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Remember Wal-Mart’s “Buy American” Program?

Robert Litan offers this advice to Lee Scott in the current issue of Foreign Policy magazine:

Lie Low on China: Wal-Mart has a special relationship with China. In 2004, your company accounted for almost 10 percent of the $197 billion in goods the United States imported from the mainland. So Wal-Mart has a keen interest in what happens in the increasingly turbulent U.S.-China relationship.

For the last decade, the United States and China have had an implicit bargain: China wants to keep its export prices low so it pegs the yuan to the dollar, and the United States needs China to use its export revenue to by Treasury bonds and finance the huge U.S. deficit. The Bush administration, pressed by many on Capitol Hill, pounded the Chinese to revalue or “float” their currency. In July, China finally budged--but just an inch, allowing its exchange rate to move up or down by about 2 percent against a basket of foreign currencies.

China’s move--small as it is--probably will ease the China-bashing for a while. Truth be told, your interests are probably closer to Beijing’s than Washington’s when it comes to revaluing the yuan. You want low prices on the goods you buy from China, so a more significant revaluation of China’s currency may hurt your bottom line. So, in the meantime, lie low. But it wouldn’t hurt to diversify your supplier base so that when the yuan does rise further, as it inevitably will, you’ll be able to quickly turn to other suppliers who are almost as competitive as the Chinese are now.

  • Click here to read the full story (subscription required).

  • Click here (PDF) to learn more about how Wal-Mart is trading away America’s future to fatten its bottom line.

Posted by Nu Wexler on Tuesday, December 06, 2005

Click Here for a Printer-Friendly Version

COMMENTS

It was nice of Robert Litan to be concerned about Lee Scott and Wal-Mart by suggesting they diversify their supplier base.  No offense Robert, but I think Wal-Mart is way ahead of you there.  Why do you think they lobbied so hard to make sure CAFTA was passed this last summer?

As I and many others have already stated, both NAFTA and CAFTA are bad for America and bad for Central Amerca.  Neither one of these should have neen passed.  Congressional Hispanic Caucus leader Rep. Hilda Solis (D-CA) agrees.  She told CNN the deal is very similar to NAFTA. “I can see the same pattern occurring in Central America,” she said. Corporations will use CAFTA to “drive down as much as they can the wages in Central America.”

But of course we know this is Wal-Mart’s way of “rolling back the prices.”

Tom Boese
Field Producer - Wisconsin
Brave New Films

Tom in Menomonee Falls, Wisconsin
Tuesday, December 06 at 12:06 PM

Apparently, someone needs a lesson in economics. With the passage of NAFTA, more companies (including GM, Ford and Daimler Chrysler) began to move factories to Latin America. By bringing more jobs to the area, they increased the number of opportunities available to workers who previously had little to no chance of gaining such a position.

If the labor pool remains relatively stable, as it did in Latin America after the passage of NAFTA, and more jobs are available, this drives up the competition for the best available labor and thus, increases wages for the people in those countries.

Simply put, the same amount of people are now competing for more and more available jobs, which means wages have to rise to attract and retain the best talent.

As for China-show me a Fortune 500 company that does not do substantial business with China. The great majority of the Fortune 500 have offices in China and intelligent companies take advantage of the brainpower and low cost labor available. If Wal-Mart was forced to pay more for its’ purchases, it would have to pass the increase on to consumers. A great many of Wal-Mart’s 140 million customers are in the lower income range and higher prices would hurt these people most.

Is this what you mean by “Buy American”? Increasing costs for basic necessities so much that the average American suffers?

When the oil companies raise prices (legitimately) you idiots accuse them of price gouging; when Wal-Mart LOWERS prices, you accuse them of wrongdoing. What is better? Higher or Lower?

I’m waiting for an answer on that and also waiting on an answer about whether or not union labor was used and union scale was paid on the anti-Wal-Mart film. I’ve seen what union people earn in the film industry and I would be shocked if this small time movie could afford to pay union scale. Maybe they did but they aren’t making any attempt to give us the information.

