Friday, August 25, 2006

The American standard of whining - Forbes.com

Virginia Postrel writing in Forbes:
Wal-Mart and other superstores charge up to 27% less for food than traditional supermarkets, estimate economists Jerry Hausman of MIT and Ephraim Leibtag of the Department of Agriculture. But the BLS doesn't factor those lower prices into its inflation estimates. It simply assumes that Wal-Mart's price reflects worse service, and ignores the savings.

Government statisticians, Hausman complains, "want to act like accountants, and they don't want to take economics into account at all."

Using ACNielsen data from 61,500 households, Hausman and Leibtag calculate that grocery shoppers are 20% better off--not the full 27%--with a superstore shopping trip. "So some of the food isn't quite as good or the diversity isn't quite as good," says Hausman. "But you still get a huge boost."

Since groceries make up 12% of household spending and as much as 25% for low-income Americans, this distortion significantly understates real incomes, especially at the bottom.
...
Gordon [economist Robert J. Gordon of Northwestern University] is the author of a much-cited study showing that from 1966 to 2001 real income kept up with productivity gains for only the top 10% of earners. What the pessimists who tout his study don't say is that, while Gordon does find that inequality is increasing, he's convinced that the picture of middle-class stagnation is false.

"The median person has had steadily improving standards of living," he says. But real incomes have been understated. The problem lies in how the U.S. Bureau of Labor Statistics calculates the cost of living.
If you are for the little guy you should be a fan of big box stores. Yet Wal-Mart and other big box stores are routinely attacked by Democrats in the U.S. Congress. People have noticed.

A recent LA Times editorial:
The gusto with which even moderate Democrats are bashing Wal-Mart is bound to backfire. Not only does it take the party back to the pre-Clinton era, when Democrats were perceived as reflexively anti-business, it manages to make Democrats seem like out-of-touch elitists to the millions of Americans who work and shop at Wal-Mart.

One reason the Democrats may have a tin ear on this subject is demographic. Certainly most of the party's urban liberal activists are far removed from the Wal-Mart phenomenon. The retailer has thrived mainly in small towns and exurbs, which is one reason a Zogby poll found that three-quarters of weekly Wal-Mart shoppers voted for President Bush in 2004, and why 8 out of 10 people who have never shopped at Wal-Mart voted for John Kerry. Denouncing the retailer may make sense if the goal is to woo primary activists, but it's a disastrous way to reach out to the general electorate. Or to govern, for that matter.

Liz Peek writing in the NY Sun:
Wal-Mart has recently been named by Black Enterprise magazine as one of the country's top companies for diversity. The firm was also celebrated this year by Diversity Inc., Asian Enterprise Magazine, the National Association of Women, Black MBA Magazine, Careers & The Disabled Magazine and by Hispanic Magazine for similar accomplishments.

This is the company that Democrats are campaigning against?

That's just the beginning. Read the whole thing.

UPDATE: Virginia Postrel has more here and here.

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2 Comments:

Blogger secretdubai said...

I'm a bit of a snob when it comes to food and supermarkets. I love luxury products for a start.

When it comes to basic products, I also have to have ones with good, natural ingredients, so no cheap crap or chemical packed stuff, which pretty much rules out most No Frills type products. Obviously basic food stuffs like flour and sugar I couldn't care less about (though I'll pick non-GM if I can identify it) but when it comes to eg choc chip biscuits, I scour the packaging and look for the ones with no artifical colourings etc.

And I always buy free range eggs. I can cope if they're not organic, but they have to be properly certified free range (and not "barn fresh" or "deep litter" or any deceptive rubbish). We used to keep chickens and this is the least I can do to honour their memory. It means buying hellishly expensive imported eggs - well over 27% more than the regular battery horrors - but it's worth it to know the fowl that laid them graze in proper air and sunlight.

3:07 AM  
Blogger Cajun Tiger said...

Very good post! The LA times quote nails it. The libs are hog tied to the unions due to getting so much campaign money and labor, so they have to do their bidding, economy be damned!

2:45 PM  

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