Thursday, August 31, 2006

What are your economic values?

Everyone deserves a basic standard of living. I would question the morality of anyone who didn't agree with that statement, but believe it or not, there are those who do not believe it.

The degree of inequality should be constrained. This is a bit harder to defend, but if you don't want riots in your country one could argue that you should take care of the least of your citizens.

Most improvements in technological and material prosperity are a good thing. Who would really want to go back to living in the 1930's?

We should value the preservation of non-market institutions. This is a bit harder to defend based on your definition of non-market institutions. Also, libertarians will take issue with interfering with the so called "free market". But, one example; many SL residents believe that removing homes, businesses and the beach from River St. was a huge mistake.

Now look at Wal-Mart.

Basic standard of living. Wal-Mart, the wealthiest company in the world, has low wages and benefits. Not only that, it pulls down wages and benefits of other companies. Wal-Mart's low prices are dependent on low prices and low benefits.

Inequality. Wal-Mart has placed 1.3 million persons in the USA into low paying, low benefit jobs. Recent census reports show more people in poverty and decreases in real income.

Improvements in technological and material prosperity. Wal-Mart takes business from existing firms by offering the same merchandise cheaper. Good competitive capitalism. Wal-Mart arguably lets you buy more with your money, but wouldn't a 1.50/hr wage increase provide the same savings and allow one to shop places other than Wal-Mart if they so wished? I guess the question here might be, should Wal-Mart spend $3 billion of it's $11 billion in profits to increase employee wages. Or maybe raise your prices by 1-2% and do the same thing. Or a combination of the two.

Non-Market institutions. Maybe you can argue that a Wal-Mart located in SL will not effect us socially somehow. How likely is it that a woman will be trampled by a crowd trying to grab $29 DVD players or that there will be an increase in crime. If there was a Wal-Mart will people be calling TOTT 30 years from now asking "What were those people thinking"?

Shopping at Wal-Mart is a no brainer for the 'consumer' in most of us. But what about the 'worker' or 'citizen' part of us?

NOTE: I stole most of this material from Bob Brownstein HERE.

Wednesday, August 30, 2006

Is There Enough Blame Left Over to Share With Wal-Mart?

Wal-Mart has supposedly "given up" on Saranac Lake and as a result the blame game has been going on for weeks on TOTT and in letters and guest columns in the ADE. So who actually is to blame for Wal-Mart "giving up" on us?

The largest share of the blame has been cast upon the three Democrat village board members. The three new board members soundly defeated the Republican competition who campaigned on getting Wal-Mart to build as soon as possible. They are directly responsible for not allowing the rezoning of the village sandpit area. But to adequately prepare a SEQR they need answers to real questions about the effects of the rezoning.

There is no blame being cast on the SL residents who overwhelmingly voted for the three Democrats. Afterall, the Democrats lied to them about supporting Wal-Mart.

Next to be blamed is SAGA and it's rich, non-native members. But SAGA said it would not oppose Wal-Mart if the company built a reasonably sized store in the downtown area.

The Save Saranac Lake Coalition gets blamed as they are very upfront about being opposed to Wal-Mart. This is another small group that consists of rich, non-native residents of the area. It must be a very powerful group of people to back down the largest company in the universe.

Then there is CARD, a mysterious local group made up of the vast majority of area residents. These are salt of the earth, born and brought up in SL, 5th and 6th generation natives that have been caretakers of the Adirondacks for generations. They certainly don't share in any blame. Afterall, they supported anthing Wal-Mart told them to support. I wonder if any CARD member wanted Wal-Mart so badly that they suggested to Wal-Mart that they might want to consider compromise?

But what about Wal-Mart? The largest, wealthiest company in the entire universe (as far as we know). Wal-Mart doesn't compromise, they don't want community input (unless it favors them), they always win and no one on earth can tell them what to do. They are the experts afterall. They have obviously decided that they are incapable of profitably operating a 68,000 sq ft store which likely would have been supported by a majority of local residents.

