Sunday, March 2, 2008

Evil, Greedy Big Business

First of all, the title of this blog is bullshit. Large corporations are not evil as a group, and greed is an incorrectly used word when applied to an entity whose very purpose is to accumulate money. I really should have called this blog In Defense of Business, but I picked the current title just to tweak any liberals out there who despise business. I'll be talking about some specific aspects (with an obvious break for the Democrat primary here in Ohio) over the next week, but allow me to explain some basics just to frame the debate. So if what I state is obvious, it's because not everyone understands the obvious.

First of all, the free market, and all the great things we have in this country, have been brought to us by various companies. These companies have been motivated, by our insatiable demand for more stuff at lower prices, to produce what we need and want. Therefore, with very few exceptions, most companies will benefit if we benefit as a whole. And those companies that produce want we want and behave in the way we want will be rewarded. Those who don't will eventually fail.

So I am usually annoyed, and occasionally surprised, and more often pissed, when I hear people go off on Big Business as these evil entities that steal our money and evade taxes and destroy the environment and kill our children and rape the land and whatever other catchphrase is popular. I freely admit that there are scum, and liars, and criminals in Big Business. These people are everywhere. The only difference is that these scum wield more power per capita as a corporate head than they do as a circus clown. Of course, those vermin are worse when they get to Washington, but that's another blog. My point is that it's people that are evil, not corporations. So if a company supplied the Nazis, they did it 60-70 years ago. If an ancestor of mine led Klan lynching parties in the South at the turn of the century (I don't have one of these as far as I know), it sure as hell is not my fault and it doesn't make me a racist. So unless a company is guilty of something today, you're wasting my time digging up history.

Let me address the Wal-Mart haters specifically: Wal-Mart is responsible for creating an assload of jobs, bringing more product to more people at better prices than anyone else, and redefining how retail business is done today. While there have been isolated problems at some stores, occasional attempts to please the most people and pissed off one group in the process, and some reason for at least half of America to be pissed at them (for me it's censored music), I feel a need to defend them. They have forced creaky businesses to either become specialized and efficient or close. They have created a culture that enables many people who would otherwise be unfit for retail to work retail. They have given back to communities they have moved into and generally improved lives there. Nonetheless, as a successful business, they have been savaged more than any other in retail.

It's the twisted notion that businesses succeed by screwing people. It reveals a fundamental misunderstanding of how businesses work, and why businesses work. I will explain more specific aspects of this in future blogs.


Toad734 said...

Walmart has been successful at eliminating a lot more jobs. ANd the jobs they do create are mainly 30 hours per week with no health care coverage.They then train their par time employees on how to get on government subsidies and also hire illegal aliens. Not only that, they threaten local governments by forcing them to allow Walmarts to build in their community and when they don't let them they build right outside of their community, put everyone in that community out of work and that community can no longer recoup those taxes and then they force TV factories, shoe factories and almost any type of electronic business in the US out of business so they can give all that business to the communists in China who are building missiles to kill us. If that isn't evil, I don't know what is.

Don't act like we need Walmart. In the last 10 years I have been to walmart once. Walmart hurts consumers it doens't help them. Why would you sell a $40 DVD player to a family below the poverty line? If they only have $40 to spend on a DVD player, they don't need a DVD player, they need a meal.Walmart also sells these $40 DVD players which they advertise in the paper, that gets these idiots in there and then they sell them paper towels or what ever it is at prices twice as high as they could have bought them for at the grocery store, dollar general or what ever. Thats one of the ways they make their money. THey make you believe that everything in the store is dirt cheap when it isn't.

Patrick M said...

Toad, did you ever stop to think why I chose Wal-Mart as my example here? Didn't think so.

I chose Wal-Mart because they are, despite your usual litany of evils perpetuated by Big Corporations, a success story. And while they do charge more for some things (they do need to make money), they succeed because they provide decently paying jobs, low enough prices, and a selection you simply can't get many other places. And those other places are not nearly as successful as Wal-Mart

Here's the secret. If "buying American" meant shit, our electronics would still cost more. This is simple economics. The vast majority of people have chosen Wal-Mart as a place to shop. They, in turn, get and sell the merchandise people want.

It's called the free market, or voting with dollars. And it's how we decide what businesses are good and what businesses deserve to die.

By the way, you really don't know what evil is.

Toad734 said...