By the way, Wal-Mart spends more than $145 billion in the US and less than $20 billion in China. A huge difference, no? How much do GM, Ford and Daimler-Chrysler spend overseas? What about US Steel, which makes steel 3 times cheaper in formerly communist countries in Europe and then sells it in the US, tariff-free, for US market price?

What’s fair is fair.

Nick Yelanich in Monongahela, PA
Tuesday, December 06 at 12:29 PM

Nick - What you have to understand, is that these people, like Tom Boese are so stubborn and one-sided, that they wouldn’t know what is true, if you hit them over the head with it.  What you have stated was Economics 101, and should be very easy to understand, but, sadly, they don’t get it.  If you say “World Economy”, they chant “But American”.  If you say “Wal-Mart”, they say “Chinese slave labor”.  If you say anything at all, they will take the opposite side.  The term used to describe this behavior is called, “Being the Devil’s advocate”.  You will always be wrong and tney will always be right, no matter what you say.

Robert Springer in Springdale, Ar.
Tuesday, December 06 at 12:46 PM

You need to be a little more honest here Ellis (Nick). You really don’t give a rats ass about South American workers--what you care about is seeing your Randian economic theories put into practice.  Basically you want a master--servant kind of society which is more or less why you have such a infatuation with the elitism that sprang from her philosophy. These kind of trade deals fit perfectly within this kind of a worldview. And like the last two goofball presidents who have given us The Nafta and then the Cafta you come along with ‘it creates jobs’. What it has done is lose a whole hell of a lot of good paying jobs and replaced them with a whole hell of a lot of poorly paid jobs.

larry in elmira, ny
Tuesday, December 06 at 05:24 PM

Larry,

I’m afraid you will have to refer back to Robert’s posting. What was said was Econ. 101, not Ayn Rand. Rand had her views, but many were based on mathematically sound economic theory, not objectivism.

You may not like her philosophy, not many do--but you cannot disagree with the economics that was presented in her novels.

Don’t try to say that good paying jobs are replaced with poorly paying jobs. Have you been alive during the past twenty, fifty, seventy years? The jobs available here are higher paying, require less hours, and are less labor-intensive than they ever have been.

Sadly, not everyone has the life they wish they could have, but on the whole we are all better off than we were before.

You claim Ellis doesn’t care about South American workers. Do you care? Do you care about Chinese workers? If you did, you would support programs that create international trade. You would be glad that big corporations are bringing employment opportunities to those who would otherwise have fewer employment choices.

Nat Taggart in Provo, UT
Tuesday, December 06 at 06:08 PM

Tom,
Here is one piece of evidence that NAFTA is good:
http://www.cato.org/pub_display.php?pub_id=4074
It comes from the libertarian CATO Institute, but that shouldn’t stop you from looking over what they have to say.

There is more evidence that NAFTA is good, and there is plenty to suggest that CAFTA will also be very successful.

Driving down wages? Rep. Hilda Solis knows better than that.
To say it honestly, it’s taking advantage of lower wages. That’s a good thing for both consumers and the workers who receive the wages. Corporations can produce at much lower costs. And Central Americans suddenly have more jobs to choose from. Could you please explain how this is bad for North America or Central America?

Nat Taggart in Provo, UT
Tuesday, December 06 at 06:32 PM

Nick Yelanich writes:

‘If the labor pool remains relatively stable, as it did in Latin America after the passage of NAFTA, and more jobs are available, this drives up the competition for the best available labor and thus, increases wages for the people in those countries.

Simply put, the same amount of people are now competing for more and more available jobs, which means wages have to rise to attract and retain the best talent. “

What could be further from the truth Ellis! NAFTA has done more to cause inequalities amongst the peoples of Mexico and make Corporations richer. How is it that there are more than 13 million Illegals in this country, more than half of them because of NAFTA? Wages have not gone up! Wages have decreased more than 25% in the last 5 years. Poverty is on the rise in Mexico.

