Saturday, February 16, 2013

Blowback: Greed Edition

"Where are all the customers? And where's all their money?" frets a Walmart vice president in some panicky emails revealed today by Bloomberg News.

Cameron Geiger, who runs the hilariously-named U.S. Replenishment Division at the world's largest retailer, might start looking at his own employees, whose crappy average $8/hour paycheck has shrunk even further thanks to the rising price of food and medical care and the demise of the two-year payroll tax holiday. Walmart workers are also Walmart's best customers. What's earned in Walmart is spent in Walmart. And the world's biggest retailer just had its worst quarter in seven years.

So, does this mean that the Walmart honchos are going to replenish  their workers with a pay raise to make up for that dent in their paychecks and get them spending again? Of course not. The workers have simply been directed to just try even harder to make those unaffordable cheap items fly off the store shelves into the hands of penniless big spenders. According to Bloomberg,
 Wal-Mart’s Geiger in his e-mail urged employees to improve business by "fixing something that could really make a difference to our performance." He quoted Tim Yatsko, the company’s executive vice president of global sourcing, saying:“We need to ‘stop the stupid.’”
Wal-Mart U.S. CEO Bill Simon said during a Feb. 1 officers meeting, the minutes of which were attached to Geiger’s e-mail, that the troubled economy leaves little room for internal errors.
“In an environment like this, we can’t afford to hurt ourselves,” Simon said, according to the minutes. “Self-inflicted wounds are our biggest risk and our toughest enemy.”
Of course, nothing is being said about healing their self-inflicted wound by raising that abysmal hourly wage. It might have the horrifying result of inspiring other corporations to do the same, even without the unlikely passage of the excessively stingy $9/hour minimum suggested by President Obama. No. Walmart's solution, according to the correspondence, is to grab the ever-shrinking piece of the meager consumer pie all for themselves by whatever means necessary. Who knows -- they may even figure out a way to reduce hours and wages even more and have their lawyers write a whole new tome of corporate welfare legislation. When they talk about "everybody suffering" in their emails, they are not talking about their workers or their customers. They are talking about their business competitors, such as those other go-to shopping centers for the indigent -- the Dollar Store franchises. 

Walmart has always had a ready, willing and able partner in the Obama Administration. The Justice Department recently announced there will likely be no criminal prosecution for violation of the Foreign Corrupt Practices Act of those involved in that Mexican bribery scandal. Michelle Obama has long been a booster of the retail gulag's various greed-washing campaigns for hiring vets and stocking their shelves with healthier food, ignoring its anti-union stance and gender discrimination. And President Obama is now set to appoint Chief Walmart Greed-washer Sylvia Mathews Burwell as his chief budget officer.

The defacto policy of the neoliberal Age of Obama will continue to be: Work hard for less. Always the low standard of living. Always.

Meanwhile, the income gap between the richest of the rich and the rest of us is growing ever wider. The top one percent's share of the pie has risen by 11% since the recovery, and stagnated or shrunk for everybody else, according to a study by economist Emmanuel Saez of UC Berkeley. From the New York Times:
Excluding earnings from investment gains, the top 10 percent of earners took 46.5 percent of all income in 2011, the highest proportion since 1917, Mr. Saez said, citing a large body of work on earnings distribution over the last century that he has produced with the economist Thomas Piketty of the Paris School of Economics.
Concern for the declining wages of working Americans and persistent high levels of inequality featured heavily in President Obama’s State of the Union address this week. He proposed raising the federal minimum wage to $9 from $7.25 as one way to ameliorate the trend, a proposal that might lift the earnings of 15 million low-income workers by the end of 2015.
 
