Liberal economist lauds Wal-Mart effects

Richard Rider, Chairman, San Diego Tax Fighters Richard Rider, Chairman, San Diego Tax Fighters 9 Comments

Share

Rostra commenter “Gwendolyn” and I have exchanged acerbic comments here on the Wal-Mart ban. Naturally, she cited labor union/left wing “studies” intended to show how evil Wal-Mart is. Of course, I could counter with free market-friendly website rebuttals.

But I don’t have to.

Instead, let’s go to an impartial source — a leading economist in the Obama administration who has clear-cut liberal credentials. Economist Jason Furman was an early supporter and adviser of Obama. He’s now Obama’s Deputy Director of the National Economic Council.

Granted, the hard left considers him rather centrist (by their standards) which makes him a pretty good researcher into the effects of Wal-Mart.

In spite of his liberal tendencies, Furman has concluded that Wal-Mart is, as he describes it — “a progressive success story.”

I’ll not belabor the obvious — Wal-Mart has been a great benefit to the poor and working class folks of America. And the negatives of Wal-Mart (as seen by labor unions) have been overblown, to put it mildly.

You can (and should) read his 16 page Wal-Mart study summary here:
www.americanprogress.org/kf/walmart_progressive.pdf

In addition, here’s a blog item U-T opinion editor Chris Reed wrote about the planned Wal-Mart ban this past spring.  He references the Furman study (and yes, Chris Reed is pro-free market):

Low prices? Evil. Non-union jobs? Evil. Coherence? Absent.
Written by Chris Reed
3:51 p.m., Apr 15, 2010

Five years ago, the argument that the largest U.S. provider of inexpensive goods and groceries and the largest U.S. employer of those with limited job skills was actually bad for poor people was so thoroughly pulverized by a prominent liberal economist that it began to recede from serious public discourse.

Writing in the American Prospect magazine, Jason Furman – senior economics adviser to Democratic presidential candidate John Kerry in 2004 and now one of the two or three most influential economists working in the Obama White House – described Wal-Mart as a “progressive success story.”

Read the rest of the Reed article here.

Share

Comments 9

  1. While working at my desk I caught bits & pieces of this afternoon’s city council meeting. There was a lengthy discussion about the IT outsourcing that concluded around 5:30pm. At that time new Council President Tony Young asked that the City Clerk remove the item related to the override of the Mayor’s veto of the “Wal-Mart ban.” I know the council still had other items on the agenda to discuss but I’m curious if anyone knows if this item was removed by Young simply because of a lack of time, or was it for some other reason? Does the council need to act within a certain period of time? If not, does the veto stand?

  2. Jason Furman, a man of extensive credentials and respected by both Dems and Republicans, put out his article early in 2005 in support of Walmart. I’m wondering if he’d have the same opinion today after much more about how Walmart operates and the quality of its products was known then.

    http://www.businessweek.com/bwdaily/dnflash/jul2005/nf20050726_3613_db016.htm

    Wal-Mart’s China Card
    While the revaluation will crimp U.S. store profits, it should boost outlets in China. Expect the retailer to up its bets on the Middle Kingdom (July 2005)

    As the world’s largest retailer enters into an aggressive phase of Chinese expansion, with the goal of almost doubling the number of its stores — to 90 — over the next two years, you can expect more such marketing machismo. China is rapidly becoming an extremely competitive market, where Wal-Mart’s largest rival, France’s Carrefour (CRERF ), already has 240 stores.

    TRICKY DICHOTOMY. Wal-Mart revealed its ambitious expansion plans to Chinese journalists on July 25, just four days after the People’s Bank of China decided to abandon the yuan’s decade-old peg to the dollar. The move will lift the Chinese currency’s value by 2.1% initially — and perhaps by much more over the long term. That should help boost Wal-Mart’s earnings from its operations in China.

    However, the yuan situation is a double-edged sword for Wal-Mart. While China’s decision came after increasingly insistent U.S. criticism of Beijing’s monetary policy and calls from U.S. Treasury Secretary John Snow to free up its currency, it will also “raise the cost of Chinese imports, putting pressure on margins for retail,” says Sam Stovall, Standard & Poor’s chief investment strategist (see BW Online, 7/26/05, “The Yuan and You”).

