VitalAccurateThinking

Loren Steffy on Wal-Mart

Just when I think The Houston Chronicle's Loren Steffy gets it, he goes off the economically muddle-headedness deep end. The bottom line of this Loren Steffy article on Wal-Mart is that it is OK for Wal-Mart to push prices lower for consumers and profits lower for pharmaceutical companies, but all other Wal-Mart competitors should be immune to market forces.

Here's the crux of the Wal-Mart paradox: We can find fault with a lot of things it does, but we can't deny the benefit. We don't want to shop there, but we inevitably do. The lure of its low prices and convenience makes it seemingly unavoidable.

We love to hate Wal-Mart, and we hate that we love it.

Therein lies the marvel that has made the company what it is. As Joseph Nocera pointed out in a New York Times column last year, Wal-Mart probably did more to keep inflation in check during the past 15 years than former Federal Reserve Chairman Alan Greenspan.

I still wish Wal-Mart paid its employees better and offered them better health coverage. I wish so many small businesses weren't crushed in its unstoppable advance across the retailing landscape, and I wish it hadn't tried to lower its own benefit costs by embracing a plan to discourage long-term employment.

But this time, I'm happy to see Wal-Mart's juggernaut clashing with the health care colossus, bringing all its competitive weapons to bear on a market that desperately needs lower prices and a smiley face.

So for once, let's let Wal-Mart be Wal-Mart.

I ask, why "for once"? Wal-Mart is a company that has done more to bring all the products and services people need at low prices than any other company in America. They provide a much higher standard of living to working people than they could otherwise afford. That Steffy is willing to accept a competitive market-based stance in vital drugs, but refuse to accept competitive market forces in groceries and other vital human needs (clothing, furniture, etc.) betrays an intellectual and economic contradiction. This contradictory stance indicates Steffy needs to rethink his entire way of thinking about economics. That he has the pulpit of the Houston Chronicle to spout economically muddled thinking is scary.

posted by Jim VAT @ 9:33 AM