New York City Shuts the Door on Wal-Mart

I grew up in New York City in a family of very modest means. When I left NYC to go to graduate school in 1971, one thing was immediately apparent – if you were of modest means NYC was a much better place to visit then it was to live in. My standard of living rose dramatically as soon as I left NYC.

There are many reasons for this, but one that should not be overlooked is that the cost of doing business is so high in NYC that shopping opportunities commonly available in other places are not available in NYC. One such shopping opportunity is Wal-Mart.

Now if you are hedge fund manger making a seven figure salary, Wal-Mart may not seem like much of a shopping opportunity; but if you are family of four struggling to get buy on a household income of $40,000 annually, the low prices at Wal-Mart are a necessity to a decent quality of life.

It is thus with sadness for these struggling families that I read this Reuters’ dispatch today: ” Frustrated by a bruising, and so far unsuccessful battle to open its first discount store in New York City, Wal-Mart Stores Inc.’s chief executive said, ‘I don’t care if we are ever here.’ H. Lee Scott Jr., the chief executive of the nation’s largest retailer, said at a meeting with editors and reporters of The New York Times that trying to conduct business in the U.S.’s largest city was so expensive — and exasperating — that ‘I don’t think it’s worth the effort.’”

It is fashionable to bash Wal-Mart, but before we do let us consider the impact of doing so on the less fortunate segments of society. Sam Walton the founder of Wal-Mart was a frugal man who saw a larger purpose for his business. Wal-Mart buyers are notorious for driving a hard bargain with suppliers but they are simply carrying out Walton’s mandate to serve the consumer: “You’re not negotiating for Wal-Mart, you are negotiating for the customer. And your customer deserves the best price you can get.”

Competition fueled by entrepreneurial activity has been a tool of growth and prosperity in the United States for centuries. The attack on Wal-Mart in recent years is a symbol of the lack of understanding of this source of prosperity. All of us, even those who don’t shop at Wal-Mart, will bear the future consequences of this lack of understanding.

All Your Past… is Gone: Rutgers 53, Duke 52

All your past except its beauty is gone, and nothing is left but a blessing says A Course in Miracles. When the Duke women’s basketball team beat Rutgers, by 40 points, in December of 2006 it was the worst beating that Rutgers coach C. Vivian Stringer had ever suffered at Rutgers.

Now, fast forward to the “sweet-sixteen” round of the NCAA tournament and the game between Rutgers and Duke on March 24, 2007. Duke went into the tournament as the #1 seeded team, while Rutgers although improved from December was hardly given a chance to beat Duke.

The Rutgers coach is known for her legendary “55” defense that she uses to disrupt the opposition’s offensive flow. When Rutgers and Duke met in December, Rutgers’ excellent freshman class of five players did not know much about defense. They were offensive stars in high school and had no interest in defense. To their credit after several early season painful losses, including the beating that Duke gave them, they were open to learning the importance of defense.

With Duke up by 10 points in the second-half of yesterday’s rematch, you would have expected that Duke would have begun to run away from Rutgers. Instead, Rutgers relentlessly played defense and began to close the score. You could see it on the Rutgers player’s faces – they believed they were going to win. Their “past” was gone; the 40 point loss was forgotten. Final score Rutgers 53, Duke 52.

Would you have faulted Rutgers if Duke pulled away in the final minutes of the game? The media would have said it was a moral victory to hang tough after the earlier big loss. The media would have said that the experience will serve them well next year.

All true and the point of this post is not the final score. The point is that down the stretch Rutgers played without their “past” as a mental albatross. Because they did their “victory” serves as a life lesson not only for them but for all of us.

We carry the past forward only via thought. As our thoughts change, all that is left is what is beautiful. A beautiful defeat in December, because it taught the value of defense, becomes a stirring victory in March.

The Real “Global Emergency”

Every society, every human being, every organization has unquestioned assumptions. These unquestioned assumptions, called paradigms, create problems precisely because they are unquestioned. Indeed, frequently these assumptions are unquestionable. Those who question the orthodoxy are not dealt with kindly.

One of the current paradigms of contemporary society is that global warming is caused by human beings increasing the amount of carbon dioxide in the atmosphere through the process of burning fossil fuels.

