Wal-Mart Good for America

wsj.com ^ | April 5, 2005 5:22 p.m. | Associated Press

[The Great Yazoo]

ROGERS, Ark. -- Wal-Mart is "good for America" and the barrage of criticism against the company is an effort to protect the status quo in retailing, President and CEO Lee Scott said Tuesday in a sharp attack on organized labor and retail rivals.

Addressing about 50 journalists gathered at the company's media conference -- it first ever media event – Mr. Scott defended its wages and health care plans, criticized by labor groups as inadequate, and said that the company is able to save customers big money as it drives costs out of its system.

"Innovation and competition tends to change the status quo," said Mr. Scott, speaking at a hotel in Rogers, a few miles from Wal-Mart Stores Inc.'s Bentonville headquarters.

[Alberta's Child]

I think you raise some very good points, but how can you possibly say that the manufacturing sector is "crumbling?" The U.S. manufacturing sector almost always produces more output every year than the previous year, which is hardly an indicator of a "crumbling" sector.

A lot of folks mistakenly assume that a decline in manufacturing employment means a corresponding decline in manufacturing output. In fact, the opposite is the case in the U.S. right now.

[iconoclast]

Besides, don't ya know it's easy to lift yourself up after you've lost your job at age 49 and 3 kids in college.

I'm not complaining, I'm happy with my station. But my plan was to spend my autumn/early winters in academe, and that's why I pursued a graduate degree in my forties.

I felt my plans were realistic ..... I knew my chances for a full time teaching position at the University level were slim (I really had no appetite for pursuing a PHD.). But I thought a junior/technical college slot was certainly not a stretch especially since, besides a creditable academic background, I had owned/run a computer science (my academic major) related firm for 20+ years.

Boy was I wrong! NO INTERVIEWS ..... wrong age, wrong sex, wrong race!

[KC_Conspirator]

I still refer to it as Chairman Mao's General Store.

[iconoclast]

Hey, I thought you were going to do your lawn!

Ah .. moderation in all things (except this damned Internet), ;o)

[iconoclast]

If I remember correctly, they grew tobacco on the plantation where he lived.

Ah, as they did on my Grandma's sharecropped fields.

I wish my dad were alive so I could tell him he ran away from a plantation.

[Alberta's Child]

"Plantation" is a term that Douglass himself used, perhaps because he grew up on a "farm" that was among 20 or 30 different farms owned by the same man in Maryland at the time.

[WRhine]

It was in past recessions that manufacturing is what got us out of the whole and jump started the economy.

That it did and this powerful engine of true wealth no longer packs much punch in firing up the economy today.

It's all service now in America and the field of competition in these low margin businesses just keeps on increasing. Case in point, at a local food mart/strip mall in my area there are 3 Hair Cut joints and 2 Tanning Salons. Just a couple of years ago, there was only one barber shop and no tanning salons.

I went to one of these barber shops the other day and was the only one there. When I asked how business was the hair stylist replied that it was real slow. Yeah, no wonder. Everyone is trying to crowd into the same service businesses. Next year one of these shops will probably close and be replaced with yet another junk food joint.

America's “New” Economy.....

[WRhine]

how can you possibly say that the manufacturing sector is "crumbling?" The U.S. manufacturing sector almost always produces more output every year than the previous year, which is hardly an indicator of a "crumbling" sector.

There are two things at work here. One is that increased automation is increasing output with fewer workers which covers up much of the actual shrinkage in the sector. That's the march of progress. The other is that much of what passes for manufacturing today is really assembly work where the complex value added components of a product that require extensive R&D and engineering are manufactured overseas only to be slapped together here.

So with the much looser standards of what constitutes manufacturing (witness Bush's former economic advisor’s attempts to classify making hamburgers as "manufacturing") the aggregate economic numbers don't look that bad when what is actually happening in America's manufacturing sector is nothing short of a disaster.

[superiorslots]

I live in an a somewhat rural/suburban area. 10 years ago there was probably 4-5 lawn cutting services. I just looked in the phone book and there are now 19. I know 1 of them because they do the lawn maintence on apartments my Dad and I own. According to the owner they have been slow over the last 3-4 years because of the influx of these businesses. Many are made up of layed off factory workers who decided to "pull up their bootstraps" as Rush calls it.

[Alberta's Child]

You may have a point there, but I would also contend that some industries in the service sector actually involve more "manufacturing" than "services."

Software development, for example, is often overlooked as a manufacturing industry because of an inherent assumption that something can't be "manufactured" if it is the product of human minds instead of machinery.

[iconoclast]

You've got a very good point there. In his autobiography, Frederick Douglass describes how amazed he was at living standards in the North after he escaped from the plantation in the South where he was born and raised. Black laborers in New Bedford, Massachusetts -- who were not fully "free" in any sense of the word -- had a higher standard of living than most plantation owners in Maryland where he lived.

That's where all this started.

Now we're at a point where a man who owned 20 or 30 farms had a standard of living that was below that of a freed Negro in the north.

I have a suggestion for you .... in future, consider the source.

