Posted on 11/19/2004 3:44:14 AM PST by The Great Yazoo
On Tuesday, the Public Broadcasting Service ran a scathing attack on Wal-Mart, the world's largest retailer, on its "Frontline" series. The title of the program was, "Is Wal-Mart Good for America?" Although never stated explicitly, it is clear from the overwhelmingly negative portrayal of the company that the answer clearly is "no."
I watched this program with special interest. In fact, it was the first PBS program I'd seen in some time. I'd stopped watching shows like "Frontline" long ago because of their heavy liberal bias. But I thought perhaps this one would be different because I had been extensively interviewed for it.
Over several hours at my house, I patiently explained to Hedrick Smith, the chief correspondent and producer of the program, that the main beneficiaries of Wal-Mart's low-price policy are the poor, who could now afford products that would be out of their reach but not for Wal-Mart, improving their lives and raising their standard of living.
I was trying to make the same point that the great economist Joseph Schumpeter made about the Industrial Revolution. In his book, "Capitalism, Socialism and Democracy," he said, "The capitalist achievement does not typically consist in providing more silk stockings for queens, but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort."
I also pointed out to Smith that Wal-Mart, all by itself, was responsible for a significant amount of the productivity miracle we have seen in this country over the last decade. In a 2001 report, the McKinsey Global Institute, a respected think tank, concluded that Wal-Mart's managerial innovations had increased overall productivity by more than all the investments in computers and information technology of recent years.
Wal-Mart's innovations include large-scale (big box) stores, economies of scale in warehouse logistics and purchasing, electronic data interchange and wireless barcode scanning. These gave Wal-Mart a 48 percent productivity advantage over its competitors, forcing them to innovate as well, thus pushing up their productivity. The McKinsey study found that productivity improvements in wholesale and retail trade alone accounted over half of the increase in national productivity between 1995 and 1999.
A new study from the prestigious National Bureau of Economic Research found that Wal-Mart has a substantial effect on reducing the rate of inflation. For example, it typically sells food for 15 percent to 25 percent less than competing supermarkets. Interestingly, this effect is not captured in official government data. Fully accounting for it would reduce the published inflation rate by as much as 0.42 percentage points, or 15 percent per year.
Ignoring these beneficial macroeconomic effects, "Frontline" focused almost exclusively on the loss of jobs allegedly caused by Wal-Mart. Acting as what economists call a monopsony, it supposedly forced countless American manufacturers to close their domestic operations and move to Asia in order to get their costs low enough for Wal-Mart to sell their products. It is also said to have caused innumerable local retailers to go out of business, further adding to the job loss. In fact, academic research by economist Emek Basker of the University of Missouri contradicts this last point, finding that Wal-Mart permanently raises local employment.
Even restricting oneself to the material presented in the "Frontline" episode, it is hard to justify its sweeping indictment of Wal-Mart. For example, it accuses Wal-Mart of buying $15 billion to $20 billion worth of goods from China each year, implying that this is largely responsible for our trade deficit. But since our trade deficit with China is about $150 billion, Wal-Mart can be responsible for at most 13 percent of that.
But even looking at the issue that way is stupid. If Wal-Mart didn't buy from China, its competitors would. And if Wal-Mart had to depend only on high-cost American suppliers, it never would have grown the way it has and its sales would be far less than they are. Yet "Frontline" always implies that somehow Wal-Mart could have done things differently, kept more production and jobs in America, without paying a cost. No alternative scenario was presented.
Finally, "Frontline" relied heavily on biased sources, such as testimony from openly protectionist organizations like the U.S. Business and Industry Council and a union representative who admits to being a disgruntled former employee of Wal-Mart. In other cases, the report relies on hearsay evidence that no responsible newspaper would publish in order to make its case. Supporters of Wal-Mart and free trade were limited to a few short minutes of camera time (I got about 3 seconds), mostly by a totally ineffectual company spokesman.
In short, "Frontline" presented a one-sided hit piece disguised as objective news reporting. Everyone responsible for it should be embarrassed for this grotesquely unfair case of taxpayer-financed liberal propaganda. I will know better the next time they call me for an interview.
Bruce Bartlett is a senior fellow at the National Center for Policy Analysis, a Townhall.com member group.
You are making me laugh, You are communist you believe that that products have value determined by other things other than the free market. Come on, are you a conservative?
Seems that story has more to do with Colonial Properties than Wal-Mart.
Maybe, but the exercise of "eminent domain" for private business purposes is a major abuse and gross extension of that government power. In fact, I believe that "eminent domain" should be eliminated.
More to the point---why bash Wal-mart with this, when a significant number of other major corporations are using the same tactic.
Lots of Mom and Pop businesses did close b/c of Walmart. But many of them where I live closed at 5 p.m. on weekdays, were not even open on Sunday and Monday and they closed at noon on Saturdays. They often did not have what I was looking for, and if they did, it cost more.
Wal-Mart sells good products. I didn't say "great" products. I wouldn't buy a suit from Wal-Mart (or Sears for that matter). But I would buy socks, tee-shirts, shorts, etc.
Anyone interested in this might want to read the discussion earlier tonight about this topic...
http://www.freerepublic.com/focus/f-news/1283416/posts
Did you all know that Mrs. Kerry owns $1 million of Wal-mart stock? That's enough reason for me not to shop there... besides the labor disputes, etc...
Maybe I should re-phrase that - earlier LAST night... LOL
Wal-Mart will utterly fail to monopolize the retail market, if that's its goal.
bump for later
Wal Mart sucks. But PBS sucks a whole lot more.
Well, I go where ever I find the cheapest prices. Their fresh meat isn't so great. But they have a decent seafood department. And canned goods, staples, paper products, batteries... why pay more? If the other stores want my business all they have to do is lower their prices or do comp. ads. Some stores will let you bring in your WalMart ad and they will give you the WalMart lower price. But it is a pain, you have to show the cashier each item/price and she has to key it in. I have a mortgage, five cars, and three kids in college. I go for bargains. My favorite brands are Bargain and Clearance....
I get all my jeans at WalMart. $10-$15 a pair. They have size 10 Tall, and they fit. They last longer than Levis.
I rarely go to Walmart anymore. Unless the item is dirt cheap, I pay the same price elsewhere in a small business.
Shopping for food at Walmart, must be like going to a wholesale club. Don't they have one anyway? Walmart is good in a way that you can get a quick temp job.
Are you saying that America grew into the world's superpower based upon serfdom?
(In my best Martin Luther King voice) Isn't it time that we asked ourselves, is AMERICA good for WAL-MART?
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