Story about Cheney comment on eBay. Compare it with this story in the NYT.
Kerry's running mate John Edwards in the first story makes this comment, "If we only included bake sales and how much money kids make at lemonade stands, this economy would really be cooking". I think the NYT story shows the weakness in Edwards rebuttal.


The truth, of course, is that they're BOTH somewhat right. There's a lot of aggregate economic growth in eBay. But most of it is in comparative small change.

eBay, in some ways, resembles Amway in that there's lots of little fish, but only a relative few of the big ones. (eBay's big fish don't necessarily survive on the little fish, so perhaps that analogy only goes so far.) Plenty of people on eBay (and Amazon) have a garage with a few boxes of things they sell, or buy in bulk and sell off the remainder. But most of them are making only a few hundred bucks a month. Great for paying for a night out or perhaps whittling away at the credit card debt.

The big successful ones are, of course, inspiring the little guys to give it a try . But it doesn't take too long to see that you really won't get much more than enough to cover the babysitter by doing it only "on the weekend and in your spare time". (This was where I was really going with my Amway comparison.)

I know several folks who quit their day jobs to sell antiques on eBay. They HAD to quit in order to make a real go of it. They had a great run for almost 2 years before too many other people jumped in. The market glutted and sale prices fell. All but one have had to try to go back to jobs in their old careers. In a down economy. The remaining one is still trying, but now as an "Auction Assistant". That is, he's eBaying other people's stuff for a commission. It's tough going. Interestingly enough, he's the one who is an authentic, countable, small business. He started an LLC for his auction business. (Good thing too, because he's currently filing for personal bankruptcy after getting the short end of the stick from a previous employer.)

Yes, eBay sellers contribute to the nation's economy. But the majority of them are closer to the garage-sale level than they are to the small business level. Sure there's a not-insignificant amount of economic growth there when you aggregate it, but it doesn't even come close to making up for the additional 4% of people who aren't counted as unemployed in the federal economic data because they've given up looking for work. If we want to talk about hidden economic data, that's where we should shine the light. We have a better understanding of those numbers than any eBay speculation, and yet they are still left out.

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