The New World Economy (Wal-Mart is not to blame)

[Thom Little]

In recent weeks, looking toward next year's midterm elections, leaders of both parties have engaged in highly charged arguments about withdrawal from Iraq, Medicaid shortfalls and allegations of Republican corruption. Anyone bothering to peruse the rest of the front page, however, might have noticed a few items that seemed tangentially related, but that, together, tell a story that is far more consequential for the next 50 years of American life. First, just before Thanksgiving, General Motors, buckling under the weight of $2 billion in losses, announced that it now planned to lay off 30,000 workers and scale back or close a dozen plants. A few days later, at the traditional commencement of the holiday season, thousands of American consumers began lining up in the dark hours of morning to be among the first to pile into Wal-Mart, hoping to re-emerge with discounted laptops and Xboxes under their arms. Wal-Mart has now inherited G.M.'s mantle as the largest employer in the United States, which is why these snapshots of two corporations, taken in a single week, say more about America's economic trajectory than any truckload of spreadsheets ever could.

G.M., of course, was the very prototype of 20th-century bigness, the flagship company for a time when corporate power was vested in the hands of a small number of industrial-era institutions. There is no question that rising labor costs hurt G.M., but that obscures the larger point of the company's decline; caught in the last century's mind-set, it has often been unable or unwilling to let consumers drive its designs, as opposed to the other way around. Must the company keep making Buicks and Pontiacs until the end of days, even as they recede into American lore? Many of the workers G.M. decided to lay off last month were its best and most productive. Their bosses simply couldn't give them a car to build that Americans really wanted to buy.

As it happens, G.M.'s inability to adapt offers some perspective on our political process, too. Democrats in particular, architects of the finest legislation of the industrial age, have approached the global economy with the same inflexibility, at least since Bill Clinton left the scene. Just as G.M. has protected its outdated products at the expense of its larger mission, so, too, have Democrats become more attached to their programs than to the principles that made them vibrant in the first place. So what if Social Security and Medicaid functioned best in a world where most workers had company pensions and health insurance and spent their entire careers with one employer? The mere suggestion that these programs might be updated for a new, more consumer-driven economy sends Democratic leaders into fits of apoplexy.

While G.M. rusts away like some relic from the last century, Wal-Mart beckons us toward our shrink-wrapped and discounted future. Wal-Mart's founding family is said to be wealthier than Bill Gates and Warren Buffet combined, and yet more than half of the company's employees don't receive health care, and its enduring quest to bring us lower prices drives down wages everywhere. Here we have the model for globalization as Republicans envision it - a world in which rugged entrepreneurialism is overly romanticized and the unskilled expendable, and where shareholder profits are the only measure of success. Republicans have embraced the future of the global marketplace, but to them the future looks a lot like "Road Warrior."




http://www.nytimes.com/2005/12/18/magazine/18wwln_lead.html?adxnnl=1&adxnnlx=1134900032-b3e5yRHjPOoc6dnsrkystw

[eagler]

1. Walmart is China's 8th largest trading partner

grouped among nations, I recently read somewhere though I can't remember the source. That kinda puts things in perspective.

[tsuki]

2. Road Warrior is about right. Did you catch the Walton bunker behind

chain link and barbwire? Probably can be electrified also. They seem to see the future.