Wednesday, June 15, 2005

Welcome to the Dawn of the Chinese Century

A Big Hearty Thanks to WalMart!

Personally I am not a WalMart shopper. I prefer the clean, neat and organized environs of Target or Sears. This is not to say that WalMart shoppers are anything less than I, but face it, the stores are cluttered, disorganized and dingy. As for low prices, well that's just great, but low prices as an end all is very misleading. For every ebb there is a flow and for every cause there is an effect. Low prices here means low wages somewhere else...

WalMart is the epitomy of the term "Creative Destruction" which is often used to portray the effects of American capitalism. While the term may have some negative connotations it really is an apt description, something new is born and something old dies. WalMart has brought it to a new level, a level I will call creative annilhilation.

A decade ago I used to dismiss the handwringing by the small town folks when a new WalMart came to town. The truth was that most of these small towns were already in decline before WalMart came. The big box retailer was simply the final nail in the coffin of Mom and Pop shops all over the heartland. I used to say, well, WalMart has something the people want otherwise they wouldn't be packed with shoppers looking for those famous low prices.

Times have changed since then and I no longer feel that WalMart is merely filling a need. I must say I was sickend by the PBS program Frontline: (which is one of PBS's finest offerings) called "Is WalMart Good for America?" . I must conclude that the answer is now no.

During the early 90's WalMart's "buy American" strategy was failing, it's stock price was falling and prospects for continued growth at the rate they had established was looking grim. In the decade that followed they adopted a "buy Chinese" strategy and with the help of a landmark trade deal with China, negotiated by none other than the Clinton Administration, they became the largest company in the world. Did I mention that both Bill (Clinton) and Sam (Walton) were from Arkansas?

Who can fault them for taking advantage of the circumstances? Truthfully, they would be foolish not to. However, again, WalMart has taken it to a new and despicable level. In this global economy national loyalty is a joke when the bottom line is all that matters. The effects of this new business paradigm is devastating America in countless ways, and until consumers realize that these famous "low prices" are very reason their small towns and their good jobs are drying up they will watch hopelessly the last gasp of the American century.

To watch a clip of President Clinton touting the new China trade agreement as a boon to American made product and a victory for free trade through the lens of 20/20 hindsight only made the reality that much more stark. At one California port the imports from China alone were worth 36 billion while exports to China were just over 3 billion. More telling than even the incredible trade imbalance was what those import/exports actually were. From China we receive - well, you name it - everything under the sun. To China we send raw materials such as metals, chemicals and plastics. We are to China what third world countries were to us 50 years ago. I'll let you guess who the lion's share of those imports went to. Yeah, you guessed it, WalMart. Some trade deal Clinton worked up for us, huh.

Still, what can you say about WalMart? They are an American company employing many thousands of Americans. Their products need to be shipped from one place to another which employs yet thousands more in the transportation industry. Then, of course, there are those low prices. WalMart is saving John and Jane consumer a bundle. Isn't this all good? Well, what about Rubbermaid and Thompson and any number of American factories that have shut their doors in the last five years. When asked what happened they will all point to one culprit, WalMart.

For me the last straw was the incredible story of the last manufacturer of TV's in America. Forced to make only high end big screen TV's by prevailing market conditions they were suddenly faced with a Chinese manufacturer who was dumping big screen TV's on the US market. They filed a suit based on provisions in the trade agreement and watched as Chinese companies lined up against them. But the Chinese companies had a good friend on their side, WalMart. Ultimately the American company won the suit and is thankfully still in business, for now. What if WalMart had its way?

I am not an activist and I won't be leading any charge against WalMart, but I am fairly certain I won't be spending one thin dime in their stores.