As for CAFTA, which is NAFTA with a C, the departure of thousands of American jobs will head further South at a more alarming rate as they have done under the passage of NAFTA. Many, if not most of the countries that make up Central America, are just as corrupt and have more than half of their populations living at or below the poverty line with little or no opportunity for higher education.

Thre number of jobs available? Worker’s Rights? Protection of the Enviornment? Higher wages? NAFTA has not brought that to Mexico. What makes people think CAFTA will do the same? The only ones to benifit truely fome these trade agreements are the Corporations and Governements in the affected countries. It won’t be the workers or consumers.

Kathy in Minnesota
Tuesday, December 06 at 11:48 PM

The thing most people fail to realize is this.  Change doesn’t happen overnight.  Those people think, ‘Oh NAFTA is now in place, it has been 2 days now, where’s the change?’.  Change is a slow process, look how long it has taken for Russia to change.  It is hard for a people who have done things certain ways for generations, to accept the changes.  But, the changes are happening.  People in Russia, are finally learning what this thing called democratcy is all about.  And, once they understand it, change becomes more rapid.  And, the people in Mexico and Central America will eventually get it and then the change will go forward.  China, will do the same, be patient.

Robert Springer in Springdale, Ar.
Wednesday, December 07 at 01:07 AM

tom sez: “As I and many others have already stated, both NAFTA and CAFTA are bad for America and bad for Central Amerca.  Neither one of these should have neen passed.”

Both are good for Americans, be they in the United States or in Central America. They increase our choices and options. Long after NAFTA has been in place, most Mexicans and “Yanquis” are in favor of it. The same thing will likely be true after CAFTA is up and running.

NAFTA and CAFTA open up more personal decisions for us. If you don’t like NAFTA, nothing is forcing you from buying from those evil Mexicans.

jc in
Wednesday, December 07 at 08:14 AM

jc wrote:

“Both [NAFTA and CAFTA] are good for Americans, be they in the United States or in Central America.

One of the big selling points of NAFTA was “opening up” markets for American goods thereby creating more jobs than would be lost by companies seeking cheap labor and lax environmental regulations in Mexico. The question then is: How many net jobs have been created for Americans to produce products for export to Mexico? I mean now that the “huge” Mexican consumer market is open to goods produced in the U.S. where is the corresponding huge positive impact for American workers? Paging Ross Perot....

MikeMc in Milwaukee,WI
Wednesday, December 07 at 10:22 AM

Sound Logic:

As an engineer I have learned that mathmatical equations are not worth the lead it took to lay them down on paper if they don’t represent reality.

The bottom line is that the American standared of living is being steadily eroded and our engineering and manufacturing capabilities are being lost to communist red china....which is our most dangerous and aggressive enemy on this planet.....as we will all soon see!

Van Ford in
Wednesday, December 07 at 10:37 AM

People like Robert and Lori make me almost happy a atseroid headed toward earth in 31yrs, will have a hundred times the power of Hiroshima, probably killing most of us. And good thing to because the world they want, I don’t want to live in any way. There are some things that are worse than death, and one of them is living in an unloving totalatrian monoplostic regime, built on slave labor and a worship of money . Good thing in the new economy noone will be able to afford health insurance or retire. By then Robert and Lori will have built “termination” centers next to the Wal-Maos when we are deemed “unproductive” and “high health costs”, so we can be burnt and converted into soap. Buy one get one free of course. There is absolutuely nothing sacred to those two.

Sandra Monday in
Wednesday, December 07 at 11:28 AM

Mkmc sez: “One of the big selling points of NAFTA was “opening up” markets for American goods thereby creating more jobs than would be lost by companies seeking cheap labor and lax environmental regulations in Mexico”

Yet, that is exactly what has happened. Since NAFTA, the number of employed Americans has grown, along with the number of “good jobs”.

