View Single Post
  #14  
Old 08-10-2008, 02:06 AM
ajmccarrell ajmccarrell is offline
Registered
 
Join Date: Jul 2006
Location: Seattle
Posts: 845
Default

Walmart likely had nothing to do with your plant closing. They generally buy from the same suppliers everywhere. Try looking up "consumer surplus" and you'll have an idea of what I'm talking about. I'm fairly well off and I still shop at Walmart. Granted that their produce doesn't last as long as buying it from a farmer's market, but in all of the Walmarts I have shopped in in about 20 states, I have NEVER seen what you are describing. The meat and produce is generally just fine. There have been a couple of days where it did seem old, perhaps you were in on an off-day?

If the factories closed down, it likely was because their stuff was just plain too expensive for resalers. This is why I dislike unions. Companies like Walmart and the lack of unions cause deflation and more market efficiency, which increases consumer surplus, or at least maintains the same ratio of money to goods and services. Unions are a cost push inflation that drives up production costs by more than the pay raises, typically. They severely limit the ability of a company to be agile in the face of competition. It creates a monopsonistic situation with labor factors, which is the cause of the inefficiency. Look at what has happened to Ford and GM, it is largely because their cars are too expensive because their labor force is too expensive. If you like your manufacturing job, learn the meaning of restrain with union contracts and the true costs of labor. This is why minimum wage hikes don't work. Because of the marginal cost of labor, companies have to raise their prices by more than the wage hike to maintain the same level of profitability, or in the cases of most manufacturing facilities in the US, unprofitability. The net result is that consumers can get substitute goods much cheaper elsewhere. Raising prices is typically all that companies can do to keep afloat and compete with companies overseas. The solution is to lower the costs of factors of production, not raise them, which is what unions don't get. It's very simple.

The problem is that all of the mom & pop retailers you were talking about were vastly more expensive, because of the basic principle I explained above. Walmart coming in provided savings to poor people. Do you want the poor people to not be able to buy as much food or stuff for their homes?

If you were to look at macro figures for towns where Walmart has come in, the GDP of each small town has gone up, not down. Any time there is efficiency in any market, some people will lose their jobs. It happens. But because of that, the other people in the community can raise their standard of living.

Try reading Economics in One Lesson by Henry Hazlitt. You can find online texts. It summarizes in one book what many years of school taught me. Don't let the title fool you, "the lesson" is some 150 pages long. Hazlitt was a good pal of Ayn Rand and of Alan Greenspan. He's a little more on the intellectual side than any Fonda would be. John Steinbeck was also a communist, "Steinbeck's literary background brought him into close collaboration with leftist authors, journalists, and labor union figures, who may have influenced his writing. Steinbeck was mentored by radical writers Lincoln Steffens and his wife Ella Winter, and through Francis Whitaker, a member of the United States Communist Party’s John Reed Club for writers, Steinbeck met with strike organizers from the Cannery and Agricultural Workers' Industrial Union.[" (wikipedia, John Steinbeck)

Last edited by ajmccarrell; 08-10-2008 at 02:12 AM..
Reply With Quote