Business People Are Terrible At Governing

[_cinepro]

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.

But they're handing the money to Target and Intel and Honda and Sports Teams as well. Walmart would be at a disadvantage if they didn't take do those things that are available from local governments to cut down their costs.

I don't necessarily agree with those accommodations made by governments for companies, but I believe the solution would be more to give those benefits to all companies, regardless of size, than to pick and choose. And I certainly won't single out one company as being "bad" or somehow unethical for working in a system created by governments and politicians to lower their costs.

In other words, it's a political problem, not a business one.

If what they're doing is legal, then quit complaining. If you don't like it, then get politicians to stop doing it. Get the law changed. Elect politicians who won't do it. Or just start shopping at stores that don't take advantage of tax breaks or other government variances that allow them to pay less than whatever pre-determined level of taxation you feel is fair. Don't buy products from companies like Intel, Apple, Honda, Toyota, GM or any other major car manufacturer that has taken advantage of government accommodations in building their factories.

If enough people can do this, they'll get the message. If enough people don't, then who cares?

[_EAllusion]

But they're handing the money to Target and Intel and Honda and Sports Teams as well.

Yes, and? It still puts them at an advantage over competitors (especially mom and pops) and belies your false assertion that Wal*Mart is only successful because of consumer choice.

I don't necessarily agree with those accommodations made by governments for companies, but I believe the solution would be more to give those benefits to all companies, regardless of size, than to pick and choose.

That's literally not possible, but if it was, then everything would be a wash economically and there'd be no point in doing it.

If what they're doing is legal, then quit complaining.

If a business colludes a government to do anything that the government has made legal, then it is by definition something we shouldn't complain about? You seriously think this?

[_cinepro]

Yes, and? It still puts them at an advantage over competitors (especially mom and pops) and belies your false assertion that Wal*Mart is only successful because of consumer choice.

If Walmart didn't get the usual government breaks but still had customers, they'd do okay (but a little less okay). If they got all the government breaks but customers decided they liked Target or K-Mart or Amazon more and stopped shopping at Walmart, they'd be screwed. Unless the government bailed them out.

That's literally not possible, but if it was, then everything would be a wash economically and there'd be no point in doing it.

The point would be to lessen the tax burdens on all businesses, not just the big ones. Again, I'm against governments taking such actions to the benefit of individual companies. I just don't blame the companies themselves; I blame the governments.

If a business colludes a government to do anything that the government has made legal, then it is by definition something we shouldn't complain about? You seriously think this?

No. I just blame the government. For example, I don't get mad at Solyndra or GM for taking (and losing) millions and billions of dollars of government money.

But I'm also against governments working against companies:

http://www.nytimes.com/2012/09/08/us/a- ... .html?_r=0

I say let them play by the same tax and zoning rules everyone else does, open the store, and if people don't want a Walmart there, let them continue shopping elsewhere. Having a minority of citizens block the store for their own self interest is just as bad. But I don't blame them for trying, I blame the city government for giving into them.

[_EAllusion]

If Walmart didn't get the usual government breaks but still had customers, they'd do okay (but a little less okay).

Wal*Mart's successful status is in part a consequence of government assistance. It is simply untrue that its success is simply a matter of consumer choices.

The point would be to lessen the tax burdens on all businesses, not just the big ones.

Imagine a world in which every single person who wants to run a business is given free land, roads, sewer, traffic lights, landscaping to their location of choice, no property taxes, and a large grant that pays for the start-up costs of operations.

Do you want that world? Do you think it is a good idea? Do you think it is even possible?

No. I just blame the government.

So the companies that helped run Nazi death camps had culpability for anything they did or lobbied for, because it was legal?

[_cinepro]

Wal*Mart's successful status is in part a consequence of government assistance. It is simply untrue that its success is simply a matter of consumer choices.

I disagree. The government breaks/assistance/subsidies/welfare (whatever you want to call it) only add to Walmart's bottom line. But ultimately their success is a result of consumers really liking to shop there. K-Mart, Sears, and Target could get the exact same deals as Walmart and they wouldn't be as successful. In the end it's the customers.

Although I would be interested to know if cities see a net fiscal benefit (even after they give incentives) from having a Walmart located there. I hope someone at the local level is doing the math!

Imagine a world in which every single person who wants to run a business is given free land, roads, sewer, traffic lights, landscaping to their location of choice, no property taxes, and a large grant that pays for the start-up costs of operations.

Like I said, I hope the math works out to the benefit of the city. If it doesn't, then they shouldn't be making these deals.

Do you want that world? Do you think it is a good idea? Do you think it is even possible?

If it's a good deal for the city, and it's what the citizens want, then yes, I would want to live in that world. Although I'm not sure why you say "every single person" would get all the benefits offered to a large corporation. I strongly suspect there is a cost/benefit side to the question that most startups don't meet.

