The Wal-Mart Question

Here is something I have heard a couple times from various economists at events I have attended, so I am not sure whom to give credit to.

But the saying is: Wal-Mart does not put mom and pop stores out of business, we do.

One of the central points underlying the standard argument against Wal-Mart is that it shows up one day in Smallstown, Midwest where there was a happy Main Street, come back a year later and now happy Main Street has turned into depressing Main Street with all the jolly shop keeps now wearing blue at Wal-Mart as exploited employees while the towns people brainlessly shop there.

What the above saying highlights is our role as consumers in this process. Wal-Mart does not bulldoze existent businesses when it enters a community. If it did, that would be immoral. As far as I am aware, they do not use violent Mob techniques to run business owners out of town either. If Wal-Mart shows up in your community, you have a choice: continue shopping at Main Street or go to Wal-Mart. If Main Street is so fantastic, than it would still be around. And places like that are, even in areas with Wal-Marts, i.e Laguna Beach, so it's not a hard and fast rule.

A standard rebuttal is that Main Street shop keeps can't possibly compete with Wal-Mart's supply chain, stock, etc. This is true. Whenever a better, streamlined process comes along, stores/industries go out of business. Think of what the automobile did to the carriage industry, or the PC to to the typewriter industry or (to borrow Bastiat's idea on a similar line) what the sun does to the light bulb (or candle) industry. This creative destruction is an economic fact of life and while painful, provides a better quality of life in the end, as can be seen by cars, PCs and any other advance in technology.

So while Main Streets sadly do change, it is a process in which we as consumers have a role. As long as you have choice and means, you can keep shopping at Main Street or check out that new Wal-Mart. In the end it works itself out.

Jesus, Bombs and Ice Cream

I would probably disagree with the politics and economics at this festival, but it sounds like a pretty darn good time. I kind of want to go. People talking about God, peace and enjoying ice cream. I'm all on board for those things.

"Ugly? You May Have a Case." An interesting abstract about a call for legal protection for the ugly:

"A more radical solution may be needed: why not offer legal protections to the ugly, as we do with racial, ethnic and religious minorities, women and handicapped individuals"

I feel like there a lot of underpinnings when policy of this type is pushed. What if I'm not naturally athletic and want to play football because professional football players make a lot of money? Should the state advocate on behalf of those types? One can work at being more attractive just like one can work at becoming more athletic. Granted, that's not a great analogy as there are some naturally ugly people who don't have much of a choice if they worked at it or not.

Should the state legally protect and advocate on behalf of those who "suffer" any type of what may be called a "shortcoming"?

Wal-Mart Rock and Rollers

This NPR article briefly explains how Wal-Mart, Home Depot and other big box stores prepare for storms/disasters in a way government agencies attempt to emulate.

Self interest comes to the aid of others.

Conan and Baseball

I never tire of this clip.

More From Moore

Wall Street Journal editor, Stephen Moore articulates basic economic principles in a concise way I hope to emulate. In this article entitled "Why Americans Hate Economics," there are a couple nuggets of economic truths I'd like to pull out. As for the basic message of the article as the title implies, I wasn't particularly swayed. But that's not important.

"Economic bimboism is rampant in Washington. The Center for American Progress held a forum earlier this summer arguing that raising the minimum wage would create more jobs. For this to be true, you have to believe that the more it costs a business to hire a worker, the more workers companies will want to hire."

Indeed.

"A few months ago Mr. Obama blamed high unemployment on businesses becoming "more efficient with a lot fewer workers," and he mentioned ATMs and airport kiosks. The Luddites are back raging against the machine. If Mr. Obama really wants to get to full employment, why not ban farm equipment?"

This reminds me of an anecdote I have heard regarding a trip Milton Friedman took to China. (It may be true or not, but the moral remains the same): A Chinese government official was taking him around, showing him the wonders of the industrious People's Republic. They came up on a canal project where there were hundreds of workers digging the canal with shovels. Milton asked why they were using shovels and not bulldozers. The official said this method created more jobs, to which Milton replied, Why not make them use spoons?

The notion that technological advances are "bad" includes the use of technological advances, such as shovels or some sort of filing system by a clerk whom an ATM "replaced." Also inherent in that assumption is this romanticism of the technology from yesteryear, but not too far back or too current. Just that technology in the middle, "when there were the good times."

