Business People Are Terrible At Governing

[_Brackite]

"Yes, Walmart has a reputation for being evil, for good reason. To say they are pro-competition is silly. But like many companies like them, folks on the Right think they are upright examples of divine capitalism at work. They based this on one metric alone: their success."

Wal-Mart heir funding Obama big time:

[_cinepro]

In all fairness to Kevin, while showering employees with money -- I'll be sending you my resume, fyi -- may not be "illegal" depending on how extreme the showering is, a distinction needs to be made between one's own business on the one extreme, and a publically traded one on the other. If I have my own private company, then beyond raising red flags for fraud with the IRS, I can pay my secretaries a million a year. However, if I'm a boss in a public company, that would be a huge conflict of interest with investors and depending on circumstances, may actually be illegal. It would certainly be unethical.

For what you're describing, how are governments and non-profits any different? Are they allowed to waste huge sums of money without consequence? If so, why is that better?

There's also an important distinction to be made between large public companies and the government. Namely, large public companies are spending their shareholder's money, and it's money that the shareholders willingly invested on the expectation (or hope?) that the value of the stock would increase. The government is spending money that it borrowed, printed or forcibly took from its citizens. Ideally, the government would be under just as much pressure to return value to its "shareholders" (i.e. the taxed citizens) as a business manager is to their shareholders. If the government managers aren't, that isn't necessarily a positive thing.

I honestly can't figure out what the point of the OP is. If Kevin or anyone else has a problem with how some companies are run, then don't support those companies. Don't buy their stock. Find companies who are run the way you think a business should be run and support them and buy their stock. If you're the kind of shareholder that doesn't care about making a return on your investment but instead are just interested in supporting the company, they will be happy to have your support.

As for Wal-mart being "evil", that's silly. Wal-mart exists solely by the will of its customers. You could make Wal-mart disappear tomorrow if people simply stopped shopping there. That's a pretty weak form of "evil" if it can so easily be undone. Wal-mart is so successful because it gives customers exactly what they want at great prices. If Wal-mart wasn't there, people either wouldn't be able to buy certain things, or they would pay more, or they would have to spend more time shopping at different stores. All three of those things sound like un-evil benefits to me.

In my area, Wal-mart has started opening grocery stores to compete against the local grocery chains, and on average their prices are 10% lower than the chains. This means that someone who shops at Wal-mart for groceries is getting the equivalent of 5 weeks of free groceries each year! How is that "evil"? This is a benefit that is freely available to everyone, and just as easily declined. If I don't like Wal-mart and their stupid low prices, I can choose to go to Safeway, or Whole Foods, or any other local market and pay higher prices to support their union employees or organic culture.

As Montgomery Ward, K-Mart and Sears (and countless other once-dominant retail chains have found out), no matter how big you are, "competition" is very real. Wal-mart will find that out too one day. And it will happen because of competition and the free market.

[_Kevin Graham]

Cinepro you have a very simplistic, naïve understanding of how Walmart actually works. Walmart puts smaller companies out of business by lowering prices to ridiculous levels just to put them out of business. It is all about monopoly. They have the money to put small Mom and Pop shops out of business because they can afford to take a hit on profits for longer periods of time. Mom and Pop shops can't. Then once they become the only retailer in the area, they jack up prices again.

They also have a habit of strong arming local governments, getting subsidies for their store constructions (unfair competition right there since no one is going to subsidize Granny's Grocery Store thinking it will pay off in sales tax revenues) only to close shop a few years later and move a mile down the street across district lines, so the government that provided their facility no longer receives the sales tax revenue that was the only incentive for subsidizing them in the first place. And then the local government is left with this ginormous, abandoned facility that can be used for pretty much nothing except some lame Furniture outlet store. There are two in our county alone. So it usually becomes an eye sore, detracting business away from other business owners who initially set up shop next to Walmart thinking that would put them at the center of local commerce.

But this is just scratching the surface. Here is a detailed documentary explaining why Walmart is evil:

http://www.youtube.com/watch?v=Jazb24Q2s94

Here is a Frontline special discuss Walmart: http://www.youtube.com/watch?v=M7HlZtne ... re=related

At the 22:00 mark of the video, notice the psychological tactics Walmart uses to make people think their products are sold at the lowest prices. In reality they aren't the lowest.

[_EAllusion]

Wal*Mart is very good at using the government to gain an advantage over its competitors. This comes in the form of property tax breaks, free land, local governments going out of their way to provide quality roads, sewer, and other civil infrastructure to the store, and - I kid you not - outright grants in some cases. This aid has totaled over a billion dollars in the past few years. That's money forcibly taken from you, not something you volunteered through shopping.

These are advantages that aren't necessarily available to mom and pops. Wal*Mart isn't successful simply because it operates in the free market to provide the best ratio of quality to price.

