all set with chinese chit

[GregW]

Originally Posted by detbuch

Actually, the consumer is not responsible for net jobs lost by buying from Walmart. The money the consumer saves by buying at Walmart will be spent elsewhere in the economy, creating or saving other jobs.

No, actually that is completely wrong. The economy is run by many factors , not just one purchase.

First example, consumer spending is often driven by confidence. Confidence is closely related to the unemployment rate. Walmart is the worse offenders off forcing companies to go offshore to produce products at the price that walmart demands. When there are massive job losses it causes a problem in two ways. Those that are laid off don't have money to spend and those that do have jobs don;t have the same confidence, therefore not spending as much money as before.

Second reason: Walmart does not pay a viable wage. When supermarkets have unions (and I am not arguing for or against them) they can not compete price wise and may be forced out. Those employees went from making a livable wage to being forced into a low wage by the only place in town.

Do you work for walmart?

[detbuch]

Originally Posted by GregW

No, actually that is completely wrong. The economy is run by many factors , not just one purchase.

I was speaking to the factor you brought up--the consumer pushing jobs offshore by spending at places like walmart. In respect to that factor, the money saved by spending there is money that can be spent elsewhere. Is that completely wrong?

First example, consumer spending is often driven by confidence.

I don't know about other consumers, but the only confidence I look to in spending is the confidence that I can afford to spend. Is your spending restricted by "consumer confidence" or by your own ability and desire? I have yet to talk to anyone who has confided that they weren't going to buy something because of some poll manufactured "consumer confidence" being down.

Confidence is closely related to the unemployment rate. Walmart is the worse offenders off forcing companies to go offshore to produce products at the price that walmart demands. When there are massive job losses it causes a problem in two ways. Those that are laid off don't have money to spend and those that do have jobs don;t have the same confidence, therefore not spending as much money as before.

Walmart has been around for many years during which time the unemployment rate has varied from low to high. So during the times that the rate was low, was Walmart responsible for the low unemployment? It seems you're implying that Walmart is part of the reason for high unemployment. If that's the case, the rate should have been and stayed high for a long while rather than fluctuating. And how does Walmart "force" companies to go offshore? Are you speaking of products that are produced solely for sale at Walmart? Is there some kind of contract between Walmart and these manufacturers wherein their products can only be sold through Walmart? If so, then Walmart is "forcing" the creation of a company that otherwise would not exist. As I mentioned to Spence above, much of what is for sale in Walmart are normal brand products that can be purchased at other stores for a higher price. If they are forced by Walmart to manufacture at a lower price, why are their products more expensive elsewhere, and is it not good for the consumer that Walmart sells them cheaper? And doesn't this lower price help those that are laid off rather than hurt them? And there are other stores, there really are, that those who choose not to spend at Walmart, can spend--with confidence. I have not seen a real correlation between Walmart, unemployment, and so-called "consumer confidence."

Second reason: Walmart does not pay a viable wage. When supermarkets have unions (and I am not arguing for or against them) they can not compete price wise and may be forced out. Those employees went from making a livable wage to being forced into a low wage by the only place in town.

So how do Walmart employees avoid starvation and homelessness? I have been going to Bowling Green, Ohio for several years to visit my son. When I first started going there, there were two large grocery stores (Kroger and a Value-something-or-other) and a K-mart. A Meier store moved in about ten years ago, then a Walmart followed. At first the Meier was the price competitor, which drove the Value-something-or-other out of business. Then Walmart created even more price competition. The Kroger is doing well and has lowered prices and maintained or improved quality and service, as well as has Meier, and a new really low-priced grocery store named Aldi has moved in. The town now has four grocery stores with varying competitive prices and quality including the super Walmart and Meier. The Kmart was in trouble and went out of business before Walmart moved in. The consumers have benefitted. There are more jobs.

Do you work for walmart?