On 3/21/07 former vice president Al Gore spoke before Congress and said that the world faces “a true planetary emergency.” The emergency required “a ban on any new coal-burning power plants.”

What if cycles in temperatures were a natural part of earth’s history? What if the variations in the activity of the Sun were the primary driver in climatic changes? What if causation was reversed and global warming caused increases in carbon dioxide.

I am not a climatologist, yet when I watch the British documentary The Great Global Warming Swindle I am struck by the hubris of scientists and politicians who claim it is a proven fact that human beings have caused global warming. Full of hubris they advocate dangerous policies and show little tolerance for dialogue on the issue.

The great English philosopher Karl Popper wrote: “There are no ultimate sources of knowledge. Every source, every suggestion, is welcome; and every source, every suggestion, is open to critical examination.” It is indisputable that when a society forgets this they are heading for trouble.

 

I would never defend poisoning our atmosphere, but yet I know that many of those who are most adamant that global warming is caused by human beings are also most adamant about advocating controls that will visibly hurt the poor third world countries of the world.

 

As this video argues using less fossil fuels has the “unintended consequence of stifling development in the third world, and prolonging endemic poverty and disease.” Al Gore has been in the forefront of the movement to use less fossil fuel. His book Earth in the Balance and movie An Inconvenient Truth has been hugely popular.

 

Yet good intentions are not enough. Al Gore’s home, “located in the posh Belle Meade area of Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service (NES)”. See http://www.tennesseepolicy.org/main/article.php?article_id=367

Seeing your children grow-up malnourished, uneducated and without prospects for a better life is the real every day emergency faced by billions on this planet. This poverty breeds wars. And while the causes of this poverty is far more than the lack of cheap energy, controls that increase the price of energy will prevent solutions from being reached.

Some may imagine living on a bucolic farm in Vermont as an ideal existence. Admittedly there are many benefits of doing so. However, there is nothing romantic about living on subsistence farm in the third world without adequate food, shelter, energy or even a legal system that protects your property rights. This is something particularly vicious about those who have so much condemning others to lifelong poverty.

1/3 of the world’s population does not have electricity. Their lives are frequently short and filled with hardship. Some will argue let “them” use solar energy. For the third world solar energy is not a viable alternative. The documentary asks: If the third world cannot even afford conventional electricity how can they afford the more expensive solar alternative?

Here is the ultimate irony. Those who scream the loudest about man-made global warming inevitably embrace more government planning and control. Such planning and controls gives us heavily subsidized government fuels such as ethanol, which in turn results in a whole set of intended and intended consequences. Not the least of these consequences is the taxpayer subsidizing large corporations such as Archer Daniels Midland. Read this Cato Institute study for an eye-opening report on what ADM gains in subsidies.

There is ultimately a finite amount of capital available to develop new energy sources. Those who would plan and control make less capital available to entrepreneurs who will one day develop viable solar energy systems or other alternative energy sources.

Controls postpone the day that mankind no longer burns fossil fuels and in the meantime helps to prolong misery for many.

“If You Think You Can Control Something”

My daughter, soon to be twelve, takes piano classes at the Peabody Preparatory. One of the advantages of the program is the children are giving several opportunities each year to perform in recital. I believe that these performances give the children a life long gift of being comfortable in front of an audience.

Recently my daughter was nominated by her teacher to play in one of the more prestigious recitals of the year. In addition the following week she would play in another performance that she was selected for. This was all outside of her comfort zone and she was feeling a bit unsure of herself.

Feeling unsure manifested itself with a lot of opinions of what she was hoping she would or would not have to play and opinions that maybe she should only have to play in one recital. It was time for a chat.

I asked her how she felt when her mental activity was focused on what she did not want to do. She responded, very small and constricted. I asked how she played when she felt that way. The answer was equally clear to her.

Then I inquired how she felt and played when she was focused on what she wanted to be. The answer was as clear.

I explained that when she was feeling constricted by her mental activity she was like a thimbleful of water from the ocean. She was small and separated from her Source. In reality she is part of a vast ocean of what Dr. Thomas Hora calls Love-Intelligence. When she decides not to separate from that ocean, Love-Intelligence is able to play through her. When she allows it, only then is she being her true Self.

Lessons are most valuable when they come from within. In her own words here is what she learned: “If you think you can control something, things are harder. If you trust in something, things are easier. Trust in what you can be, rather than what you don’t want to be.”