Of course, the Walmart heirs themselves are getting richer by the minute. They now have as much wealth as the bottom 42% of Americans combined. Josh Bivens of the Economic Policy Institute calls them "Exhibit A" in the national scandal of extreme income inequality.  
In 2007, it was reported that the Walton family wealth was as large as the bottom 35 million families in the wealth distribution combined, or 30.5 percent of all American families.
And in 2010, as the Walton’s wealth has risen and most other Americans’ wealth declined, it is now the case that the Walton family wealth is as large as the bottom 48.8 million families in the wealth distribution (constituting 41.5 percent of all American families) combined.
It’s hardly a surprise that the economic circumstances of the Walton family and that of most Americans are moving in opposite directions, but some have attempted to quibble with the use of this particular statistic by noting that nearly 13 million American families have negative net worth—meaning that they have outstanding debts greater than the value of their assets. This is a bit of a strange objection—of course, many American families have negative net worth, but this is an economic reality, not a statistical fluke.
Walmart relies very heavily upon those negative-net worth customers. One of the reasons the retailer is experiencing such a setback this quarter is that IRS tax refunds  (including for those struggling consumers qualifying for the earned income tax credit) have been delayed due to the manufactured feckless cliff crisis and other glitches. 

And how about the other phony crisis known as the Sequester, which is designed to make poor people share the sacrifice with the military industrial complex?  Congress is dealing with it by blowing town for an entire week for an extended Presidents Day seven-day weekend. The president and the missus will be taking their own separate vacations, golfing and skiing respectively.

So that should answer the burning question I know has been on all your minds lately: Where are all our politicians? Where's all our money?
 

13 comments:

Will said...

I remember when the first Dollar Store opened in my area. (Everything's only a buck? How cute!) Now they're EVERYWHERE and always packed with people who can't afford to shop anywhere else. Ugh.

Zee said...

@Will--

I shop at the Dollar Store, and I can afford to go elsewhere.

Their prices are the best in town for toiletries, housecleaning products, etc.

And because the stores are small, unlike the Big Boxes, I can quickly find help if I can't find a particular product.

Love those Dollar Stores!

Will said...

Yep, I love them too, Zee. I just picked up a few pairs of reading glasses at one yesterday, as a matter of fact. I just feel so sad for the growing numbers of people who have no choice, because even freakin' Walmart is too expensive for them these days.

What's that phrase we hear all the time? "A race to the bottom," right? I wonder what's next. Maybe we'll be talking about how great 50 Cents Stores are in a few years.

Denis Neville said...

Dollar stores, pawn shops, payday lenders, check cashers etc. are a growing poverty industry in my area of the country.

Our austerian economy will increasingly become a dollar store economy. The masses unable to afford less and less, will of necessity resort to dollar stores that sell for less. A growing group of chain-store corporations – Family Dollar, Dollar General, Dollar Tree - cater to America's poor.

Dollar store locations correlate with poverty. They have been overwhelmingly concentrated in low income states. But now they are proliferating across the nation, competing with Walmart, as we race to the bottom. Although some affluent shoppers enjoy shopping there for bargains, dollar stores overwhelmingly cater to the poor.

Many are picking up the slack in inner cities where conventional supermarkets don't want to be, in so-called “food deserts.” For many they are the only place to buy food. Dollar stores are at the rock-bottom of the food chain, the last stop before heading to local food pantries. Opponents of dollar stores decry their unhealthy food options.

How do dollar store corporate practices compare to Walmart?

Dollar stores sell cheap goods imported from sweatshops in low-wage countries including China and Mexico. Critics say they exploit store employees by calling them "managers" to avoid laws requiring paid overtime. Assistant managers make $9.30/ hour and sales associates $7.44/hour.

Poverty is the worst form of violence. Where are all our politicians? Do they even care?

“If you're in trouble, or hurt or need - go to the poor people. They're the only ones that'll help - the only ones.” - John Steinbeck, The Grapes of Wrath

Pearl said...

I was told by my local Walmart that other than bb guns no guns are sold in
their stores and that is due to the Canadian gun laws. Since many people do sport hunting in Canada it will be interesting to find out the regulations required for legally buying them. I will try to get further information about this. Toronto has problems with gang shootings but they obtain their
guns by smuggling them into the country from the U.S.

So lotusflower0, who's been shot lately in Chicago?

Zee said...

