The general point is that additional cash is tied up in shoes which cannot do something else. Who bears the burden of the loss of that additional cash changes over time (Nike to Footlocker to consumers) but the burden is bourn.
(And that's before you count the impact of the inevitable reduction in unit sales. There're various kinds of overhead that don't scale linearly units sold, or that have a long lag before scaling, or have a significantly-sized step function in the scaling.)
BTW, where did the cash go? Oh yeah, into the hands of the US federal government. We have a word for that: tax.
The general point is that additional cash is tied up in shoes which cannot do something else. Who bears the burden of the loss of that additional cash changes over time (Nike to Footlocker to consumers) but the burden is bourn.
(And that's before you count the impact of the inevitable reduction in unit sales. There're various kinds of overhead that don't scale linearly units sold, or that have a long lag before scaling, or have a significantly-sized step function in the scaling.)
BTW, where did the cash go? Oh yeah, into the hands of the US federal government. We have a word for that: tax.