Is there any blame left over for Wal-Mart?

Greensboro, NC Wal-Mart - One Stop Shopping

A nice new store (sent by the power of prayer), what does it have besides groceries and 36 departments of general merchandise?

tire and lube
portrait studio
one hour photo
beer and wine sales
vision center
SmartStyle hair salon
nail salon
gas station
wireless phone sales

On top of all that, it's open 24 hrs, 7 days a week. Not much reason or need to shop anywhere else, unless you want to visit the other two Wal-Marts in Greensboro.

Tuesday, August 29, 2006

SAGA , Wikipedia and Lying Libelous Liars

Wal-Mart supporters are so in love with Wal-Mart that they resort to publishing libelous statements about SAGA on Wikipedia.
SAGA was firmly anti-Wal-Mart, opposing the mega-retailer because of the havoc the organization thought it would wreak on local business. The local businesses were weak, ineffective, and generally ignored the needs of the local resident, preferring instead to cater to wishes of a small group of affluent summer visitors.
And this:
The community, due to the criminal meddling of SAGA, now lacks any kind of retail resources, no clean grocery store:
How can you be anything other than speechless about this?

This is actually a standard Wal-Mart supporter ploy. Wal-Mart supporters have been been waging a war on a fair point of view on the Wikipedia Wal-Mart entry. One place you can read more about it is here or google Wal-Mart + Wikipedia + war.

UPDATE: The Wikipedia entry for Sound Adirondack Growth has been edited to reflect the true purpose of the organization and its stance on Wal-Mart. We'll see how long it lasts.

Proclamation - Community Store Will Fail

Well you community store supporters should just pack up your bags and go...ummm home. The community store will fail - so says letter to the editor writer Ed Trathen.

One reason it will fail is because shares in the corporation will be available to all residents of New York State and not just SL area residents. It's too bad the Community Store organizers have to follow the law (unlike some major corporations).

Another reason the Community Store will fail is because they link to news stories about Wal-Mart on their website. There should be more news about the community store. Well, there are 3 links to news stories about the community store and I'm guessing there will be more stories when there is something new to be reported.

The Community Store may succeed or may fail, but I doubt it will be because of what is or isn't posted on their website.

PS: Note to Mr. Andersen. Yeah, Yeah, the town is slowly dying. People have been saying that ever since the discovery of streptomycin put the sanitarium out of business. Personally, I thought the town started dying when the Altamont Dairy Bar ceased to exist.

"Waging a Living" on PBS Tonight

Tonight at 10 PM on channel 18 (PBS). P.O.V. is presenting a documentary that follows the lives of 4 people who are trying to support families on wages of $8-11 an hour. More about the program here.
Roger Weisberg's alarming and heart-wrenching new documentary, "Waging a Living," puts a human face on the growing economic squeeze that is forcing millions of workers into the ranks of the poor. Shot in the Northeast and California, the film profiles four very different Americans who work full-time but still can't make ends meet. Despite their hard work and determination, these four find themselves, as one of them observes, "hustling backwards."

Monday, August 28, 2006

Is It Just About Wal-Mart? Yes and No.

More comments about Wal-Mart and a possible employment future from Ezra Klein (thanks again Jonathan).
Again, this isn't about Wal-Mart. Rather, it's about every company that competes with them, and every producer who sells through them. In the first case, Wal-Mart is driving down worker salaries and benefits by so resolutely grinding their own associates into the dirt. So rather than watching the service economy mature into a middle class conveyor as the manufacturing industry did, it's moving in the opposite direction -- and given the decline of manufacturing and the softness of worker salaries, what choice have workers than to accept their lot? Something is better than nothing, but something remains inadequate.
So as Wal-Mart chases manufacturing jobs out of the country we have service jobs as replacement jobs. Service jobs that are being defined by Wal-Mart wages and benefits. On the other hand, maybe some people think a package of underwear for $2.93 is worth it. Read the entire article.