@Pearl--

Are you asking where Canadians obtain their sporting arms, or are you asking where foreigners who come to Canada obtain theirs? In the latter case, I would assume they bring their own, with appropriate permissions from the Canadian government, of course, as described here:

http://usgovinfo.about.com/
od/rightsandfreedoms/a/
gunstocanada.htm

In the former case, I would assume that there are enough government-licensed—and, I surmise, privately-owned—shops/vendors to supply Canadian needs, as this Wikipedia article describes the hoops through which Canadians have to jump in order to buy firearms.

http://en.wikipedia.org/wiki/
Gun_politics_in_Canada

Or, alternatively, there may be government-operated gun stores in Canada, just as some states in the U.S. authorize sale of liquor only through state-owned liquor stores.

As I don't live there, I don't know for certain, but certainly in the U.S. there are many, many shops other than the “Big Boxes” at which one can buy all manner of firearms.

Incidentally, back in 1987 I was on a camping trip up to Banff and Jasper and took a 12-gauge shotgun across the border after declaring it at some obscure border crossing in Montana. I filled out a simple form, was told that I needed to keep it unloaded, and completed my trip without incident.

Interestingly, for all the strict Canadian gun laws, there are 30.8 guns per hundred Canadians, while there are 88.8 per hundred U.S. citizens, so the difference is only a factor of 2.9.

http://en.wikipedia.org/wiki/
Number_of_guns_per_capita
_by_country

The incidence of gun ownership in England and Wales is 6.2 per hundred citizens, or, a factor of (the reciprocal of) 5.0 less than the Canadian incidence.

Yet the homicide rate in Canada is 1.6 per hundred thousand citizens, and that for the United Kingdom is 1.2 per hundred thousand.

http://en.wikipedia.org/wiki/
List_of_countries_by_intentional
_homicide_rate#By_country

How is it that the Canadians have 5 times the number of firearms per capita relative to the United Kingdom, yet their homicide rates are virtually identical, and in both countries, private ownership of handguns is virtually outlawed?

I suspect some cultural or demographic differences explain this, but I can't prove it.

Just a few thoughts.

Fred Drumlevitch said...

As usual, Karen, your post is right-on regarding the things that ail this nation. And great concise poetic political commentary from you in your previous "Shorter SOTU" post. The American Empire's presidential/congressional "court" really could benefit from a formal position partly like the old court jester, someone close to power who could at least say to power what no one at that level will say. Perhaps you can throw your hat/verse into the ring for a new position! What to call it, though? "Court jester" is nowhere serious enough of a name for someone saying what needs to be said these days, over and over again. The mainstream press --- even the "newspaper of record" --- isn't doing it. Not even Krugman; @Jay - Ottawa's previous characterization of Krugman's NYT's columns as "half-stories" hits the nail on the head. (I think that one of Krugman's fundamental fallacies is that deep down he still wants to believe in the "free market" and "free trade" as 1) able and 2) potentially willing to solve systemic problems. But the business of each business is simply making money, and the true needs of both the nation and the people will always be of little concern to business relative to that "prime directive". What needs to occur --- the promotion of humanistic values such as social and economic justice, and a prioritization of national action and spending (both governmental and private) towards the furtherance of such values --- won't occur under free rein, free-range capitalism).

Older stuff:

I'm glad that your daughter is doing alright after her allergic reaction. For what it's worth (someone else's mileage may vary): I used to have significant allergies and asthma as a kid, and underwent a bunch of tests and an extensive desensitization series that was very helpful. It wasn't a complete cure-all for all allergens, but definitely worthwhile with respect to many. One point for those pursuing the Benadryl route either when an EpiPen is unavailable or would be more than is needed: Benadryl and generic equivalents are available in liquid form as a children's formulation. That probably gets into the bloodstream much faster than either a tablet or liquid-gel, and adults can simply increase the volume taken to ingest an adult dosage. The only downsides of the liquid are 1) that its shelf life is probably less than the tablet form, therefore requiring more frequent replacement and attention to not overheating (i.e. in a camper --- re @Zee's described situation) and 2) the lower portability --- but it's probably faster to take effect and therefore worth having, at least around the house.

With regard to the comments about cats a couple of columns back: I've long thought that several of the classic Ronald Searle depictions were very relevant to contemporary politics. For instance:

http://farm5.static.flickr.com/4123/4749313319_580850e402.jpg

http://farm5.staticflickr.com/4096/4749311293_dff23d38cb_z.jpg

http://wall.alafoto.com/wp-content/uploads/2010/11/Searles_Cats_16.jpg

Isn't that first one particularly relevant to how progressives feel when almost any contemporary politician --- including Obama --- makes an overture to us?!

