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Boehner’s Blindness: The Death of Mom and Pop

2011.02.14

The 2012 budget proposals are due today, and it almost seems superfluous mentioning that both parties seem to have lost the plot.  The Democrats, as always, have proven to be feckless milksops, incapable of standing by their principles and turning their ideas into workable solutions.  The Republicans, as always, are brimming with rage and armed with talking points, but lack any semblance of substance behind the rhetoric.  It also seems superfluous mentioning that both parties continue to ignore the real causes of the rampant deficit.

Mom and Pop

Mom and Pop, before being bludgeoned to death by Boehner's backwardness.

But the most insufferable, exasperating twaddle flows from the mournful mouth of our new House Speaker, representative John Boehner.  As one who follows his twitter feed, I find his constant caterwauling over Barack’s “job-killing” docket both wrong-headed and offensive.  As politically-savvy observers have long known, Republicans operate under some mystic new age belief that repeating something ad nauseam eventually makes it so.  Reality works a bit differently, though.  In reality, no political party does more to castrate small businesses and extirpate American jobs than the Republican party.

The idea of regulating businesses is anathema to the GOP.  In their view, regulation does nothing more than stifle growth, provoke investors, and wither profits.  That point of view does make a type of superficial sense.  I mean, the dissolution of Standard Oil undeniably hurt the company.  But it was better for American consumers.  We have the Sherman Antitrust Act for a reason.  (And, a gentle reminder, Republicans backed the Act and helped ratify it in 1890.  But it was a better different party back then.)

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But reality, again, is not the simplified, uncomplicated hallucination shared by the mouthpieces of right-wing talking points.  I’ve heard from a great many Americans, from all over the political spectrum, lamenting the disappearance of the “mom and pop” shops that used to line Main Streets across the country, the independent coffee shops, music stores, furniture makers, hardware stores that fill the romantic recollection of decades past.  Republicans seem to think this has to do with tax hikes and overregulation.  In fact, it is precisely this attitude of wanton deregulation that is crushing small businesses.  Allowing big business carte blanche to indulge in shady, sinister market practices is damaging to American jobs and employees.

Consider Starbucks.  Anyone who’s ever been to Seattle or Manhattan knows that if you blindfold yourself, you’ll run into a Starbucks within a minute wherever you’re stumbling around.  Doesn’t it seem odd?  Did anyone wonder exactly how this came to be?

Starbucks’s strategy was called “cannibalization.”  Nice name, huh?  They would enter a city they were certain they could blitz, and erect so many stores as to overwhelm the competition.  But the most vile interesting part of their strategy was, they would build stores so close together that they would not only steal competitors’ business, but business from other Starbucks shops.  They intentionally operated these stores at a loss, but it was okay, because the total revenue from all the shops was steadily increasing.  Goodbye, Mom and Pop.

Is this okay?  Is this just the natural result of a company doing well, or is it a deliberate, involved plan to annihilate competition and rule the marketplace?

Queequeg does some quick math.

Queequeg does some quick math.

Or take Wal-mart.  They employ a similar strategy.  I won’t even go into how they treat their American employees, or pathetically exploit foreign workers.  Okay, those issues may come up in a bit.  But I’ll begin by saying they cannibalize much in the same way that Starbucks does.  But Wal-mart doesn’t stop at simply screwing over their independent competition, they screw over American vendors as well.  Says Naomi Klein in her consciousness-raising manifesto No Logo:

The recipe that has made Wal-mart the largest retailer in the world…is straightforward enough.  First, build stores two and three times the size of your closest competitors.  Next, pile your shelves with products purchased in such great volume that the suppliers are forced to give you a substantially lower price than they would otherwise.  Then, cut your in-store prices so low that no small retailer can begin to compete with your “everyday low prices.”

…[Wal-mart] won’t move into a new region until it has blanketed the last area with stores–as many as forty in a hundred-mile radius.

But what’s wrong with low prices?  That’s central to capitalism, right?  If Mom and Pop can’t provide the same value for a lower price than their competitor, sayonara!  But the biggest problem is that Wal-mart artificially lowers its prices to such a degree that the companies that produce the items it sells cannot make a profit.  So these suppliers end up dropping much of their workforce, and as often as not, relocating production overseas where labor is far cheaper.  Wal-mart kills American jobs.  Even the products it makes and distributes itself are made overseas, usually under horrific working conditions.

Nomnomnomnom...

Maybe Nemo's in there...

Maybe you are still okay with all of this.  Cheap labour is good business sense.  Sure, there is a kind of logic to that.  But try this:

Does it shock you to learn that Wal-mart gets public subsidies to open its stores?  That’s right, the largest retailer in the world doesn’t even pay for its own warehouses.  And you may think to yourself that, being the largest retailer, they at least do provide many stable jobs for hardworking Americans.  But, no, this union-despising, money-making behemoth keep wages so low and hours so few that a full one-fifth of its labor force are on public assistance.  According to the University of California Berkeley Center for Labor Research and Education, taxpayers spend $420,750 per year per store on assistance for Wal-mart employees.  This doesn’t even include healthcare costs, as Wal-mart’s labor practices ensure that fewer than fifty percent of its employees are covered by its health plan.  Could that money be better spent, you think?

Is this okay?  Again, it is good business sense.  It’s kind of ingenious, actually–having the taxpayers pay their employees for them, so corporate profits are ballooned to the max.

Are these okay corporate practices?

I am actually asking you.

But it's okay 'cause the Dow's over 12000.

This is what we get when we stop regulating big businesses.  In a country where money and profits are everybody’s bottom line, there is nothing off the table when it comes to growth and expansion.  Mom and Pop will close and start working for the nearest corporate conglomerate.

These two examples do not even begin to scratch the surface.  They do not approach the surface.  You can’t even see the surface from where they are.  There are hundreds more examples of these kinds of practices across America.  And I didn’t even get to the media

So the next time I hear Mr Boehner prattle on about Obama’s “job-killing” policies, I’ll sigh with exasperation at his lapse of logic, and lament that he probably believes what he is saying.  Obama may not be doing much to help job creation, Mr Speaker.

But you’re shooting it dead.

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2 Comments leave one →
  1. eHansWB permalink
    2011.02.14 21:22

    I only partially agree… Wal-mart employees have a choice – they could choose not to work at Wal-mart and find a job where they do receive benefits, better pay and better hours. If an individual applies for a job at Wal-mart they know what to expect. If an individual is not okay with their employment practices they should see other employment. If Wal-mart provided more hours and benefits to its employees then they would hire fewer employees, thus increasing the unemployment rate. Thoughts?

    • 2011.02.15 10:49

      Part of Wal-mart’s insidious business practices involve elbowing out all competitors so they are the dominate player in a region. This may not be so bad in a bigger city, but in a rural area, where Wal-mart becomes the primary employer, it is bad indeed. If you’re supporting a family of four on $8.65 an hour, you kinda need that $8.65 an hour.

      Would Wal-mart hire fewer employees if it extended more benefits? Well, anything to keep that profit margin high. But the nearly numberless suits brought against the company for its illegal labor practices speak volumes. (One class-action suit was filed by employees locked in their stores overnight to work, many off the clock.) No one should expect to be exploited to such a degree when seeking a job in America.

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