[Alberta's Child]

The source is me -- an idiot.

The "plantation" where he was born and raised was not the same one that he escaped from, so there's probably no inconsistency in what he said.

I would add, though, that the term "land rich, cash poor" still means something even today. I can show you a place not far from Calgary where an old couple still lives in an old home with no running water -- on a ranch that could probably fetch $10-$15 million dollars if it were sold tomorrow.

[ServesURight]

Walmart isn't to blame, the government and all their regulations and high taxes are to blame for Walmart investing in China.

[andy58-in-nh]

Cheap labor isn't coerced
Actually it can be and very often is, under the guise of "voluntary" contract. It can be done in number of ways.

Name one.

Read some basic Economics - Hayek, Friedman, von Mises, even Samuelson, for Pete's sake.
Hayek, Friedman, von Mises represent a certain ideology. BTW, why this qualification "even" about Samuelson? Are his credentials in "basic Economics" suspect? Why?

The economists I named represent Capitalism, not an ideology. Capitalism is an economic - as opposed to a belief - system. Samuelson hedges his general support for markets with a policy preference for certain Government limitations and regulations on voluntary action. My judgment is that many of these limitations (wage and price controls, for example) have proven counterproductive. My preference is for freedom of contract, enforced by rational laws derived from the consent of the governed. Government make-work hacks and union thugs could not long survive in such an environment. Which explains a lot about Massachusetts....

[A. Pole]

Cheap labor isn't coerced Actually it can be and very often is, under the guise of "voluntary" contract. It can be done in number of ways.

Name one.

Aaargh. It is tiresome to explain the obvious.

Capitalism is an economic - as opposed to a belief - system. [...] My preference is for freedom of contract, enforced by rational laws derived from the consent of the governed.

You are confusing the idea/theory/abstract model with the reality. Your mind is trapped.

Government make-work hacks and union thugs could not long survive in such an environment.

Pay attention to your own words. You used the word "could". You are talking about something what you IMAGINE that it can exist. It cannot.

[WRhine]

Software development, for example, is often overlooked as a manufacturing industry because of an inherent assumption that something can't be "manufactured" if it is the product of human minds instead of machinery.

Manufacturing isn't manufacturing just because a product is made by machines. It's the dynamic sum of all the intellectual capital, design, R&D, plant & equipment investment, workforce-training etc. that goes into the finished tangible product.

I agree Software being a relatively new industry is hard to classify and does share certain characteristics with manufacturing. But is it really manufacturing? That is something the academic community and economists will be debating for a long time.

Yet even here, more and more of our software is being outsourced to countries like India. What do you think is going to happen in the high technology field when other nations have end to end control of both the hardware and software industries?

America will have precious few capabilities in technological development and all the future innovation that technology creates…that’s what.

Maybe China and India will feel sorry for us, remembering it was, after all, America that willingly handed over its technology to them and perhaps cut us some favorable deals on their technology equipment. Then again, maybe not.

[Diana in Wisconsin]

*YAWN*

[durasell]

yeah and all those greedy Americans who refuse to work for 30-cents to 75-cents an hour are to blame. C'mon people, let's get competitive with China! Drop your outrageous salary demands.

[WRhine]

I live in an a somewhat rural/suburban area. 10 years ago there was probably 4-5 lawn cutting services. I just looked in the phone book and there are now 19. I know 1 of them because they do the lawn maintence on apartments my Dad and I own. According to the owner they have been slow over the last 3-4 years because of the influx of these businesses. Many are made up of layed off factory workers who decided to "pull up their bootstraps" as Rush calls it.

It's the same here in the outlying suburbs of Chicago. There are at least 30 landscapers in our area, many of which, like the construction crews, are staffed with illegal aliens. It's become really tough to survive in this business given the competition and "ahem" labor cost advantages of certain companies. A couple of years ago a good friend of mine who was laid off at the time tried to make a go of starting up a landscaping business but backed out when he saw how many companies were fighting for the same business.

Yeah, I've heard Rush utter that line a number of times. He is either so insulated that he doesn’t know what is happening to everyday Americans or, more likely, finds that it’s in his own economic interests to hew to the republican party free trade line.

[andy58-in-nh]

Aaargh. It is tiresome to explain the obvious.

If it's so bloody obvious, how come you can't cite a single example of "voluntary coercion"?

You are confusing the idea/theory/abstract model with the reality. Your mind is trapped.

I would say that it is your perceptions that are "trapped". The only barriers to economic freedom are imposed by a government unencumbered by rational law and empowered by those who wish to take by force what they have not created or earned. Capitalism isn't perfect because people aren't - nor are they perfectable. That is the uniform conceit of all utopian ideologies.

You are talking about something what you IMAGINE that it can exist. It cannot.

Obviously you've never lived in a socialist Hellhole like the People's Republic of Taxachusetts. Either that, or you work for the Registry of Motor Vehicles. That said, please substitute "would" for "could". Make-work hacks and do-nothing union jobs only thrive where economic value is subordinated to political clout.