Xoutpost.com - Too Big to Fail

Xoutpost.com (https://xoutpost.com/forums.php)

- Politics Forum (https://xoutpost.com/off-topic/politics-forum/)

- - Too Big to Fail (https://xoutpost.com/off-topic/politics-forum/79862-too-big-fail.html)

Further to MD's post on America Viewed as a Corporation, here is a thoughtful view of the North American economy that parallels Wal Mart's challenges with those facing North American society as a whole. The author's view is that the underlying cause is a belief in today's society that we can get something for nothing. An excerpt:

Quote:

Everything comes at a cost. In this case, the brief moments of hyper-prosperity we experienced over the past two to three decades (and more generally, since WW II) were gained in exchange for a more fragile, less-resilient America. We now have a supply chain that extends across the globe, but it is susceptible to swings in energy prices, which we don't control. We have little domestic capacity to fall back on.

We all have a chance to live like European royalty on our suburban estates, but again, we are dependent on cheap energy, a massively complex and fragile supply chain, and an easy, stable money supply. We have no energy program. Period. No backup plan. We've spent ourselves in the public sector, but especially in the private sector, so far into debt that we have no reasonable chance of paying it back. We've not borrowed primarily to create things of value, just to consume. Again, no Plan B.

We can build millions and millions of dollars worth of infrastructure for the near-term growth it provides, finance it with cheap borrowing or subsidies from higher levels of government, but now we have to maintain it all with returns well short of what is needed. Didn't anyone ponder this as we went?

The odd thing about Wal-Mart is that, for many places — especially small towns and suburban areas — it is too-big-to-fail. Literally, without Wal-Mart, what would people in some places eat? There are no local bakeries anymore — they've all been put out of business. Same with the butcher, traditional clothiers, shoe salesman, repair shops, printers, etc ... They are all gone, replaced by the magic prosperity-boxes.

Here's a little insight about Wal-Mart that is important to grasp as well: Their business model, like everything else American, relies on ever-increasing rates of growth. Is seven consecutive quarters of declining sales a momentary blip on the radar or a harbinger of the failure of a complex and fragile model?

Full article here: Wal-Mart. Too big to fail. | New Urban Network

Little known fact, I've never once been in a Walmart. Ever. And not because I didn't want to, they're just not as prevalent in the north east, i.e. NY.

Quote:

Originally Posted by Thunder22 (Post 810360)

Little known fact, I've never once been in a Walmart. Ever.

That is actually impressive. I find myself in one about once or twice a year, but that is about all.

Good post, JCL and good analogy in the article.

Late to the reading, but very good art., imo...Good dig out, JCL!

I found myself nodding as I read, thinking the writer must be inside my head. As the Wal-Mart 'shopper' in our house, I like it and can hardly stand the joint.

For the dozen things I need, (of the couple dozen things they have I want/need), it offers good prices, (if carefully considered), and a one stop joint to grab that kind of stuff: paper goods, snacks, toiletries, et al.

The town I live in 7 months a year had one for years; then they closed it and built a 'super Wally joint' on other side of town. It is bigger, but not necessarily better. The new joint, in a 'beautified' strip mall, did bring in Best Buy, (lol! demographics won't allow the BB to be successful, imo), a Verizon store, and a couple other gems.

'Downtown' remains viable and fully rented, a few miles away...for now.

The growth deal is really driven by Wall St and their misguided mavens where it is nearly all about 'growth', EPS, FCF, dividends, and bettering last Qs numbers. Whether any of that is good or not good is moot, because it is what it is.

Wal-Mart says they have woken up, (missed Q #s will do that to any group of suits), but they have a fine line to walk, imo: their stores are dingy, heartless and full of stuff no one needs more of. They continually move to private label goods and/or reduce brand offerings. They cater to the working poor and the barely middle class.
But, changing that or moving slightly upscale or, even spending the dough on better cosmetic stores, costs and does little to entice the hoi polloi, imo.

In western NC, there is really little need for more stores selling 'stuff', with the exception of some of the really remote/but growing little burgs.

In SW FLA, where we do 5 months, we have seen the result of a popped bubble and the absolute plethora of more strip malls, bigger malls, and every corner full of a CVS, a Walgreen's and 3 other common/repetitive stores. I do not 'get' the biz model these retail joints are using, as the daffodil approach of dozens of stores in every zip code, 'for growth', is suspect these days, even by WallSt standards.

Lost my track...but, I could live without Wal-Mart, but I am not sure that the WalMartNation could do so.
BR, mD

The fact is that most towns/villages block big box retail. As a result they build big box at the town line and over time the other retail moves out of the town and to the new location.

In Hampton Bays Long Island that built a new strip center in the middle of town and brought new life back to the town. In this case it was a large supermarket and other stores. Allowing/providing for large retail stores in down town locations is key to maintaining the CBD. The downtown is thriving and the retail growth is right next to the rail line and bus stops (where it should be!).

In Riverhead they built the outlet mall on the edge of town and all the retail has infilled around it. The downtown and other strip centers closer to the CBD (central business district) are dying. Walmart is set to build a new Super Walmart near the outlet mall and this will reinforce the problem.

The point is that you can't stop the growth of big box in the USA and you are better off allowing/providing for growth in the CBD Walmart is a prime part of the growth of big box but they are not the only source. Americans attempt to use zoning to block new growth often with bad results. The fact is that we (the average American) votes with our pocket books and support the growth of super sized stores like Walmart. We like to go to stores with large free parking lots and we like new larger store.

American also are blocking wind and solar energy because they don't want to see it (not in my backyard) and no one wants nuclear or fracting for natural gas
( Fracting for Natural Gas - the process of using water and chemicals to fracture the ground | Ideas for a Sustainable World
Marcellus Shale Natural Gas Drilling in NY ) but we all want to be green right? We also want the American economy to grow yet we keep sending dollars off shore for oil.