But if a city wanted to do that, more power to them.

So the companies that helped run Nazi death camps had culpability for anything they did or lobbied for, because it was legal?

Yes, absolutely. Local cities and counties offering breaks to bring in large businesses is the same as Nazi death camps, and since I don't have a problem with the former, I will stay morally consistent and admit I don't have a problem with the latter.

But now that we're in the realm of ethics, let me ask you a question. When I relocated my business five years ago, I moved from the City of Los Angeles to the City of Burbank, and part of that was because of the lower business license fees (and other city fees for services) in Burbank. Was I wrong to take that into account?

[_cinepro]

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.

I forgot about this odd claim.

Can anyone cite a place where Walmart has a "monopoly" on something? Toys? Groceries? Sporting Goods? Clothing? Gardening and Hardware? Pets? Bicycles?

I strongly suspect Walmart doesn't care at all about "mom and pop" retailers, much less actually do anything to "put them out of business". Walmart isn't competing with small businesses. They are competing with other big businesses such as Target, Home Depot, and Toys R Us.

My part of Southern California has three Walmarts. Each one is located near at least one major grocery store, toy store, office supply store, Target or KMart, Best Buy, Petco, or a Home Depot or Lowes. There is tons of competition!

You can bemoan the failure of many local small businesses, but don't lay that at the feet of Walmart. It's the large national chains working together that did it.


And the biggest competition of all is the internet. If Walmart is bad, then Amazon and Ebay are truly the spawn of Satan for all the damage they have done to small and big retailers! Yet when was the last time you saw an anti-Amazon backlash, or people marching in the streets to protest Amazon expanding into a new market category? At least Walmart pays into local sales tax coffers. Amazon only just started collecting state sales tax for CA, and the local cities won't be seeing a penny of that money.

[_EAllusion]

I disagree. The government breaks/assistance/subsidies/welfare (whatever you want to call it) only add to Walmart's bottom line. But ultimately their success is a result of consumers really liking to shop there.

The competitive advantage Wal*Mart is able to lobby the government for impacts whether consumers will like shopping there. Do you not see how the two are connected? Let me give two examples:

1) Grants allow Wal*Mart to offer goods at cheaper prices. Cheaper prices impact where people choose to shop.

2) Location and ease of access, such as where roads lead, impact where people choose to shop.

I hope someone at the local level is doing the math!

Sometimes local areas benefit, sometimes they do not. It depends on what numbers you look at. Wal*Mart tends to depress the volume of local trade because of the downstream effects of putting local businesses out of business, but it is a leading indicator of population growth. It's a complex story. Some areas are devastated by Wal*Mart's entrance into the economy, others are helped.

I, for one, don't think the government should be in the business of guiding consumer choices in this way or "picking winners and losers" in modern political parlance. It's economically inefficient, unfair, and funded with confiscated property. I'm a bit shocked you are Ok with this.

If it's a good deal for the city, and it's what the citizens want, then yes, I would want to live in that world.

What a profoundly unconservative sentiment.

Local cities and counties offering breaks to bring in large businesses is the same as Nazi death camps,

You stated, flat out, that if something is legal for a business to do, then they are not culpable if they do it. The problem is solely with the government, not them. This does apply to more scenarios than simply lobbying the government to use its monopoly on force to give them competitive advantages.

Was I wrong to take that into account?

No.

[_cinepro]

The competitive advantage Wal*Mart is able to lobby the government for impacts whether consumers will like shopping there. Do you not see how the two are connected? Let me give two examples:

1) Grants allow Wal*Mart to offer goods at cheaper prices. Cheaper prices impact where people choose to shop.

2) Location and ease of access, such as where roads lead, impact where people choose to shop.

So here's the next question. Suppose I grant you that Walmart is "evil", treats their employees terribly, gets unfair advantages from local governments, uses shopper psychology to get people to buy stuff, drives small businesses out of business unfairly, ruins local economies, adds to the trade imbalance between the US and China etc....

What is the solution to the problem?

[_Analytics]

I strongly suspect Walmart doesn't care at all about "mom and pop" retailers, much less actually do anything to "put them out of business". Walmart isn't competing with small businesses. They are competing with other big businesses such as Target, Home Depot, and Toys R Us....

It depends upon the market. The original Wal-Mart model business model was to go to small towns that didn't have Targets etc., compete directly against the mom-and-pop shops, and put them out of business. Now they also compete in cities, but originally that was quite rare.

[_cinepro]

It depends upon the market. The original Wal-Mart model business model was to go to small towns that didn't have Targets etc., compete directly against the mom-and-pop shops, and put them out of business. Now they also compete in cities, but originally that was quite rare.

Okay, so if I concede that that is a "bad" thing, what is the solution?