    In fact, Stovall expects the cost of goods to rise very rapidly in the short term (see BW Online, 7/21/05, “The Yuan: A Baby — But Key — Step”).

    ENDANGERED PRODUCTS. The impact of the downward pressure on profits will hit Wal-Mart front and center. About 70% of the company’s goods are made in China. By CEO Lee Scott’s own admission a couple of months ago at the company’s annual meeting, “Last year it was estimated we imported about $18 billion worth of goods from China.”

    And Matthew Fassler, an analyst at Goldman Sachs, expects retailers of footwear, apparel, sporting goods, and toys, all areas on which Wal-Mart heavily relies, to take the hardest hits.

    Still, retailers that have operations in China will benefit from the higher value of the yuan, mitigating the negative effects in home markets. And Wal-Mart knows a little about overcoming adversity (let’s not forget all those failed no-Wal-Mart-in-my-town campaigns). The company may have opened just 48 stores in China since venturing there in 1996 — vs. 3,700 locations in the U.S. since 1962 — but clearly it is looking to China for growth in coming decades.

    QUALITY OF PRODUCTS
    http://www.snopes.com/medical/toxins/flipflop.asp August 2007
    FLIP FLOP FLAP
    Many products coming out of China are now being recalled due to unsafe materials to make products and the the budget at low cost. Lead is MIXED in the paint for toys and a customer bought a pair of flip flops from Walmart and experienced chemical burns.

    http://www.snopes.com/critters/crusader/dogtreat.asp September 2007
    DOG TREAT WARNING
    The FDA has issued a warning about jerky dog treats.

    What ever happened to Walmart’s big push for “Made in America”?

  3. Thank you Gwendolyn for proving to us why the super center ban is NOT about “mom and pop” businesses but instead about hating on Wal-Mart.

  4. Dear Craig,
    Thanks for showing that you’ve taken an argument for requiring big box super stores over 90,000 square feet (Walmart, Target, etc.) to do a study on how their business might impact a community, and turned it into a love or hate situation or position. That is so simplistic.

    My comment has to do with quality of merchandise sold at this particular big box store. Many folks don’t realize that Walmart’s zeal to give it’s customers cheap prices has a cost in terms of quality.
    Like the saying goes, “You get what you pay for”.

    Do you want a store who imports over 70% of its merchandise from China and can’t seem to guarantee that its merchandise won’t make you sick?

    And this is only one part of the argument.

    BTW: If you shop at Walmart, you might not want to buy the frozen chicken before checking its origin and going to:
    http://www.snopes.com/photos/food/chinachicken.asp

    Bon appetite.

  5. Dear Gwendolyn,

    It must be difficult to be a lone voice of dissension on a site such as this. My take on your opinion is based on your comments here and elsewhere. My take is that you hate Walmart, which is fine – it’s your opinion. But please, please get this – it’s obvious to most people what your opinion is. So don’t try to hide that by accusing me of simplifying the debate or applying ad hominem attacks. I was just pointing out an observation.

    Good day.
    Craig

    P.S. It’s “bon appetit” (no “e” at the end)

    P.S.S. I don’t shop at Super Walmart for groceries but I would if there was one near me. Save 20-25%? You betcha!

  6. Craig, after seeing “Gwen” comment here for some time, we’ve come to the conclusion that she actually believes she is smarter than anyone else. BTW, the snopes.com entry on the frozen chicken thing lists the story as “Undetermined” as far as verification as to its truth, and — further — the email story that has been going around says NOTHING about WalMart. The implication in the China frozen chicken story is actually that anyone who buys frozen chicken ANYWHERE may be on the eating end of this particular China poultry. What that has to do with WalMart is beyond those of us that are clearly smarter than the purveyor of such pap.

  7. Thank you Mr./Ms. Thor’s Assistant. I gathered as much from her posts elsewhere. I will endeavor to direct my responses/comments to those more worthwhile of a response/comment.

    Love the blog!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.