Wal-Mart signifies all that is wrong in America

Craven de Kere wrote:

Incidentally I really don't think American and European IT inductries are comparable.

Neither do I. But we were talking about IT employment, most of which is happening _outside_ the IT industry. The European economy is as dependent on IT as the American, has a smaller IT industry, and about the same amount of in-house programming at insurance companies, chemical factories, etc.

Gotta go. Smile

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Thomas wrote:

The government's budget deficit can, but the whole country's budget deficite (public+private) cannot.
Deficit = Expenditure - Income. If the government pays a dollar to the private sector, the government's expenses go up one dollar, and the private sector's income goes up one dollar too. Hence, the deficit of the whole nation is not affected.

Aha. We were thinking of different budgets. I'm not too familiar with "whole country" budgets.

But that still doesn't satisfy my curiosity. In theory a "whole country" budget can run an entirely internal deficit, right?

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Whenever that was the case, the exchange rate of the dollar falls and makes American wages, measured in foreign currency, competitive again.

Competitive in comparison to what? Are you talking about Europe?

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Insofar as American wages are too high, the problem is self correcting within months.

I'm not sure I'd agree on the "within months" part. One of the things I've been thinking about was whether we are witnessing a correction. I am wondering if what you ascribe to education might be some of this correctional shifting.

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The non-self-correcting part is caused by private and public borrowing. A search for "competitiveness" on the inofficial Paul Krugman page, www.pkarchive.org, should turn up the economic reasoning behind it in more detail.

That search also leads to a bit more reading than I'm prepared to tackle right now. Is there an article in particular that you have in mind?

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I do shop at Sam's Club if they have the product and they beat out Costco on the price -- the store is closer to my house and business. Wal-Mart I find is not always the cheapest and I don't really believe they treat their employess any better of worse than most retail. I have bought from Target many more times over the years over Wal-Mart and I actually spend close to equal time at Costco because of their superior selection of product. If you go into Robinson's/May and purchase, it's likely you're getting a product made in a foreign country where the labor could easily be classified as "sweat shop" level. It's a tough call to say whether this is bad or good but I would say that I am steered by the bad publicity to stay clear or Wal-Mart, although the primary reason is the stores are so huge, you have to carry water and a sandwich with you (certainly wouldn't eat at their fast food counter).

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Craven de Kere wrote:

But that still doesn't satisfy my curiosity. In theory a "whole country" budget can run an entirely internal deficit, right?

Wrong. To see why, imagine that the US was the only one country on the whole planet. Because every dollar spent by someone is a dollar received by someone else. There would be no way the country as a whole could run a deficit, because the excess money spent has to go somewhere, which makes it show up as excess money earned on the recipients balance sheet.

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Whenever that was the case, the exchange rate of the dollar falls and makes American wages, measured in foreign currency, competitive again.

Competitive compared to the wages of other countries per unit of productivity.

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That search also leads to a bit more reading than I'm prepared to tackle right now. Is there an article in particular that you have in mind?

A good primer is Competitiveness -- a dangerous obsession.

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Thomas wrote:

Craven de Kere wrote:
But that still doesn't satisfy my curiosity. In theory a "whole country" budget can run an entirely internal deficit, right?

Wrong. To see why, imagine that the US was the only one country on the whole planet. Because every dollar spent by someone is a dollar received by someone else. There would be no way the country as a whole could run a deficit, because the excess money spent has to go somewhere, which makes it show up as excess money earned on the recipients balance sheet.

I see what you mean, that would leave only things like devaluation as places where it could go.

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Competitive compared to the wages of other countries per unit of productivity.

Yeah, but what other countries? I'm sure you don't mean that the US becomes competitive in manufacturing with countries like, say, China through currency devaluation.

Thanks for the link, it was the first on the SERP but I wasn't sure it was the one you had had in mind.

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Craven de Kere wrote:

Yeah, but what other countries? I'm sure you don't mean that the US becomes competitive in manufacturing with countries like, say, China through currency devaluation.