Now, I know rules of causality, and I know very well that other factors could be in play, but the fact remains that the number of jobs overall and the number of good jobs has grown in the “NAFTA era”.

Sandra: You should write a book. It can go on the shelf with “The Coming Great Depression of 1985”, all those Y2K books, “The Population Bomb” and the articles from the mid 1970s about the new ice age.

jc in
Wednesday, December 07 at 11:36 AM

Geography lesson for Nat, who said: “Could you please explain how this is bad for North America or Central America? “

Central America is part of North America (just as Central Europe is part of Europe). There is no “or”.

jc in
Wednesday, December 07 at 11:38 AM

Sandra wrote:

“ And good thing to because the world they want, I don’t want to live in any way. “

So, are you saying that you wouldn’t want to live in a world that gets along, instead of fighting all the time?  A world where all people are on a level playing field?  A world where all people are making about the same wages and have about the same benefits?  A world where people trade with each other in a civil manner?

Alarmists like you have been around for centuries, there is nothing new in what you say.  McCarthy warned about the ‘red menace’ sweeping America.  People warned that the American Economy would be destroyed if we traded with Japan.  Every year, I hear “The End Is Near”, shouted by people who believe that that last earthquake signaled the ‘End of Times’.  Look at how people used to talk about Russia and how they were going to destroy America with their Nukes, now, guess what, they are our friends.  Now, it is China that is the ‘boogie man’!!  Can anyone tell me why they would want to bite the hand that feeds them?  Imports from the U.S. are helping to build up their economy, why would they want to destroy that?

Guess there will always be people who choose to see a dark side to everything.  After all, that asteroid is coming and so are all those ‘little green men’!!

Robert Springer in Springdale, Ar.
Wednesday, December 07 at 12:29 PM

Sorry, I meant to say “Exports to” the U.S., not “Imports from”.

Robert Springer in Springdale, Ar.
Wednesday, December 07 at 12:33 PM

For Nat---What do you mean I cannot disagree with Ayn Rand’s theories? Of course I can. IMO the problem with all of those who are so swept away with any kind of theory is that they come to believe there is only one way to make things work. What we have now in our country whether you like all the components (such as what some critics might called barely disguised socialistic programs or standards as Social Security, Medicare, the minimum wage and any of the other social protections in place to protect at least the bulk of the population) or not even under the guidance of the incompetent and misguided present administration in Washington is still working albeit coughing and sputtering somewhat. This is a mixture that is not just capitalism for capitalism’s sake but is meant to be a marriage between capitalism and the democratic will of the people and so along comes Social Security etc. etc. and it has proven too bad for those politicians or those people in big business that don’t want it. There you will see people who are actually paying attention to what is going on because it very directly effects them. They all want to retire some day. They all want to be able to go into the hospital if they need to for a week and get the attention that they need and not have to lose their house for it. Unfortunately the same cannot be said for their interest in their neighbor or their neighbor’s job all the time.
Trade deals tend to be boring to them. A good many of them just don’t want to know and a good many of them well just say ‘yeah I think it’s good’ thinking that it can’t be that bad if the guy in the oval office that I voted for says it’s good. So our system here whether you construe it as capitalism or not is in my view a hodgepodge of different kinds of economic thought.

larry in elmira, ny
Wednesday, December 07 at 01:29 PM

Hey the asteroid thing is true, it was on the mainstream morning news, check it out yourself. It’s the scientists that are shitting thier pants about it. Personally at this point I could care less.
I meant what I said if those two represent humanity, then it may be a good thing for humanity to end all together. It would be like eliminating a cancer on the planet. The asteroid is bigger than our own moon, so think about what kind of impact that could have, if we don’t have the technology to stop it by then.