James F Traynor said...

There is still a chance, I think, that we will not plunge into a Weimarian like period of political violence. To be perfectly selfish about it, my chances of being dead by that particular denouement are pretty good. But one never knows. So many apparently disparate variables can affect the model, and the not so disparate (as the military are well aware) such as climate change. My big hope is that demographic shifts in this country will work towards a 'kinder, gentler' electorate, one less teutonic in outlook. On the other hand ...

My pessimism was fed a couple of days ago by an extended conversation I had with an older woman who's son and friends were getting increasingly desperate over the financial situation, working class people who are feeling more and more helpless by the day. The beast is pacing its cage more rapidly, beginning to whimper, occasionally pawing at the door. Time may be shorter than I think.

Denis Neville said...

@ James

I share your pessimism as I too am witnessing a lot of despair.

People nearing retirement age, who will be unable to keep their homes or pay their rent because their retirement income, primarily from Social Security, will be insufficient. Economic insecurity and misery will be the norm during the later years of their lives.

“In each human heart are a tiger, a pig, an ass and a nightingale. Diversity of character is due to their unequal activity.” - Ambrose Bierce

Kansas is abandoning its poor. Governor Sam Brownback and Republicans are waging war against low-income families. They are not only raising taxes on the poor, but also cutting the safety net programs, compounding the hit. The poor are stereotyped and stigmatized, condemned, despised, and indicted as undeserving. It all reminds me of the British government’s policy towards Ireland during the famine years and the propaganda of the British press at the time.

“Have no fear of robbers or murderers. They are external dangers, petty dangers. We should fear ourselves. Prejudices are the real robbers; vices the real murders. The great dangers are within us. Why worry about what threatens our heads or purses? Let us think instead of what threatens our souls.” - Victor Hugo

384,000 Kansans, or 13.8 percent of the state’s population, live at or below the poverty line, $23,050 a year for a family of four. Among children, the numbers have jumped 34,000, from 14.5 percent to nearly 19 percent. Brownback’s refusal to expand Medicaid under Obamacare means that 120,000 to 140,000 low-income Kansans will remain uninsured.

“When it shall be said in any country in the world my poor are happy; neither ignorance nor distress is to be found among them; my jails are empty of prisoners, my streets of beggars; the aged are not in want; the taxes are not oppressive; the rational world is my friend, because I am a friend of its happiness: When these things can be said, there may that country boast its Constitution and its Government” ― Thomas Paine, Rights Of Man

Life is just one damned thing after another.

"Unless a man has the talents to make something of himself, freedom is an irksome burden...We join a mass movement to escape from individual responsibility, or, in the words of an ardent young Nazi, 'to be free from freedom.' It was not sheer hypocrisy when the rank-and-file Nazis declared themselves not guilty of all the enormities they had committed. They considered themselves cheated and maligned when made to shoulder responsibility for obeying orders. Had they not joined the Nazi movement in order to be free from responsibility?" - Eric Hoffer, The True Believer

Our lives are like a candle in the wind.

“My candle burns at both its ends;
It will not last the night;
But oh, my foes, and oh, my friends --
It gives a lovely light.”
- Edna St. Vincent Millay

Zee said...

@James and @Denis--

I have never felt any resentment for the rich, as long as their wealth was come by honestly. I have opposed on principle imposing tax rates on the wealthy that I regard as “confiscatory,” again, as long as that wealth was come by honestly.

It is a matter of principle for me not to tell any individual how much is “enough” for him- or herself—not knowing anything about their individual circumstances—or to tax people as a means of punishment disguised as “fairness.”

But as I survey the staggering concentration of wealth that has occurred in this country over the past 30-40 years—along with the jobs shipped overseas and the shattered dreams of the 99%—I have to ask myself, “How much wealth is enough?” and “Where are 'conscience' and 'humanity' in all this?” Indeed, where is any element of “patriotism” in all this?