No

[GregW]

Is my spending influenced by confidence? Yes 100%. For example if I feared losing my job my spending would instantly be cut back. That is just common sense.
And ultimately even a rumor of layoffs can instantly cripple an economy.
Here is an example for you. You are a manufacturing company that employs production workers. Wal-Mart, one of the larger purchasers, says that they will now only pay $7 for a product you were recently charging $10 for. A foreign company will make it for that price. To answer your question: why were they charging "so much more?" , is because the company pays American citizens , American wages and also pays research and development , while foreign companies will copy the product changing one minor thing and then selling it to American markets.
So, you as an executive have two choices. To lay off workers and stop selling to Wal-Mart or to ship all or part of the production off shore to be able to meet Wal-Mart’s price demand. Following so far?
Now that there are rumors of layoffs, common sense would tell you that those factory workers will instantly cut back spending. This seems minor at first until you consider all the others affected by it. The local restaurants see a decrease in business, so those employees spend less. The tr#^&#^&#^&#^&#^&g company that moves the products hears of this and instantly their employees are worried and spending less. This follows suit with all other industries from real estateto the guy filling the vending machine.
Now, do you understand how this can quickly affect a lot of industries?
Now imagine it in a lot more towns.

Now, the other issues. Is the money saved by purchasing cheaper goods at Wal-Mart, and then pushed back into the economy? Not necessarily. And even if it is the value of the dollar is greatly effected due to the problem with the economy.

Is Wal-Mart the only offender? No, of course not. I used it as an example.
If you think Wal-Mart has nothing to do with unemployment, then tell me how many manufacturing jobs it supports, and how many jobs it has sent overseas?

[detbuch]

Originally Posted by GregW

Is my spending influenced by confidence? Yes 100%. For example if I feared losing my job my spending would instantly be cut back. That is just common sense.

I agree. Confidence would be a personal issue, not something manufactured by a poll. If you didn't fear losing your job, would you cut back spending because of a drop in the so-called consumer confidence index?

And ultimately even a rumor of layoffs can instantly cripple an economy.

Actual layoffs will immediately dampen the flow of money toward those that sell. But that happens all the time and economies adjust. Rumors can scare those who fear being laid off, but not so much others. Downshift in the economy is not, in the short run, good, but can lead to stronger economies (creative destruction). But Walmart (and similar Companies) have been there in good and bad times. Do they get credit for the good times , or only blame for the bad.

Here is an example for you. You are a manufacturing company that employs production workers. Wal-Mart, one of the larger purchasers, says that they will now only pay $7 for a product you were recently charging $10 for. A foreign company will make it for that price. To answer your question: why were they charging "so much more?" , is because the company pays American citizens , American wages and also pays research and development , while foreign companies will copy the product changing one minor thing and then selling it to American markets.

If the company is "forced" by foreign competition to manufacture at a lower price in order to accept Walmart's offer, then they can sell at Walmart price to Walmart's competitors. Then Walmart's competitors can sell for competitive prices to maintain sales and not lose customers to Walmart. Then you will have prices drop on a large scale which would boost "consumer confidence," increase spending, create a booming economy, lower unemployment, and, coincedentally, strengthen the dollar since a smaller number of dollars would be required to buy goods. With a stronger dollar, wages would actually be boosted, not suppressed, even though the actual dollar amount would have been lowered, thus raise the standard of living.

Now, the other issues. Is the money saved by purchasing cheaper goods at Wal-Mart, and then pushed back into the economy? Not necessarily. And even if it is the value of the dollar is greatly effected due to the problem with the economy.

Yes, necessarily, the money will be spent back into the economy, unless it was stuffed under a mattress, which very few people do. And money that is so stuffed would be removed from the economy, thus making the dollars still circulating more valuable since the number of dollars would be reduced by the amount stuffed. The problelm with the economy is not Walmart or companies like it, but government manipulation of the money, either in taxes, borrowing, or excess printing.

If you think Wal-Mart has nothing to do with unemployment, then tell me how many manufacturing jobs it supports, and how many jobs it has sent overseas?

Walmart has to do with its own employment. And it employs a great number. That is the only thing it controls or should be expected to control. If its competitive methods are successful, others can do likewise. What is "apparent" here is the proverbial short-term vision. We tend to see short term, immediate effects and not the long term consequences. In the long term, Walmart type competition will bring all prices in this country down--including, by "force" of this, manufacturing, if manufacturing wishes to exist here. The short term lowering of wages will, in the long term, be a maintainance or a raise in wages because the value of the dollar will increase due to the lower prices, and, therefore, lower wages will buy as much or more than now. And the American worker, because of lower wages and production costs, will, in the long term, be able to compete with foreign workers. That is the only way that competition can happen. Protectionism will not work. Government intervention will only exascerbate our economic problem.