacare was a transfer of wealth aimed at the continued destruction of the middle class by The American Left. The resulting increase in premiums across tens of millions of peoples’ lives can certainly affect shopping habits.

Alfredo from Puerto Rico on April 24, 2017 at 8:19 pm

The big lie about retailers going out of business, is consistently blamed on the “internet.” However, only 8% of all retail sales are from online purchases, according the Macy’s COO. And the myth that everything is puchasable online is also ridiculous. As well as the global market is supposedly doing, health costs have directly reduced the size of the middle class pocketbook and as the middle class shrinks, so have their savings and ability to ride out short and/or long-term emergencies, thus less trips to the mall.

Diane M. Grassi on April 25, 2017 at 6:41 pm

I can’t believe the courts didn’t stop Obamacare when it became LAW that everyone HAD to buy into it.

How is this anything but a dictatorship in action? Where were all the revolutionaries then and when the bathroom act was forced on Americans…Don’t they know a leftist dictator when they see him?

Lambiepie on May 6, 2017 at 7:10 am

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