The Forgotten Paul

This video was all over the place yesterday, so I'm a little late. But if you haven't seen it, give it a view. Jon Stewart justly calls out the media on seemingly ignoring Ron Paul.

The Cardiff Kook

So this sculpture of a surfer in Cardiff (northern San Diego) is routinely made fun of. I heard about it on the news after the latest prank with the pterodactyl. While the surfer's pose is rather ridiculous and appears to not even be riding a wave, there seems to be a very active pranking scene that perhaps makes it all worthwhile. Check out all the pics on this site dedicated to recording them.

Wife Sales

This working paper entitled "Wife Sales" by some Mercatus Center scholars has (obviously) attracted some attention on places like a Forbes blog and other econ blogs, such as the Freakonomics blog. Give it a read or at least a perusal in order to get past the initial shock of the title and perhaps see what they are trying to say.

Here's the Abstract:

For over a century English husbands sold their wives at public auctions. We argue
that wife sales were indirect Coasean divorce bargains that permitted wives to buy the
right to exit marriage from their husbands in a legal environment that denied them
the property rights required to buy that right directly. Wife-sale auctions identifi…ed
"suitors"--men who valued unhappy wives more than their current husbands, who
unhappy wives valued more than their current husbands, and who had the property
rights required to buy unhappy wives' right to exit marriage from their husbands. These
suitors enabled spouses in inefficient marriages to dissolve their marriages where direct
Coasean divorce bargains between them were impossible. Wife sales were an efficiency-
enhancing institutional response to the unusual constellation of property rights that
Industrial Revolution-era English law created. They made husbands, suitors, and wives
better off.

This Blew My Mind

Found this link on reddit.

Pencil art by Dalton Ghetti.

"The System Works"

I think Charles gets it right in his article "The System Works."

Some highlights:

"Of all the endlessly repeated conventional wisdom in today’s Washington, the most lazy, stupid, and ubiquitous is that our politics is broken. On the contrary. Our political system is working well (I make no such claims for our economy), indeed, precisely as designed — profound changes in popular will translated into law that alters the nation’s political direction."

"The conventional complaint is that the process was ugly. Big deal. You want beauty? Go to a museum. Democratic politics was never meant to be an exercise in aesthetics."

Read any American presidential/political biography from any time and you will read about name calling, bickering, all that stuff. There was no "happy time" in politics. People are always fighting about this stuff. Peacefully fighting, that is.

Gridlock also prevents stupid decisions from being made. Or at least gives us time to analyze them if we wish and then enter the debate before they are whisked on through onto the books.

Bad News, Burdened Position

Today, the headlines are not that great for the world or US.

The market has only been open an hour and the DOW is already down 391 points as of 10:30AM EST.

I still find it hard to believe that 30 service members were killed in a single, seemingly lucky shot incident in Afghanistan.

Of course there was the downgrade of American bonds by S&P from AAA to AA+ (which in the grand scheme of things is not a junk bond).

This report from CNBC cites incidents of unrest all around the world.

President Obama's name is mentioned in nearly every article, and I can only imagine how he feels right now. Apparently his approval ratings are falling too. I assume he is in a dark place about it all and therefore needs our prayers.

John Kerry's Call for Speech Limitation

"Sen. John Kerry (D-MA) told MSNBC's "Morning Joe" on Friday that the media has the responsibility to not give equal time or credence to the Tea Party's views."

Sure, some outlets can limit what they allow certain people to say, that is their choice. Just to hear a call from a senator for limiting the dialogue about ideas in the name of not confusing the poor bewildered populace is a little troubling.

North Korea's Website

Ever been to North Korea's website? If not, it's worth poking around. The format also appears to not have been updated for awhile. I found the nuggets below in the website's section on business in North Korea. The Independent also has this photo gallery of life in Pyongyang.

"The DPR of Korea (North Korea) will become in the next years the most important hub for trading in North-East Asia."

"Highly qualified, loyal and motivated personnel. Education, housing and health service is provided free to all citizens. As opposed to other Asian countries, worker's will not abandon their positions for higher salaries once they are trained."

If NK is so great for business, why isn't there any business there? Also, why does it look like this at night if things are so great?