Wow! War on Everything Spreads to War on Shopping Malls!

Just last night I wrote 

If the Duterte government accommodates his patron and mentor, then we shall see the “war on everything” spread to the economy. There will be a spate of nationalizations, or if not, an avalanche of regulations that will be applied to control private enterprises in order to convert them into Hitler’s fascist economic model (privately owned but government directed enterprises) 

My ink has barely dried when I came across this… 

From GMA News (October 10) 

In line with the government efforts to address the traffic situation during the holiday season, the Inter-Agency Council for Traffic (IACT) on Sunday said mall operators will not be allowed to conduct sale promos in Metro Manila during weekdays starting October 21. 

"Starting October 21, all mall operators are required by the i-ACT to not conduct mall sales during weekdays," the Department of Transportation (DOTr) said in a tweet on its official Twitter account. 

Wow. The Duterte regime has opened a new war front. And this time, war has been waged against the shopping malls! 

It’s easy to think that the present regime focuses on convenience and status symbol at the expense of economics. But beyond status symbol and convenience is the far more important issue of expanding POLITICAL CONTROL over the economy, with little idea of the ramifications of such actions 

The administration does not realize how this “traffic controls through war on malls” would harm the economy 

From the supply side, such seasonal sales promo events allow retailers to offload excess and slow moving inventories. And proceeds from these would allow retailers to restock from the cash raised from these discounted sale events. And restocking may also mean the introduction of new merchandise. 

By curtailing this, retailers will now be haunted by rising inventories and restricted access to cash for restocking of goods. This should be especially critical in preparation for the holiday season: Christmas shopping. 

If retailers get hit, then malls will lose tenants. This will add to pressures on the oversupply of malls.  

Think of how this will impact financial conditions (e.g. cash flow, earnings) of retailers and mall operators. 

From the demand side, seasonal sale events allow consumers to purchase items at lower prices thereby allowing more items to be sold. 

Through restricting the seasonal sales event, consumers will be plagued by limited access to lower priced goods, as well as, reduced access to the variability of new goods from the potential retail restocking.

In short, consumers can buy less from their constrained peso. The quality of products available to consumers also suffers.

So the administration does not recognize that the retail industry will take a tremendous hit from such "feel good look good" status symbol policies and the pursuit of expanding political (dictatorship) controls over the economy.

As for traffic, the regime will succeed. When people lose work and income they will travel less. With less travel traffic eases. Magic! Nice formula! 

As I wrote last May 01 on how leftist governments will run the economy aground: [Phisix 7,150: Prospects of a Strong Man Rule Sends Peso Tumbling, Why A Shift to the Political Left Will Mean A Weaker Peso] 

the government will likely decrease participation of private sector in the economy through legislation. The government will likely resort to the substitution of private sector participation through nationalizations. Or that the government will increase regulations and mandates that will raise barriers to entry. So by picking on winners, the incoming administration may essentially endow the privilege of political protection from competition to select favored (rent seeking/crony) private entities or to state owned enterprises. 

It is happening…fast.