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The Steroids Era and Wal-Mart

July 31, 2009 By wuwm

When we look back on The Steroids Era in baseball, we’re going to see a bunch of players who broke the rules and grew to an unnatural behemoth size, and how the people who were supposed to provide oversight either turned a blind eye or even encouraged it.

Well, if you think about it, wasn’t our economy in sort of a similar Steroids Era?  Real estate prices were pushed to unsustainable levels, Wall Street raked in unhealthy and astronomical profits, and our SUV’s looked like they had a case of elephantitis.  

The poster child for the Excess Economy was Wal-Mart, the king of suburbia that built Big Box Supercenters anywhere it could find cheap land, introduced oversize shopping carts for its Canyero-driving customers, bought cheap goods in bulk from China, and was the darling of Wall Street.

Like in MLB, the oversight into Wal-Mart’s unprecedented behavior didn’t exist.  Bush was Bud Selig.  So while Wal-Mart may have broken records, it left an ugly legacy on the American economy by destroying small towns, short-changing workers, and selling out American vendors in favor of China.

I’ve had enough with The Steroids Era, and so that’s why I’m doing some work with Wake Up Wal-Mart this summer.  Like in baseball, it’s time to reform the system and restore American tradition in our economy.  Join us if you’re sick and tired another so-called “record breaker” juicing the system.  

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Comments

  1. kirth says

    July 31, 2009 at 2:34 pm

    But no one’s on base.

    <

    p>I do agree that the world is not better with Wal-Mart in it.

  2. johnd says

    July 31, 2009 at 3:13 pm

    and will never stop shopping there (I just steam/shower after I shop there thanks to the clientele). Some people, especially here at BMG, will trash Wal-Mart on a daily basis but the fact of the matter is they survive and thrive because Americans love shopping there. They only succeed in beating their competition (in small, medium and large towns) because they beat their competition hands down. If America and Americans do not want the likes of Wal-Mart to survive, they’ll stop shopping there and Mom & Pop stores will flourish. I see the same thing happening with Home Depot and the small hardware stores in my town and my feeling is the same… survive or die.

    • dcsurfer says

      July 31, 2009 at 3:35 pm

      Gee, we thought people shopped there because they hated it.  We assumed the prices were higher, and people hated spending the extra money, too.

    • christopher says

      July 31, 2009 at 4:11 pm

      Intentionally or not though, you make the case FOR oversight.  Consumers will always look for the best deal and we can’t really blame them.  That’s exactly why government needs to step in and require good wages, good working conditions, and environmental standards.  Otherwise, these businesses will cut corners, saving a buck to make a buck, and the consumers will reward them with their business with hardly a thought to the less obvious consequences.  Personally, I think Wal-Mart is a mixed blessing.  On the one hand in places where there is hardly an economy to speak of it can come in and provide a community with several jobs, and possibly attract other businesses to the area in the process.  On the other hand, if there is already a good economic climate in place, Wal-Mart becomes the 800-pound gorilla that the small businesses have no hope of competing with.

      • kirth says

        July 31, 2009 at 6:03 pm

        of Wal-Mart’s business plan is actually to reduce the number of both available jobs and other businesses. Here’s how it works:
        = Wal-Mart enters a market area and opens a bunch of stores, saturating the market and offering lower prices than existing businesses. This does create jobs.

        <

        p>= Bargain-hunters naturally take their business to the Wal-Mart stores. This eventually forces the other stores out of the area. That costs some jobs.

        <

        p>= Once the other stores have folded, Wal-Mart closes most of the stores it opened, leaving only one or two in the area. Now the bargain-hunters who don’t live close to the remaining Wal-Mart have to travel farther. They can’t shop elsewhere; all those other stores are gone. So are the jobs that those stores provided. So are a lot of the jobs that the bunch of new Wal-Marts initially provided.

        <

        p>= Now Wal-Mart is in the catbird seat. They don’t have to keep their prices low, because there is no direct competition in the area. They don’t have to pay competitive wages, because there are no competing employers. It’s a win-win! Unless you’re an employee, or a former store owner, or somebody who likes shopping choices, or a town that used to have some of those defunct stores paying taxes.

        <

        p>It’s similar to how other big-box stores operate, except for the deliberate saturation of a market with the goal of eliminating all competition. Home Depot doesn’t do that; probably they can’t, because they don’t have such a broad range of offerings. Wal-Mart can and does wipe out department stores, pharmacies, and groceries when it plasters an area with its stores.  

        • christopher says

          July 31, 2009 at 7:07 pm

          …I said the blessing side applies when there is no economy already in place, if for example the town WAS a manufacturing hub until the company that employed everyone shut its doors.  There are a few kinds of business that CAN follow Wal-Mart into a location, such as gas stations, restaurants, and other services.  I’m not aware of any location that does not keep it’s prices low.  In fact all the locations I’m personally aware of (granted a relative handful) are part of heavily developed retail areas.

          • kirth says

            July 31, 2009 at 8:55 pm

            Wal-Mart Low Prices Myths

            <

            p>What Is Wal-Mart’s Winning Strategy?