If its better I will pay more. I would never buy a set of stereo speaker made overseas because guess what, they all suck. I am willing to pay twice as much for speakers made in North America if it means the person making them can live off that wage and they produce a better product. Look, if Zenith or Whirlpool employee is able to keep his job here in the US and make $15 per hour with full benefits, he can afford to pay more for his TVs, Refrigerator etc than if he were making $8 an hour at Walmart working 30 hours per week with no benefits. As soon as Walmart drives those companies out of business and that guy no longer makes a liveable wage and has to get a job at walmart and now foodstamps which will raise your taxes, I think thats a pretty high cost for low prices. Wouldn't you agree? Not to mention that your city had to basically give Walmart their land for free and had to pay for all the utility connections, roads, traffic lights etc which Walmart forced them to do. THat money could have gone towards your childrens education but instead in went into the pockets of 4 or 5 of the richest people in America who never worked for their money and are only rich because of what their father accomplished, back when they did buy American made products.

Patrick M said...

For some reason, you think that businesses have all these responsibilities for their employees, as though health care and a "living wage" and every other benefit an employee wants is something an employer has to provide.

Boring Economics Lesson

Market economies work on the concept of supply and demand. If someone wants something that is in short supply, they pay for it. And it is the same for labor. If there's high unemployment, then wages go down. In a good job market, wages go up. The problem is that government mandates, such as the minimum wage and FMLA, and the union destruction of market economics have short circuited the market process. Add to that the insane tax structure and it's no wonder that wages are as out of whack as they are.

Simply put, we are in the situation we are now because of continued government intervention in economics, not the Evil, Greedy Big Businesses.

Toad734 said...

Disagree, no regulation led to the S&L scandal of the 80s and leads to Monopolies where the corporation then that leads to the destruction of market economics because its essentially corporate communism where you have no choice of products or prices. The federal government spares us from that by (sort of) preventing monopolies.

The same is with Walmart where they created the economic condition of people not having good paying jobs by putting all the American manufacturers out of business. If every company in the country all decided to put every one on part time and gave no sick or vacation time, you would be sitting here saying thats what the market is able to bare but that isn't the case, that market is forced on us and we would be about as free as slaves were to say otherwise until, we once again unionized and told them to suck it.

So you are saying that Walmart demanding that a city tear down an occupied strip mall, build them a new store, give them tax incentives lower than any other business in the community and then making that community divert funding for schools and other services to build and support that Walmart is the free market?? I don't know much about economics but that isn't the "free market".

Patrick M said...

Wow. I actually had to read up on the savings and loan scandal to answer you. What I found was a story of regulation, deregulation, and reregulation. How that ties into monopolies (where a little government intervention is actually good) is a little unclear.

As for unions, if the conditions return where unions are needed, they will return. Businesses are motivated now to keep unions out, primarily by taking care of employees. But if you want a business practice to go after, look at the temporary labor market. If I get motivated, I might just do a post on it.

The basic jist is this: companies have a certain percentage of employees, and a certain number of workers from employment agencies. They train, test, and weed out the numbers, hiring a fraction as full-time employees. This saves them time in hiring, HR, and benefits.

If you want to investigate that one and come up with a post, I'm sure you might get some more agreement from me, as I worked like that for a year.

But back to Wal-Mart. They force no one. If no one wanted Wal-Mart, they would fail and go out of business. It's that simple. They're in business because they deliver what people want. And cities want them there because they bring in money.

That's how it's supposed to work.

Toad734 said...

Cities fear them that they will shut down all the local businesses and take all the tax revenues with them. Chicago most certainly didn't want Wal-Mart and we almost kept them out for good but this is Chicago and someone got paid under the table and now there is a single Walmart in the city but I don't think we got boned as hard as Denver or other cities did because people in Chicago would not travel out of the city to shop at a Walmart.

And yes, the lesson of the S&L scandal is that regulations were in place for a reason. Sure without those regulations people can get rich off the pyramid schemes but eventually we, the tax payers end up paying billions for it as we did in the 80s. The other lesson in that is no regulation is bad and that when you leave raw capitalism to govern itself you end up with the housing and banking crisis we face today and the Enrons, Ken Lays and Charles Keatings of the world.

Patrick M said...

Ah, now the story is fleshed out a little. I'm guessing there were some money and politics going on in Chicago trying to keep Wal-Mart out. If I'm correct (and I usually am), Chicago is pretty liberal, especially with union influence.

This reminds me of a situation just south of me, in Sidney, Ohio. Wal-Mart was building one of their superstores to replace their old store, adding on the groceries. On the same strip was a Kroger store. The union that controlled the Kroger store was out protesting the Wal-Mart. Now they compete side-by-side, but I have not set foot in that Kroger since then.

So my guess is that the anti-Wal-Mart sentiment stems from being in a pro-union area that despises Wal-Mart and their ability to keep unions out.

But that's just a guess.

And as I said, it was the constantly shifting regulations that led to the S&L scandal. There were many things, but the regulatory atmosphere caused things to get so out of whack that when the rules were changed, then changed again, and again, and then suddenly taken away, the criminals stepped up.

As I continue saying, it's the constant intervention that throws things out of equilibrium.