How come no hispanic people have stuck up for Nafta on this blog? Or Cafta? I guess you tighty righty whites think you know what’s good for all the brown people of the earth, well if that were true the left wing wouldn’t be gaining such a hold in places like Venezuela.  I know you wish you could go back to the pre-slavery days Lori, and through China in a way you have, but slaves and servant classess have a nasty way of revolting.
Like the poor in the french revolution, guillotines for the Waltons anyone?

Sandra Monday in
Wednesday, December 07 at 03:08 PM

jc Says

“Sandra: You should write a book. It can go on the shelf with “The Coming Great Depression of 1985”, all those Y2K books, “The Population Bomb” and the articles from the mid 1970s about the new ice age. “

Even if they were wrong at least those people had creative imagination, unlike you who strikes me as an extremely boring neo-con white guy type. Why don’t you write a poem?
Oh wait someone liek you would have no ability for that kind of abstract thought, that’s why you have the bad taste to shop at Wal-Mao

Sandra Monday in
Wednesday, December 07 at 03:13 PM

sandra sez: “Even if they were wrong at least those people had creative imagination”

It does not take much imagination to write one of those “the sky is falling 3 years from now” Chicken Little books.

Aside from the racism in your two comments, Sandra, how is it that I meet the definition of a neo-con?

Am I a former liberal with love for European social democrats? That was the definition of “neo-con” that was posted.

sandra sez: “well if that were true the left wing wouldn’t be gaining such a hold in places like Venezuela”

Is that really your kind of left wing? Hugo Chavez has been attempting to outlaw labor unions in Venezeula. What good is the left wing if it “gains” through the success of banana republic dictators in their attempts to gain power while crushing democracy and dissent?

Or perhaps a dictatorship like the one Chavez is building would solve the whole debate once and for all as it outlaws private enterprise (no Wal-Mart) while it also outlaws labor activists (no unions)

jc in
Wednesday, December 07 at 03:25 PM

Check your facts JC the war on drugs was really an excuse to send death squads down to South America to squash any fledgling democracies down there, the South Americans are finally getting wise to our tricks and they don’t want to end up just darkies picking cotton on our plantation like the poor Chinese. OUR GOVERNMENT even had NUNS AND MISSIONARIES SLAUGHTERED if we thought what they were doing wasn’t in US interest...but then I know a white guy like you would understand how we have to exploit the brown people of the world. Good for whitey.

Sandra Monday in
Wednesday, December 07 at 03:50 PM

sandra sez: “Check your facts JC the war on drugs was really an excuse to send death squads down to South America to squash any fledgling democracies down there”

....which has everything to do with Colombia and nothing to do with Venezuela. Admit it: you probably did not even know howt to spell Colombia.

sandra sez: “just darkies picking cotton on “

What was that you said? The pointy-topped white sheets and mask you are wearing muffled your voice.

sandra sez: (racist babble racists babble).

Whatever.

jc in
Wednesday, December 07 at 04:43 PM

Did you know that August IV here in St. Louis had previously, and by that I mean .... say 5 years ago, poo pooed a big expansion project at the Brewery.  This is very curious as the same project planned to be built here was built in Houston and Virginia.

Probably would have amounted to 1.5 million effort hours of construction.  What says the population?

John G in St. Louis, MO
Wednesday, December 07 at 09:55 PM

Wow JC you almost reached an eigth grade level with those insults!

Sandra Monday in
Wednesday, December 07 at 11:12 PM

Sandra wrote:

“ How come no hispanic people have stuck up for Nafta on this blog? Or Cafta?”

That’s a good question now isn’t it?  But, come to think about it, how come they haven’t come out againt it?  Usually the people who complain first are the ones who don’t like something, the ones for it usually don’t say much when they win.

Robert Springer in Springdale, Ar.
Thursday, December 08 at 12:40 AM

Check it out...I went to ufcw.org and bought an official “UCFW” rally shirt everyday union low price of $6.99 *plus a 20% union fee,,,kidding).  Made in China..at least that’s what the tag said.  I’m so confused.