            How does the number-one retailer maintain an image of low prices? First, by actually making sure its prices are lower than its competitors, at least on key items. These items are called “price-sensitive” items in the industry, and it is commonly believed that the average consumer knows the “going price” of fewer than 100 items. These tend to be commodities that are purchased frequently.

            A mid-size Wal-Mart supercenter may offer for sale 100,000 separate items, or stock-keeping units (skus). Wal-Mart and other major retailers believe that the general public knows the going price of only 1 to 2 percent of these items. Therefore, each Wal-Mart store shops for the prices of only about 1,500 items in their competitors’ stores. If it is ever found that a competitor has a lower price on one of these items than Wal-Mart, the store manager will immediately lower his or her price to be the lowest in the area.

            On those infrequent occasions when I’m in W-M, I often see things that cost more than elsewhere.

            • kbusch says

              July 31, 2009 at 10:02 pm

              My barber has offered me a simple example. He sells a nonbreakable pocket comb for 25 cents that he procures from his vendor for eight cents. Wal-Mart sells a lower-quality comb for 98 cents, and one would assume that Wal-Mart pays less for it than the barber does. People keep buying Wal-Mart combs, however, because the average person does not know the going price of a pocket comb, and it is automatically assumed that the Wal-Mart price is the lowest.

            • christopher says

              August 1, 2009 at 12:12 pm

              I’m just going by my own experience.

        • kbusch says

          July 31, 2009 at 7:11 pm

          But that’s how capitalism mostly works.

          <

          p>Every industry is supposed to get more efficient and shed jobs, so that social resources can be freed for other more productive activities. (I’m not so sure about the monopolistic aspects in your last point, though.)

          <

          p>This harsh reality is supposed to be mitigated by a benevolent social welfare state to protect dislocated workers, a vigilant regulatory regime to prevent abuses, and a wise national economic policy to nurture new industries.

  3. edgarthearmenian says

    July 31, 2009 at 3:25 pm

    anti-Walmart crowd:  do they know what it was like to work in some of these mom and pop stores before the advent of the big box stores?  The so-called small town traditional stores could be nasty places: low wages, exploitation of young people working too many hours; no social security wages withheld (the government didn’t have the controls on payroll taxes that it has today); arbitrary firings; hiring mostly part-timers so as not to have to pay a living wage to full-timers, etc. I know that Wal-Mart has its faults, but let’s not romanticize their predecessors. It sort of reminds me of all those pharmacists (with their six figure incomes and houses on the cape) who are always complaining about Walgreens and CVS.

    • dcsurfer says

      July 31, 2009 at 3:39 pm

      I thought it might be JohnD Republican sixing the praise of big government and unions, but no, all is right with the world…

      • kbusch says

        July 31, 2009 at 4:04 pm

        It seemed thoughtful to me: Particularly the perspective of not romanticizing what Walmart has replaced. I think the problem of regulation is delicate and complicated. For example, I miss the disappearance of so many bookstores, but I’ve purchased almost all the books I’ve read recently from Amazon.

        <

        p>Further, I suspect that corporate citizenship will improve not by opposing Walmart so much as by enforcing the law. The last decades of Republican ascendancy have demolished regulatory machinery with the expected results. In a political economy with weak regulation, the market forces companies to break the law or lose out competitively.

        <

        p>The other commenter whom you mention has merely provided troll bait and is best left unanswered.

    • kbusch says

      July 31, 2009 at 3:50 pm

      If I’m not mistaken, there are three kinds of complaints against Walmart:

      • There are a number of things to like about the less economically efficient businesses it drives out, e.g., personal service, lack of uniformity, locality, etc.
      • Walmart’s efficiency is soulless. It supports organic agriculture. It pays little and sets shifts arbitrarily.
      • On equal pay, overtime, and who knows what all else, its policy seems to be no better than to avoid getting caught.

      By contrast, I think of two businesses, Google and Polyface Farm. Google’s business model requires trust. Otherwise, you’re not going to save your personal data on their servers. Their “Do no evil” business ethic is pushed on them economically. Polyface Farm’s business model has the idea of customers building a personal relationship with the guy who raises the chickens.

      <

      p>Walmart has no such similar pressure. They offer the best deal. That’s it.

    • kirth says

      July 31, 2009 at 4:08 pm

      Here’s a partial list of Wal-Mart’s greatest hits, copied from an old comment of mine:

      <

      p>o Locking workers in the store overnight, with no way for them to get out in an emergency.

      <

      p>o Multiple findings by the NLRB and the courts that Wal-Mart illegally blocked workers from organizing.

      <

      p>o Deliberate failure to pay overtime.

      <

      p>o Deliberate failure to pay for all hours worked.

      <

      p>o Paying so little that many Wal-Mart workers rely on public safety net programs– such as food stamps, Medicare, and subsidized housing-to make ends meet.

      <

      p>If the old mom-and-pop stores were so terrible, at least everybody knew who they were, and there were alternatives for both shopping and employment.

  4. dcsurfer says

    July 31, 2009 at 3:47 pm

    It’s as though we as a nation were all looking the other way, though.  Some weren’t, like you and James Kunstler, but both baseball and Walmart relied on a crowd mentality, that 50,000 people driving into this parking lot can’t be wrong.

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