[_EAllusion]

Incidentally, Governments do that because they are trying to create anchors for commercial development and attracting a big box store is the easiest way to do that. This ain't free market economics at work.

[_cinepro]

Wal*Mart is very good at using the government to gain an advantage over its competitors. This comes in the form of property tax breaks, free land, local governments going out of their way to provide quality roads, sewer, and other civil infrastructure to the store, and - I kid you not - outright grants in some cases. This aid has totaled over a billion dollars.

These are advantages that aren't necessarily available to mom and pops. Wal*Mart isn't successful simply because it operates in the free market to provide the best ratio of quality to price.

Honestly, that sounds like a problem with the government, not Walmart.

Are car companies "evil" because they shop around their factories to different states, looking for the best incentives? Is Intel "evil" because it gets special breaks from Oregon and Arizona for its factories there that aren't available to smaller companies (including millions of dollars in roads and infrastructure provided by the government)? Is Apple evil because it locates certain functions in other states just to avoid California taxes? Are sports teams "evil" because they get money from communities to build stadiums that almost never deliver the economic benefits they claim?

Heck, Target does the same thing. So Walmart getting similar breaks and tax support is just another sign of competition working. It's competition among companies, and it's competition among cities, states and countries. I guess there are those who would just consider all large corporations "evil", but then we're back to the question of who is really "simplistic and naïve".

For the record, I don't usually support such government breaks for big companies, and I'll vote against them if given the chance (but we're usually not given the chance). Cities have said "no" to Walmart, so it can be done. But I would feel kind of silly for criticizing a company, any company, for doing everything they legally can to not give money to the government, or to be forced to spend money where they didn't have to.

[_EAllusion]

Honestly, that sounds like a problem with the government, not Walmart.

It's not like Wal*Mart is innocently strolling along when the government hands them free stuff. They vociferously lobby for these advantages. Yes, the problem fundamentally is that governments give in to these pressures, but you seem to be pivoting away from your initial point that Wal*Mart is only successful because of people's free choices to shop there. It's more complicated than that.

[_cinepro]

Honestly, that sounds like a problem with the government, not Walmart.

It's not like Wal*Mart is innocently strolling along when the government hands them free stuff. They vociferously lobby for these advantages. Yes, the problem fundamentally is that governments give in to these pressures, but you seem to be pivoting away from your initial point that Wal*Mart is only successful because of people's free choices to shop there. It's more complicated than that.

Ultimately, it isn't more complicated than that. There may be many, many other factors that influence what stores like Walmart can and can't do, and how it effects their ability to conduct business, but ultimately it all comes down to people buying the products they sell.

Just as individual tax-payers justifiably seek every honest deduction and tax benefit available to them, companies should be expected to do the same. If Walmart doesn't seek them, other companies will, and then years from now you'll be complaining about how Target is "evil" and no one will care about Walmart because they will have become irrelevant, like K-Mart or Sears.

But I also support peoples' efforts to educate consumers about the choices they are making when they shop at Walmart or Target or other stores. It's entirely legitimate to let the public know that Walmart charges less for their groceries compared to Safeway or Albertson's because Walmart doesn't pay their employees as much or provide similar benefits. The more information that is available, the better. But don't be upset or surprised if people still decide the benefits of the selection and prices at Walmart outweigh the other costs involving trade imbalances with China or the possibility that smaller stores with less selection and higher prices might go out of business.

The government also plays a role in making "consumer protection" laws and overseeing the competition between retailers. While we can also debate the effectiveness and usefulness of these laws, either way they do provide for quite a bit of restriction on how stores can set prices, advertise, and otherwise convince people to shop in their stores.

[_cinepro]

Incidentally, Governments do that because they are trying to create anchors for commercial development and attracting a big box store is the easiest way to do that. This ain't free market economics at work.

That's actually an interesting situation, because my initial thought would be that private investors and real estate developers should be the ones taking the risk (and benefiting from the positive outcome). But there are many towns that are declining and can't get such investment, so the local government takes the role of "developer". I've seen it in Los Angeles where there was an almost abandoned mall in a poor part of town, and they got Walmart to come in to the space previously occupied by Sears (it's a bi-level store with escalators for you shopping carts). The mall has since rebounded with many new tenants.

It looks like this Walmart will be expanding to a nearby grocery location, and no one is complaining:

http://articles.latimes.com/2012/apr/30 ... y-20120430

So it's a tough call on whether or not this is an appropriate role for local governments.

[_EAllusion]

Ultimately, it isn't more complicated than that.

I missed the part in your explanation of how Wal*Mart's success is all a matter of consumer choice where you explained that by "consumer choice" you mean that men with guns take your money and hand it over to Wal*Mart.