Mark in
Thursday, December 08 at 01:39 AM

Maybe they are too busy working two jobs because they had to leave thier country to come here because thier country, was further economically devastated by Nafta while you white right wingers discuss what you think is good for them, when you actually have no idea.

Sandra Monday in
Thursday, December 08 at 07:15 AM

If you look at the actual trends, the illegal immigration rate from Mexico has been on a steady rise for decades. The implimentation of NAFTA has not affected the illegal immigration trend line.

NAFTA gives people more of a choice to decide what is good for them. It is not “right-wingers”. Remember, NAFTA was passed with support from both the left and right wing (despite fringe exceptions on the right such as Pat Buchanan and on the left such as Ralph Nader).

The racism you present in many messages, including this last one of yours, is annoying, not true, and detracts from your own arguments more than anything.

jc in
Thursday, December 08 at 11:38 AM

Hey your the ones that are pro-slavery, not me

Yee haw!

Hey everyone join Lori, Roberts, Jc and others “WE LOVE SLAVERY CLUB” all you have to do is think that people in poor countries have no right to anything and have a bloated pathological sense of entitlement!

If you miss the old days of slavery don’t despair, Wal-Mao is there! Helping the south rise again!
So screw over a chinese slave today by buying everything at Wal-Mao, if you hate LOVE, TRUTH, BEAUTY etc, Wal-Mao is the store for you!
If your hugely fat and work at a T.V. station, and live in MIssissippi we have store stocked well by the lowly brown people of the earth just for you!

So take advantage of our SLAVERY SALE today!

Sandra Monday in
Thursday, December 08 at 12:31 PM

Sandra---
Can you clarify something for me---
when you say “thier” is that just your low education speaking or do you mean “their” please learn to spell
all your posts have the some “typo”

Kim in illinois
Thursday, December 08 at 01:27 PM

oooh Kim that hurts attack the grammar instead of the satire in the message

thier there they all’ who the *&%$# cares anyway?

I’m a published poet so I’ll take my liscense to say misspell whatever the *&%$# I want

By your message I can tell you are probably a figid woman.

Hey everyone Kim is joining the “I LOVE SLAVERY” club please give her the complimetary red communist Chinese flag and customized brown shirt. We’ll also present her with one free asian"house boy” . The Wal-Mao RFID tag can be found on his forehead or on his right hand.

Enjoy your free gifts KIM!

And thanks for keeping SLAVERY legal!

Sandra Monday in
Thursday, December 08 at 03:16 PM

Robert Springer are you the real CEO of WM?

Sandra Monday are you really a bully?

Kim in Illinois...love your state!

Caroline Outloud in Chicago
Friday, December 09 at 11:51 AM

Hopefully I can provide some specific information on the effects of Wal-Mart at supplier facilities whether they be in China or Nicaragua.  Unfortunately the same systemic abuse and complete disregard for human and environmental rights exists. 

I have brought workers from various countries to the US to speak in different cities in the US about what its like to produce products for Wal-Mart.  As you can imagine they comment on the wages, conditions, and diescrimination but also recognize that their interests are ignored by large trade agreements such as CAFTA & NAFTA. 

These workers are being paid obscenely low wages because Wal-Mart forces their suppliers to accept orders at unprecedented low prices.  In addition Wal-Mart demands unrealistic delivery requirements.  Because of Wal-Mart ‘s enormous market share they have the ability to demand these things.  Its fine to continue to talk about trade policies in the abstract but I encourage you to think about the people behind the product next time you go into a Wal-Mart because it is their children that are also suffering from the effects of the Walmartization of the world market.

For more information about Wal-Mart sweatshops, visit www.LaborRights.org.

Lastly, I challenge each person on this blog to buy one thing during this holiday season that is union made, worker owned cooperative made or fair trade certified.  You can find out more about decent companies at http://www.sweatshopwatch.org/index.php?s=59.

Trina Tocco in Washington, DC
Saturday, December 17 at 11:52 PM

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