Chris Dodd’s Assault on “The Rule of Law”

“U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes” Senate Banking Committee Chairman Christopher Dodd said on March 13^th.

So let’s get this straight –taxpayers who did not over extend themselves in the housing bubble or who even remained on the sidelines and rented, will now have to subsidize those whose borrowed in imprudent ways.

Consider two households. One household consists of a family who could not afford to buy the $500,000 home that was $300,000 before the housing bubble began. They are renting a townhome and waiting for housing prices to fall. The second household borrowed more than they could afford and “owns” the $500,000 home. They have borrowed what little equity they may have built up to buy a new car and take vacations.

What happens if the second family is subsidized by government and bailed out? They are able to retain their home. Compassionate? Think before you answer. Where is the money coming from to pay for the bailout? From taxpayers, including the first family who is still renting.

But there is a double whammy on those who were frugal. Subsidies will prevent housing prices from falling. Those who are renting will be forced to remain as renters. Under normal circumstances the bursting of the housing bubble will transfer ownership from those who were imprudent to those who are best able to manage their assets. This is good for all.

But there is an even bigger issue with the bailout that Dodd is proposing. At its core, Dodd’s proposal is an attack on the “rule of law.” At the heart of the “rule of law” is the idea that government shall not play favorites.

When someone takes out a mortgage for more than they can afford, they must bear the consequences. Compassion must be limited to voluntary assistance from their friends, family, church or perhaps Chris Dodd himself. When compassion is coerced we all lose.

At the heart of contract law is the belief that almost all will abide by the terms of the contracts we sign. Our economy runs and trust and not on the courts. When we begin to violate contracts and then expect the government to bail us out, we are beginning a slide down a slippery slope toward the ending of the market economy upon which modern civilization is based.

Jim Cramer’s Attack on the “Workingman”

If you have never watched Jim Cramer’s Mad Money you may want to view a clip before your read the rest of this post. http://www.youtube.com/watch?v=iIUPItnMOSQ

Jim Cramer appears every weekday evening on CNBC’s Mad Money. I won’t comment on Cramer’s manic style but I will comment on Cramer’s hubris. Ask Cramer his view on just about any stock and he has one. What is astonishing though is the popularity of the show. Why would any viewer assume that Cramer could possible have the knowledge he claims he does?

If he was able to forecast stocks with the acumen he claims he could be trading stocks 15 minutes a day and living his life in leisure. He claims he wants to make the public money. I leave you to evaluate his claim.

When the Dow Jones Averages fell 416 points on 2/27 the pundits had to give an explanation. Among their favorites was the prior plunge in Chinese shares and concern over subprime mortgage loans.

But wait, concern over subprime mortgage loans were there when we went the bed night before the mini stock market meltdown. If they were the cause why didn’t the pundits forecast the stock debacle.

The day of the stock meltdown, Cramer pronounced in an CNBC interview that concern over subprime mortgage loans was an attack on the workingman. He advised that the Fed needed to cut rates to help the workingman.

Subprime loans are loans that were given to borrowers without documentation of employment and income and/or to borrowers with less than good credit ratings. Borrowers were frequently lent more than they could afford to borrow.

Despite Cramer’s demagoguery these loans have nothing to do with the borrower being a workingman or not. Cramer’s statement is an attack on every frugal hard-working worker who saved for his home and borrowed prudently.

The subprime loan market exploded because the Fed opened the monetary spigots and banks were only too eager to lend. Advising the Fed to open the spigots again, as Cramer has done, is like advising a fireman to pour gasoline on a raging fire.

If housing prices are not affordable for households of modest means it is because the flood of credit has encouraged prices to be bid up. Honest hard –working households need sound money not cheap credit. Cheap credit encourages speculation, bid-ups prices and erodes savings via inflation.

We watch so called experts like Cramer because we want to believe that there is an expert out there who understands the problem. If they understand the problem we reason they can solve the problem. If they can solve the problem we can control the consequences of our past foolishness.

A pundit who speaks in 30 second sound bites likes Cramer usually understands very little. Their believers want a quick fix. “Why doesn’t someone do something about it” is their motto.

It is principle of life that a reactive fix that comes from a lack of understanding will almost always make the problem worse.