Note that I put in "per unit of productivity". American workers get much higher wages than Chinese workers. But they are also much more productive, so they can compete even at these wages. Again, it's important to distinguish between countries as a whole and any single sector. There may be markets in which America isn't competitive, so imports products from that market instead. But for every such market, there will be another market in which America is more competitive than China, so exports the products in this market. In China's case, the exported good is Treasury bonds. China is a major financier of America's federal budget deficit. But that's a choice America made, so it's unfair to blame China for running a trade surplus with America.

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Yeah, I'd noted you said that and had what you just said in mind.

But the things poeple are complaining about are things that places like China are simply more competitive in, and I don't think it will change.

I'm not sure what the productivity unit takes into consideration. Do services count?

When you say "much more productive" I think we are talking about different kinds of productivity.

I think that different kinds of productivity are important. In the shift to services I wonder if the end result is simply fewer jobs in the service economies.

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Thomas wrote:

Whenever that is the case, the exchange rate of the dollar falls and makes American wages, measured in foreign currency, competitive again. Insofar as American wages are too high, the problem is self correcting within months. The non-self-correcting part is caused by private and public borrowing. A search for "competitiveness" on the inofficial Paul Krugman page, www.pkarchive.org, should turn up the economic reasoning behind it in more detail.

Well, I just read the article you indicated to me. And it did not contain much about this statement.

Could you summarize? I don't mind the "read a tome" but I suspect that were I to read all 39 articles in the SERPs I was directed to I'd still come back with this question.

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OK, I could've more accurately titled the thread "Wal-Mart Signifies Much of What is Wrong with Capitalism as It is Practiced in the United States"...

...but that wasn't provocative enough to elicit a nice quantity of strident responses. :wink:

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Thanks PDiddie! I was afraid for a moment that we were highjacking your thread .

Craven -- From the standpoint of a investor, your wage, personally, is uncompetitive if the market price of the dollars you get is higher than the market price of the services and products you make. If this is true in the aggregate, i.e. for the wages of a whole country, that is another way of saying that the market price of dollars is lower higher than the market price of the goods you can purchase with them. This creates an incentive for the investor to sell his dollars while they're still overvalued, thereby bidding down the exchange rate of the dollar.

Sorry that wasn't in the text. It's the opening chapter of Krugman's book "Pop internationalism". I know it's somewhere in that book, and thought it was in the opening chapter. Turns out I was wrong.

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On thing that I do think that chapter answered is that they are indeed taking services into account.

If we are talking about Wal-Mart characteristics I don't think service competitiveness is relevant. Many of the complaints here are about things related to manufacturing competitiveness (except for the complaints about how Wal-Mart treats and pays employees, which I find to be a red-herring since, as LW noted, all retail is about the same).

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The policy manuals of retail operations are remarkably alike, all devised by banks of attorneys to protect the corporation from employee abuses. Funny, they don't have any policies protecting the employee from company abuses. Of course, you could say that about any large company that goes to the lengths of having attorneys write their company policy manuals. Retail is retail and if it is in the selling sector it is true than many people do end up making a lot of money in sales. In fact, in a survey a few years back, Fortune magazine came up with the statistics to proclaim that the highest paid profession is not doctor, lawyer. nor Indian chief (sic) -- it's sales.

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(Of course, I was being facetious about Indian chief considering all the publicity the Indian casinos have been receiving in California during and after the Schwartzenegger election -- they are, I assume, doing quite well).

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An unholy alliance if ever there was one:

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Premier Retail Networks has inked a deal with Fox News Channel for the service to become the exclusive "breaking-news" provider to Wal-Mart Television Network.

Under the deal, terms of which were not disclosed, Fox News will supply live breaking-news segments and alerts for retailer Wal-Mart Stores Inc.'s in-store network, which has multiple monitors in some 2,450 stores nationwide and generates more than 150 million impressions monthly, according to Nielsen Media Research.

