Wednesday, April 05, 2006

Viva that evil capitalism

It's already been a long week. My cold seemed to be much better last Friday when I went out with Jackie, Terrence and a couple of their friends. Then I got so tired over the weekend, the last two days of work have me really frazzled, and walking home earlier from the train station was chilly and very windy. I'm really tired, and I would take a vacation, but I'm juggling three projects that have to get done. The worst part is that I don't dare consume alcohol while taking these cold medicines. At this point, Scotch and lots of proper sleep would be a better remedy.

A week ago, my friend Marshall Manson dropped me a line to tell me that Wal-Mart was reopening two of its New Orleans supercenters on March 29th. As always, I say up front that Marshall does PR for Wal-Mart. I will have further comment on this at the end.

So Wal-Mart again is one of the first, of anyone, large or small, to reopen. Last November, I wrote about Wal-Mart being one of the first retailers to reopen in Waveport, Mississippi. In fact, as Wal-Mart got back into business and (and apparently still at its "everyday low prices"), many "mom and pop" had not even cleared away the debris within their stores. As I said, Wal-Mart and other chains could clean up, reopen and even customize inventory because of their large scale of operations, unlike small, individual stores with limited capabilities and resources.

Some consumers lament the disappearance of the small neighborhood stores, forgetting that chains and franchises tend to provide goods and services with greater efficiency -- which translates into consumers getting more for their money. Part of that efficiency is information, specifically that we know where to go just because of the reputation associated with a name. For example, the other night I went to the Target in Mount Kisco, knowing it stocked certain items. On my way home, I passed by several small specialty stores, as I have done many times before. This time, though, I wondered, "How do people know they're there?" The search costs, whether flipping through the Yellow Pages or noticing a store by happenstance, are enormous compared to the almost instinctive knowledge that Target .

Now let's contrast the performance of Wal-Mart, Best Buy and others with the federal government's. Everyone, whether the strictest libertarian, the staunchest Republican shill or the most state-worshipping liberal, has blasted the federal government's "response" as slow, ineffective and poorly planned. Our reasons all differ, whether we think the officials were stupid or that the feds have no "disaster relief" responsibility in the first place, but I know of no one who thinks the feds responded well in Katrina's aftermath. Six months later, people are still displaced from their homes, schools of all levels are struggling, and local governments still wring their hands. It's only certain retail (i.e. for-profit) establishments that have any true degree of success, yet even the largest retail chains combined did not have the tens of billions of dollars to pour into their Louisiana and Mississippi presences! President Bush and Congress did, though, courtesy of taxpayers, and it is the source of the money that makes all the difference.

Making profit is a powerful motivator in rejuvenating and expanding an economy. It is infinitely more successful than government's power to coerce tax money from some and spend it on others. Like I said in my entry on the Waveport Wal-Mart, it wasn't out of altruism that Wal-Mart rushed to clean up and reopen. It was because there was an entrepreneurial opportunity that could yield profit, and no one in his right mind complained about it (particularly anyone who'd otherwise have to drive 30 minutes just to get groceries). I'd like to again note that Wal-Mart does indeed give a great deal in charitable contributions, but low prices are still its greatest gift. "Gift" is the very word Bastiat used to describe the savings when someone sells to us for less than we'd otherwise pay.

It's the chance for profit that prompted Wal-Mart to try what I find its most interesting experiment. Marshall dropped me another line to tell me about the Wal-Mart in Plano, Texas, which now features high-end electronics, a sushi bar, and even fine wines up to $500 per bottle. Will it work? God alone knows for sure. Wal-Mart could attract a lot of hip 20- and 30-somethings and rake in the profit, or this could be as big a failure as New Coke. At least Wal-Mart (and any other private retailer), not backed by "the full faith and credit of the taxpayer's wallet" (as I put it), makes every effort to calculate risk. Government doesn't have to. Since only a miniscule fraction of the money is his own, President Bush can brag about how the federal government will do "whatever it takes" to rebuild New Orleans. Lee Scott and other Wal-Mart top brass have no such luxury.

The New York Times a month ago ran what was purportedly a news story, but as Marshall, I and many others expected, it was a hatchet job on Wal-Mart, Edelman, and pro-Wal-Mart bloggers (or in my case, as I've said before, I support capitalism, not Wal-Mart itself). The reporter had contacted me like he did a lot of others, but he never did interview me. The part of his story that really got me was the virtually personal attack on Marshall, which was not just unfair but irrelevant. He's been nothing short of professional, courteous and friendly (think of a Boy Scout trying to sell you lemonade), and it was just supererogatory to bring up his personal details, like his own blogging.

After the story, Wal-Mart issued a statement that stated, among other things:
Edelman is fully transparent about their relationship with Wal-Mart in their communications with bloggers. We don't set standards for the New York Times or bloggers. We're engaged in a two-way conversation with bloggers, and not surprising, we have a particular point of view. We have a bipartisan team involved in our blog work including Leslie Dach, Marshall Manson and Mike Krempasky.
Mike was the first at Edelman to contact me, and since then Marshall has been the one "feeding" me information. Do I feel "used"? Hardly. Am I maintaining contact with Marshall for "exclusive information" that will garner me increased traffic? Not even close, especially considering I get so busy that I can blog about just a third of what he sends me. At this point I consider him a friend, not just a contact, but it still doesn't change the nature of how I use what he sends me.

As an advocate of capitalism, I welcome any additional information, from any credible source, whether it's about Wal-Mart's successes or the prosperity of another private company. I could tell from the start that Marshall was sending the same e-mails to many others, so the Times' notion is a erroneous one that bloggers were enticed by "exclusive" information. Information, yes, but hardly exclusive. The Times even tried to paint bloggers with a broad stroke, as if the only reason any of us bother to get Edelman's e-mails is the hope of increased traffic and money from advertisers. Believe me, were I looking for that kind of renown, I'd write about far more interesting subjects.

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