Wal-Mart is No General Motors

Harold Meyerson writes an op-ed in todays NYT about how the USA is now a nation of consumers. Seventy percent of our GNP is due to consuming goods rather than producing them. He points out that this is not always the way it was.
In the four decades following World War II, our largest employer was General Motors; for the past decade, it's been Wal-Mart. GM followed in the footsteps of Henry Ford, who by 1913 had concluded that he needed to pay his workers enough that they could afford to buy a new Ford. Wal-Mart, by contrast, pays its workers so little that they are compelled to shop at Wal-Mart.
To point out the validity of Meyerson's argument the current answer to economic problems in the USA is to give tax money back to the taxpayers in hopes they will consume even more. Meyerson goes on to write:
Today, 20 years after we decided not to have an industrial policy, we have an industrial base that employs an ever-smaller number of Americans. What has kept us afloat during the current decade hasn't been our productive capacity but the inflation of our assets -- the rising value of our homes, against which we've borrowed to purchase the things we could not afford out of our stagnant paychecks. To the extent that the United States had a macro-economic strategy, it was Shop Till You Drop. So we've shopped. And now we've dropped.

2 Responses to “Wal-Mart is No General Motors”

  1. I fail to see what the criticism is (wink!). Ford paid his workers enough to buy one of his products – an automobile.

    Walmart pays their workers enough to buy one of their products as well – a can of Pringles.

  2. Me says:

    You said:
    \”Seventy percent of our GNP is due to consuming goods rather than producing them.\”

    Hmmm? Actually, Meyerson was referring to GDP not GNP, but they\’re so close that this is merely semantics. But it\’s your logic that is befuddling. If GDP (or in your case, GNP) is the (albeit weak) figure of total productive output of our domestic economy, what do you mean by this phrase? Are you claiming that we consume more than we produce even though private consumption is 70% of GDP (again, you argue for GNP)? Does the fact that in the U.S. we spend far more on higher education, which is categorized as consumption, than any other country mean anything?

    Meyerson\’s an idiot – and a poorly informed one at that. You don\’t have to be fooled by his stupidity.

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