A spokeswoman for PRN -- which also supplies programming to in-store networks found in Best Buy Co. Inc., Circuit City Stores Inc., Sears, Roebuck & Co. and other retail chains -- said Wal-Mart TV also includes content from FitTV and Oxygen, as well as promotional and product information.

"As the No. 1 cable news channel in America, we are proud to partner with PRN to deliver our news to Wal-Mart customers nationwide," Fox News vice president of affiliate sales and marketing John Malkin said in a prepared statement. "This is a great opportunity for Fox News to provide breaking news to a significant audience."

Fox News: Attention, Wal-Mart Shoppers

Sheeple everywhere are clapping their little hooves together in joy.

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Fox News has always been primarilly a marketing channel, selling their conservative ideals to others. Why not let it all hang out? The economy depends on consumerism but not at the discount stores. It's when people loosen up their pocket books to buy items they don't really need. In shopping the Internet, I seldom find Wal-Mart has the lowest price. There are smaller operation who have very low overhead and have figured out how to warehouse and ship economically to make a profit. You won't find any fine art, lighting systems or high end furnishings and they won't sell well on the Internet because the buyer needs a knowledgable salesperson/consultant/designer to address face-to-face in order to buy wisely. That will never change. I'm doing a full on interior in an affluent section of Newport Beach right now and they are paying far less for individual pieces than the average consumer can go out and purchase.

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If Walmart is so bad, why do people shop there? Because it delivers what they want.

The reason that the mom and pop businesses go under when Walmart arrives in town is that they can not deliver goods and services to customers as cheaply as Walmart. Satisfying the customer and maximizing the value they get for their wages seems to be the last concern of any of the Walmart-haters on this thread.

A lot of Mom and Pop blacksmith shops in small towns went out of business when the automobile was introduced. Should small towns legislate a return to horses to preserve those blacksmith jobs? A lot of small grocery stores in small towns went out of business when supermarkets came to town. Should small towns ban supermarkets to preserve tiny Mom & Pop groceries with higher prices and less choice?

The facts are that in a healthy economy there is some creative destruction that ultimately benefits everyone, though at the temporary expense of a few. When they introduced the power loom, it put a lot of hand weavers at home out of work while creating many more factory jobs and deliver much cheaper textiles to the consumers. Walmart creates wealth in small communities by making their dollars worth more. That comes at the expense of local retailers who sell their goods and services at retail as opposed to Walmart's discounted prices.

If you live in a small town, Walmart is wonderful. It delivers a lot more variety, does so cheaper, and it's always open. It's obviously an improvement in your life. It is amusing to read the liberal snobs here on this thread assert that they would never condescend to shop at Walmart and so nobody else should be free to shop there. Basically, they argue against the freedom to shop where you please and the right to dispose of your property as you please. The elitists who oppose Walmart are simply reactionary troglodytes, furious with progress, who need to be dragged, kicking and screaming, into the future.

Tantor
Editor For Life
Conservative Propaganda
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The elitists who oppose Walmart are simply reactionary troglodytes, furious with progress, who need to be dragged, kicking and screaming, into the future.

Do you really expect anyone to engage in reasoned discussion with you when you say things like this?

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hobitbob wrote:

Do you really expect anyone to engage in reasoned discussion with you when you say things like this?

Why not, as long the ad personam provocation comes at the end of a post in which he makes reasonable points? For example, Piffka gave me her share of ad personams in this thread too. But she packaged them with some reasonable points, so it didn't keep me from engaging in reasoned discussion with her. (Or him? Not sure.)

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Who needs to be dragged into the future kicking and screaming? Wal-Mart is nothing new, at least
here in Southern California. There are product sales and services that the small store (rather Momma and Poppa or not) do better. I prefer to go to a local aquarium store where the specialize instead of Petco, for instance. You get very little advice that is helpful in the big stores. I wonder why?

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It is interesting how the capitalist process is inevitably destroying competition, freedom of enterprise and individual choice.

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Wal-Mart signifies all that is wrong in America

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