Wal-Mart Leads the Race to the Bottem

I don't think the word monopsony is tossed around enough for people to really understand the implications. A monopsony as defined by the Economist is below:

A market dominated by a single buyer. A monopsonist has the MARKET POWER to set the PRICE of whatever it is buying (from raw materials to LABOUR). Under PERFECT COMPETITION, by contrast, no individual buyer is big enough to affect the market price of anything.
Many Wal-Mart supporters claim that the supremacy of Wal-Mart is what the so-called 'free market' is all about. It's all about competition. But how can the small business person compete when they have no power to dictate price to suppliers? Explain how this is fair competition? Monopsonies eventually lead to lower wages and benefits, outsourcing of jobs and outright failure of suppliers.

Barry C. Lynn, author of "The Case for Breaking Up Wal-Mart", gives two examples to explain the effects of a monopsony:

The effects of monopsony also can be difficult to pin down. But again we have easy illustrations ready to hand, in the surprising recent tribulations of two iconic American firms -- Coca-Cola and Kraft. Coca-Cola is the quintessential seller of a product based on a "secret formula." Recently, though, Wal-Mart decided that it did not approve of the artificial sweetener Coca-Cola planned to use in a new line of diet colas. In a response that would have been unthinkable just a few years ago, Coca-Cola yielded to the will of an outside firm and designed a second product to meet Wal-Mart's decree. Kraft, meanwhile, is a producer that only four years ago was celebrated by Forbes for "leading the charge" in a "brutal industry." Yet since 2004, Kraft has announced plans to shut thirty-nine plants, to let go 13,500 workers, and to eliminate a quarter of its products. Most reports blame soaring prices of energy and raw materials, but in a truly free market Kraft could have pushed at least some of these higher costs on to the consumer. This, however, is no longer possible. Even as costs rise, Wal-Mart and other discounters continue to demand that Kraft lower its prices further. Kraft has found itself with no other choice than to swallow the costs, and hence to tear itself to pieces. (My emphasis)

Monopsonies used to be illegal. The Great Atlantic and Pacific Tea Company (A&P) was a monopsony. It used it's in-house brands to force suppliers to do the companies bidding. Back then (1930's) the Federal government took a dim view of this practice. In fact, they created the Robinson-Patman law (known as the Anti-A&P Act) which ...forbade any person or firm engaged in interstate commerce to discriminate in price to different purchasers of the same commodity when the effect would be to lessen competition... President Reagan changed all that by gutting the enforcement of anti-trust laws.

Sunday, August 27, 2006

Wal-Mart Prices - Are they the lowest?

From PBS interview with John Lehman [Jon Lehman worked for Wal-Mart for 17 years, managing six stores in four different states before he left the company in 2001 to work for a union trying to organize Wal-Mart employees]

What is the opening price point? Why is it so key to Wal-Mart's strategy?

OK, it's lawn-and-garden time. Your grass is getting high. Your lawn mower is broken from last year, or you need a new lawn mower. You're going to go to Wal-Mart. So you go to Wal-Mart, and you're looking for a lawn mower, and to your delight, you walk in, and you see this $99 lawn mower. You may not want a cheap, basic lawn mower, but you see that price point on an end cap or a big display stack base, and you say, "Wow, what a great price." And it draws you in. It lures you into the department, and you form the perception immediately that "Hey, Wal-Mart's got the lowest prices in town. Look at this item right here. How could they sell it for $99?" ...

But as you walk into the department and look for that $269 power-drive lawn mower that you really are after, they're not losing money on that item. And it may not be the lowest price in town. Wal-Mart used to advertise "Always the low price." They don't do that anymore.

So are you saying that the opening price is the lowest price and actually will beat the competition, but maybe other items in the same category aren't necessarily the lowest price?

Oh, absolutely not. It's just like fishing: You want to entice that fish to that lure. ... Once you walk past that opening price point, they've got you, because you've already formed the perception that everything in that department is the lowest price in town.

And maybe it's not.

No, it's not. No, I can tell you it's not. I can tell you from experience it's not. ...