The High Cost of Low Prices

The American Conservative ^ | May 22, 2006 Issue | Marian Kester Coombs

[Fledermaus]

How about getting rid of the welfare state? If people can't educate themselves enough to get a good paying job or are too stupid to start a family before they do why should I pay for them with taxes?

What's it like being a socialist?

[bfree]

Did you ever take a basic economics class, or did your parents drop you on your head repeatedly?

[ex-snook]

"Did you ever take a basic economics class, or did your parents drop you on your head repeatedly?"

How did you do in math? [5-1]Q

[bfree]

Obviously a lot better than you did. Your total lack of economic understanding is hilarious.

[Labyrinthos]

Wal-Mart employees are free to shop anywhere they like...

True, but Walmart may be the only place they can afford to shop: Walmart's low prices are attibutable in large part to the relatively low wages that Walmart and its suppliers pay their employees, and because of those low wages, their employees can only afford to shop at Walmart, which effectively lowers Walmart's cost of doing business, which alows it to lower its prices even more, which causes competitors to go out of business and lay off people who now can only afford to shop at Walmart, etc.

...why would anyone -- poor, middle class or wealthy -- want to pay more?

Better service, better quality products, nicer stores, fewer fat people in undersized stretchy pants with a neighborhood's worth of kids in tow, support for what's left of the American manufacturing Industry, and support for "downtown America." I'm sure there are more.

[Labyrinthos]

I think we're on the same page.

[Lunatic Fringe]

Look at the wealty the chinese communist party has garnered from "free trade".

Well, Comrade... I believe you are ignoring the emerging middle class in China. As for countries in South America "falling to communism", I must have missed that shocking development. A few annoying dictators have risen up, but that is not the same as communism.

[dogbyte12]

Not saying we should force anybody to do anything. I am just saying that Wal-Mart does sell a lot of junk. It doesn't seem to do any harm to mention that. Not holding a gun to anybody's head. Just trying to say you (usually) get what you pay for in the market.

If you want a toaster that lasts a life time, don't get the Wal-Mart special made in an asian country you can't find on a map.

[metesky]

Who is this "he" you refer to?

[bfree]

True, but Walmart may be the only place they can afford to shop: Walmart's low prices are attibutable in large part to the relatively low wages that Walmart and its suppliers pay their employees, and because of those low wages, their employees can only afford to shop at Walmart, which effectively lowers Walmart's cost of doing business, which alows it to lower its prices even more, which causes competitors to go out of business and lay off people who now can only afford to shop at Walmart, etc. ...why would anyone -- poor, middle class or wealthy -- want to pay more? Better service, better quality products, nicer stores, fewer fat people in undersized stretchy pants with a neighborhood's worth of kids in tow, support for what's left of the American manufacturing Industry, and support for "downtown America." I'm sure there are more.

You are an elitist POS. What garbage you post. Unions killed the manufacturing capacity and I don't care if they are unemployed or underemployed, they brought it on themselves with the union demands. Too bad that unions now have little influence, they failed the membership and deserve to be ignored and destroyed. I see no reason to subsidize the whole concept of communism, unions.

[palmer]

Many oil extraction projects are able to get natural gas relatively cheaply because natural gas is often found in abundance in the same places where oil is found.

No surprises there, eh? The thing is, that gas could be put in a pipeline and shipped elsewhere for a decent markup rather than used to steam oil out of slightly oily rocks. The whole ridiculousness of it suggests there must government incentives in it, despite what it says in NAFTA.

[palmer]

(This doesn't apply to residential users, which explains why my last combined gas/electric bill in Canada a couple of years ago was only $14.)

D'oh! I should have read your post more carefully. There's your subsidy right there. It would be a little more direct if they sent you up there to manually squeeze the oil out of the rocks, but it's still a subsidy, part of the energy input to the process.

[Alberta's Child]

The thing is, that gas could be put in a pipeline and shipped elsewhere for a decent markup rather than used to steam oil out of slightly oily rocks. The whole ridiculousness of it suggests there must government incentives in it, despite what it says in NAFTA.

In addition to oil, Canada ships lots of natural gas to the U.S. via pipeline already. I may be wrong about this, but Canada is now the largest natural gas supplier for a number of utilities in the Chicago area, as well as out on the West Coast. Incidentally, when California was going through its self-inflicted energy crisis back in 2001, Canada was one of the few places willing to sell gas to California utilities (I suspect that this may have been due to Canadian suppliers operating outside of FERC oversight in the U.S., which meant they weren't forced to abide by California's idiotic price controls).

[Gabz]

I am sick of those people myself and I think you are right about the people that are so adamant against WAL~MART are affiliated with the Unions.

Ditto!

[Alberta's Child]

The subsidy was only for residential users, as per NAFTA regulations. It was not a Canadian subsidy, but one paid by the province of Alberta. The provincial government maintains mineral rights throughout the provice, so the Alberta taxpayers basically own the gas that is being pumped out of the ground.

[Gabz]

True, but Walmart may be the only place they can afford to shop: Walmart's low prices are attibutable in large part to the relatively low wages that Walmart and its suppliers pay their employees, and because of those low wages, their employees can only afford to shop at Walmart, which effectively lowers Walmart's cost of doing business, which alows it to lower its prices even more, which causes competitors to go out of business and lay off people who now can only afford to shop at Walmart, etc.

Where I live WalMart is one of the HIGHEST paying private employers around for entry level positions. About the only ones I can think of off hand that pay more are the poultry processors.

[palmer]

That's just more proof of market distortion. A little tragedy of the commons as Albertans burn their lights longer and keep their thermostats higher. No surprise that with the same collective ownership comes other undervaluations like burning valuable gas to steam oil from rocks.

[Extremely Extreme Extremist]

I am sick of those people myself and I think you are right about the people that are so adamant against WAL~MART are affiliated with the Unions.

Naked, rank jealously and anger from the unions and assorted leftists at Wal-Mart, that's all.

[Extremely Extreme Extremist]

which causes competitors to go out of business and lay off people who now can only afford to shop at Walmart, etc.

Fresh horse manure. Whenever a Wal-Mart goes up, at least a half-dozen niche and speciality shops spring up next to it. The only people who are run out of business is the hoity-toity, snooty downtown boutique stores that liberals fight tooth and nail to keep open.

[Alberta's Child]

Sure. And we Americans are fat slobs because so many of our agricultural products are heavily subsidized, too.

You can't possibly make the case that the use of natural gas in the oil extraction process in Alberta amounts to a "subsidy" unless you can prove that a BTU worth of natural gas sold to U.S. utilities would fetch a higher price than a BTU worth of natural gas sold to Suncor, Shell Canada, or any of the other oil producers in the tar sands region.