When Did This Happen

I'm not much of a shopper, I certainly go out and buy stuff when I need it, but the idea of browsing stores, or even the weekly fliers gives me a headache. (spoiled I know, I've always worked and had a reasonable income). As well I spent most of my professional life covering the people and industries that produce stuff, not consume it. However, somewhere after the big free trade debates in the mid-eighties  the measuring stick for how well the economy is doing began to seriously tilt towards measuring and understanding consuming, and away from producing. This was fed by politicians (many many more consumers out there than producers), and the media.  I can understand why. The consumer side continues to be much more relevant to reporters and others, the price of things is there for everyone to see (who knows how much it costs to catch a lobster or grow a potato), Statistics Canada monthly produces all kinds of data on the consumer price index, inflation measures what consumers pay for things,  and the media (we all) loves things with numbers (temperatures, sports scores, the stock market, political polls)  because it's something we can all understand, and that's important, BUT it's not all that matters.

(OK now I'm getting cranky) I blame a lot of this on Walmart, and that dreadful smiling thing that continues to knock back prices. Every time it knocks a few cents off of something, you know some producer somewhere (almost always in some developing country with a labour force paid pennies an hour) has been squeezed a little harder to produce it for less. It certainly isn't that Walmart is cutting its profit margin.  Several members of the Walton family continue to be in the top ten richest people in the world. The Arkansas county where Walmart is headquartered has more millionaires than anywhere else.  The trick here is that it controls more shelf space than anyone, and if you're a producer it's where you have to be, so when the Walmart buyer comes to town and says you've got to cut your price, you do it and take it out of someone else's hide to cut your costs.  There has been the odd rumbling that U.S. states' Attorneys General should launch a combines/competition investigation into Walmart, but politicians know anyone who messes with a company that champions giving consumers cheaper prices won't get re-elected.

When I took economics at university (back in the Dark Ages) there was well-established economic theory that when producers are fairly paid (the people at the ground floor of the production cycle) that everyone benefits (more of a trickle up theory), because primary producers spend money to make more money, on lawyers, accountants, machinery shops, boat builders etc, and all get a piece of the action, and the money circulates (multiplies really, gets spent again and again) within a local economy.  The trouble with trickle down is that the wealthy  put their money into hedge funds or off-shore bank accounts, and it often disappears from the local economy very quickly.

Primary producers now aren't making any money, so spend less, and what money they do spend comes out of their equity (always a chance that things will get better, right??).  It also supported manufacturing jobs (usually with unions), and a much larger middle class, which most agree offers the best social and economic stability. But those days are disappearing if not gone. And it gives the Walmart little smiley face all the more inmpact with people struggling to pay their bills.


For what it's worth, a little insight to our pals at Walmart (and I haven't fact-checked everything):

1. At Wal-Mart, Americans spend $36,000,000 every hour of every day. 2. This works out to $20,928 profit every minute! 3.. Wal-Mart will sell more from January 1 to St. Patrick's Day (March 17th) than Target sells all year. 4. Wal-Mart is bigger than Home Depot + Kroger + Target + Sears + Costco + K-Mart combined. 5. Wal-Mart employs 1.6 million people and is the largest private employer,  and most can't speak English. 6. Wal-Mart is the largest company in the history of the world. 7. Wal-Mart now sells more food than Kroger & Safeway combined, keep in mind they did this in only 15 years. 8. During this same period, 31 Supermarket chains sought bankruptcy. 9. Wal-Mart now sells more food than any other store in the world. 10. Wal-Mart has approx 3,900 stores in the USA of which 1,906 are Super Centers ; this is 1,000 more than it had 5 years ago. 11. This year, 7.2 billion different purchasing experiences will occur At a Wal-Mart store. (Earth's population is approximately 6.5 billion.) 12. 90% of all Americans live within 15 miles of a Wal-Mart. 13. The value of product for Wal-Mart passing through the port of San Diego each year is a larger sum than 93% of ALL countries Gross National Product  (GNP) .....and that is only ONE port ...one way – that’s how Wal-Mart gets its stuff. 14. Of the 1.6  million employees, only 1.2% make a living above the poverty level. 15. Wal-Mart's head office is located and centralized in Bentonville. Due to this fact, there are more millionaires per square mile there than any place on Earth. 16. The official U.S. Government position is that Wal-Mart's prices are no lower than anyone else's when compared to a typical families weekly purchases. That's the view of the statisticians at the Bureau Of Labor Statistics (BLS) responsible for calculating the Consumer Price Index (CPI). 17.  92% of everything Wal-Mart sells, comes from China . Another 4% comes from Chineseowned companies in the U.S.or in 3rd world Countries. 18. Wal-Mart and MOST large companies, take out life insurance on its employees, without their knowing.  If an employee dies, ALL the insurance moneys go to the companies. I.e. An employee making $18,000 per year, dies, and the company might make as much as $1 million. Most  often these moneys, coming from what is commonly referred to as "Dead Peasant Life Insurance Policies", is paid out to executives as bonuses. (A common practice, unknown by the average consumer). 19.  Let Wal-Mart bail out Wall Street.  If not, consider shopping someplace else.