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the Wal-Mart episode.

August 26 2009 at 4:45 PM
logruszed  (Login logruszed)

 
While many of the issues PnT point to are valid criticisms of the Wal-Mart detractors themselves (like their overtly classist behavior), the biggest single issue that Penn and Teller overlook is that Wal-Mart engages in business practices which are harmful to the middle-class of the U.S.

Yes it's true that the "sweatshops" overseas may actually be beneficial for the workers who are overseas, and the low cost of labor is a short-term benefit for the consumer, ultimately Wal-Mart is shipping U.S. dollars overseas and those dollars do not return to the U.S. While having goods manufactured by American labor would increase the cost of consumer goods here it would also increase domestic labor in median paying jobs which means more money the average person has to spend on those more costly goods.

As much flag-waving as Penn does on the show you would think he would be careful to note the trade imbalance as being a very legitimate negative outcome of overseas manufacture.

It is true that Wal-Mart didn't invent this kind of business practice, but as the single largest retailer in the world they are the largest current perpetrator of it and therefore doing the most damage in terms of propagating the decline of the U.S. manufacturing base.

I get that Penn is a free-market libertarian, basically a "survival of the fittest" guy, but you cannot simply ignore a trade imbalance that is obviously harmful to a national economy while waving the flag of that nation and claiming some kind of patriotic affiliation.

 
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Anonymous
(Login mindme)

Re: the Wal-Mart episode.

August 28 2009, 7:04 AM 

||ultimately Wal-Mart is shipping U.S. dollars overseas and those dollars do not return to the U.S.||

Yes they do. It's called the capital account (the counter part to the current account). Woo-mart in Beijing doesn't take US dollars. It takes Yuan. If you're in China with a pile of US dollars and want to buy a house in China, you don't do it in US dollars. You do it in Yuan. So you need to give it to someone who has a lot of Yuan and wants US dollars (to spend in the USA). You could also take those US dollars and buy Americans stocks, a block of condos in New York, send your kid to Harvard, etc.

So I mean it might suck if you're making coffee makers in the USA but if you're selling Microsoft stock at a profit to a chinese investor or you're selling your condo at a profit to a chinese guy setting up his kid at Stanford, well, so what?

|propagating the decline of the U.S. manufacturing base. ||

Also the American manufacturing base is not in decline. America is the single largest manufacturer in the world. America has lost a lot of jobs in manufacturing but then the dairy industry lost a lot of jobs in terms of milk maids. The farming industry lost a lot of jobs in terms of field hands. If someone told you in 1903 "well today agriculture employs 40% of Americans but at the end of the century it will employ 2%" you might think that was a dark, dark future. However 2% today can produce a huge excess of food 40% of the population couldn't. All thanks to massive productivity gains.

So American factories are far more productive (in terms of the past and in terms of chinese factories) and can produce more today than ever before. They can do it with far fewer jobs. Productivity in an economy is not a bad thing. It's the best thing in the world if you can produce more with less. Why ever would you want to get in the way of that?

http://www.aier.org/research/commentaries/206-the-decline-of-manufacturing

Yes we don't make as many cars as we used to and the cars we make require less people. The media tells you about the 10,000 jobs lost in the Michigan auto industry but then they rarely report the 100 jobs gained at a plant making drugs and 50 jobs gained at a factory making specialty foods and 25 jobs at a precision equipment firm and so on.

It might suck a 50 year old is subject to the creative destruction that runs a modern economy but then that 50 year old has also massively benefited from the productivity gains. He's not had to toil in the fields for his supper, for example. His kids won't have to work in a factory.

I grew up in an automotive town. My parents generation, people prepared themselves in high school for a job at GM they knew was waiting for them. My generation, I knew that job would not be waiting for me so I prepared myself for the high tech field. I believe my work day is a lot more enjoyable than what my work day would have been at GM. That's what each generation does. Each generation prepares itself for the jobs waiting for them, not the jobs that waited for their parents. Some people are unfortunate enough to be on a cusp where the economic landscape changes. But hey reality.


--------
Conspiracy Skeptic Podcast
http://www.yrad.com/cs

 
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Tesseract
(Login Tessersnacks)

Re: the Wal-Mart episode.

August 29 2009, 7:27 AM 

The world would be a much better place if the free market prevailed. Austrian Economics points that out.

http://mises.org/ this is a good place to start to find out about free markets and Austrian economics.

http://mises.org/store/Free-Market-Economics-A-Reader-P393.aspx This is a good book to read about free markets.

http://en.wikipedia.org/wiki/Free_market This is the Wikipedia dictionary entry about free markets.

We have all had economic classes in high school and college. They teach Keynsian economics which is WRONG and hard to understand. John Maynard Keynes was wrong about a lot of economic theories.
Austrian economics on the other hand is CORRECT and much easier to understand. Thank you, Ludwig von Mises and others like Murray Rothbard, Friedrich A. Hayek, and Henry Hazlitt. This is just a small list.

 
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zCarl
(Login zCarl)

Re: the Wal-Mart episode.

August 29 2009, 2:11 AM 

I would like to take all of the people who think we are destroying ourselves by buying cheap imports, and then get all of the people who think we are abusing the Chinese by giving them money, and let them work it out. Then they can present their theory to the rest of us.

 
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Mindme
(Login mindme)

Re: the Wal-Mart episode.

September 2 2009, 6:53 AM 

Here's another way to envision the problem with "we send dollars to china and they never comes back".

A dollar gives you a right to exchange it for goods or services. It's not like gold where you can keep it in your vault then issue your own money against the gold. If you give me an LCD tv and I give you a slip of paper with a large number on it and you never then use that slip of paper to demand a good or service back from me, who is the winner and loser? It seems to me I win.


--------
Conspiracy Skeptic Podcast
http://www.yrad.com/cs

 
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Kasey C
(Login kschang77)

You seems to have missed a part of their argument

September 4 2009, 10:20 PM 

The part that you seem to have missed is the average American family SAVES MONEY by going to Wal-Mart. That money is spend WITHIN the community they live.

So saying that they 'destroy' middle-class is, frankly, ********. They hurt SOME middle-class (the shop owners), but they benefit a majority of others, who now can spend the money they saved at Wal-Mart SOMEWHERE.

 
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