What happens when Wal-Mart has no one who can afford its wares, as seems to be becoming the case in the U.S. per their lousy February earnings report? Where do the Wal-Mart heirs live when this country becomes uninhabitable and/or unsafe for the mega-wealthy?

Norway? Sweden? Switzerland? They are small countries, and rather picky about whom they choose to let in. Also, kinda cold and dark, and not just in winter. Can they all fit into Lichtenstein or Monaco?

It just seems logical to me that at some point the mega-wealthy might choose to voluntarily spread some of their wealth around—without the “prodding” of confiscatory taxes—just in their own self-interest, if this country and its people matter to them at all.

It may be partially myth that Henry Ford more than doubled his employees' wages and bonuses just so they could buy his product, but the fact is that he did just that, and other auto manufacturers were forced to follow suit,

http://en.wikipedia.org/wiki/Henry_Ford

http://blogs.telegraph.co.uk/finance/timworstall/100016570/
lefty-myths-of-our-time-why-henry-fords-pay-rise-for-workers-
undermines-the-living-wage-campaign/

giving “Motor City's” (and environs') workers access to the middle-class.

(My mother and her father—a machinist—both earned quite good livings at White Motor Company in Cleveland, OH, ultimately giving you all the questionable gift of moi. )

During the financial crises of 1893 and 1907, no less than the “robber-baron- non-plus-ultra ” himself, J.P. Morgan, worked to stabilize the American economy.

I do not doubt but that he had his own interests at heart, and that he maybe even made a profit from his aid. But I surmise that in some small corner of his heart he also acted in the interests of the country and the people who made him unbelievably wealthy, too.

Is that naïve of me?

So, when will the mega-wealthy of this country decide to act like a Henry Ford or a J.P. Morgan, and do not only for themselves, but for the greater interests of the people and the country?

And if “never,” well, what then?

“Remember, democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide. It is in vain to say that democracy is less vain, less proud, less selfish, less ambitious, or less avaricious than aristocracy or monarchy. It is not true, in fact, and nowhere appears in history. Those passions are the same in all men, under all forms of simple government, and when unchecked, produce the same effects of fraud, violence, and cruelty.” --John Adams

http://en.wikiquote.org/wiki/John_Adams

I fear that we may be near the tipping-point and share your pessimism, and, like you, @James, I hope that I may be gone to the great beyond before all implodes.

Zee said...

As for POTUS, FLOTUS, and the entire U.S. Congress going on vacation while the country flounders and stagnates, well, one wonders what good any of them have done even while on the job over the past 12 years.

James F Traynor said...

Yes, Zee, I think your naive. Athens, one of the early sites of democracy did commit suicide through imperialism. And the guy, John Adams, that pointed that out established the Aliens and Sedition Act. And Ford was anti-labor and fired workers that didn't go to church on Sunday. No, I don't hate or envy these people, they had their place. And I have mine.

Jay - Ottawa said...

What brings so many of us here to read Karen Garcia's -- and each other's -- views about a democracy going south may be a phrase I just saw in Chris Hedges' Monday morning rant: a "flicker of consciousness." That's what's missing and why we come here: to keep alive that "flicker of consciousness" in ourselves and each other.

In the vivid parable about Dives and Lazarus it was clear that the rich man had snuffed out the "flicker of consciousness." He wised up too late to benefit himself, his brothers or the beggar outside his gate. Today there is far more than one Lazarus outside the gates of the rich in America. Do the Waltons ever see themselves as The New Dives?

One way or another prophets down to our own time remind us that a "flicker of consciousness" is an absolute "must" to hang on to one's soul. The more secular and clear-eyed political commentators would say a "flicker of consciousness" is needed simply to hang on to our humanity and to bind a civil society together.

Unless Americans decide to take better care of each other, we're reeling back to red tooth and claw, where life again becomes solitary, poor, nasty, brutish, and short. It's already nearly impossible to go about one's daily rounds without passing by or reading about another Lazarus.

All kinds of crises are descending upon Washington this month, yet the President and the Congress are taking time off out of town. Our leader, The Great Illusionist, is boosting tourism (for foreigners!) at Walt Disney World. Then back to the sunny links.

At least a few of us are doing just fine. A couple of hundred million more to go.