Bad Days for Wal-Mart Americans
The retail giant encounters the everyday low politics of secular stagnation.
PHOTO: AFP/GETTY IMAGES
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District of Columbia officials are hopping mad. They agreed to allow (note the verb) Wal-Mart to open three stores in the city’s more affluent areas. Now Wal-Mart has decided not to build two additional supercenters promised for poorer neighborhoods.
Wal-Mart, in its biggest store closing ever, said last week it would shut 154 U.S. stores this month. It’s a place to start for anybody collecting gloom about the U.S. economy, especially the economy that low-wage workers and consumers inhabit.
Facing additional headwinds were the long-planned D.C. stores, and not just due to the regulatory hurdles and lobbying fees the company endured before being permitted to enter the market. Since then, a ballot measure seeks to boost the local minimum wage to $15 from $11.50, and the city has proposed legislation to mandate minimum hours for part-time workers and impose new family- and medical-leave requirements.
So Wal-Mart told city officials that the stores couldn’t be profitable and it was nixing them.
To the politicians who serve as gatekeepers to opportunity, which first requires erecting obstacles to opportunity, the company has become unfit for citizenship in their republic of rent-seeking. “I’m blood mad,” Mayor Muriel E. Bowser told a news conference. “This is devastating and disrespectful to the residents of the East End of the District of Columbia,” former Mayor Vincent Gray told the Washington Post.
The proverbial Martian would wonder why politicians are surprised by a shortage of jobs for their constituents, when they continually promote policies that drive jobs away.
President Obama has lately taken up the call against state and local occupational licensing, a job-killing protection for vested interests. Yet his administration is being sued for blocking the Keystone XL pipeline, which would have created high-paying construction and refining jobs.
In theory his administration recognizes the need for tax reform to correct the huge disincentive to U.S. companies to bring home their foreign earnings, which can then be reinvested. Yet most of his administration’s daily activities increase the determination of U.S. companies to move their headquarters offshore in search of tax codes more congenial to investment, employment and growth.
Over the weekend, a professional money manager—i.e., paid by clients to decide where their money will be invested and create jobs—told Barron’s: “We can’t change demographics. We should restructure debt, reduce regulation, and pursue sounder policies. But none of these issues is being discussed or addressed. That’s why secular stagnation will linger.”
Donald Trump is not right that our politicians are stupid or incompetent. They are very competent at being politicians. Their risk of being long-term unemployed is very low.
There is no politician, or very few, who doesn’t realize that raising the costs of business, via taxes and regulation, reduces jobs and opportunity for citizens. Politicians understand this idea very well, so explaining this idea to them won’t change their behavior.
Nor is Mr. Trump the mold-breaker his fans imagine. His plans, as far as he has chosen to announce any, would solve no problem. It doesn’t matter what you think of China’s currency policy or Mexican migration. These aren’t central to America’s well-being.
More than just about any country in the world, America’s well-being is determined by the incentives we allow our domestic citizens to work, save, invest and start businesses. Mr. Trump just offers a different kind of handwaving from that offered by Hillary Clintonand Bernie Sanders, with their insistence, congenial to another part of the electorate, that more government spending and regulation can fix everything.
But it’s also true that if any country can withstand the tidal wave of default that’s coming from overseas, the U.S. is that country. We have the huge domestic market and the enterprising people—if we are willing to make relatively modest reforms.
Ted Cruz is off-putting. His slur against New York City (which is an intellectual nerve center of American conservatism, and has been for half a century) is unjustified.
And yet one of the campaign’s better moments was his ironically meant apology to New York last Thursday, in which he enumerated the regulatory and tax policies that keep 99.45% of the land area of the Empire State an economic wasteland compared with next-door Pennsylvania.
Mr. Obama spent much of his State of the Union address insisting that the U.S. is not a failing state. He’s right: Anyone would rather have our problems than Europe’s or Japan’s or China’s. Looking at our political leadership, though, you wouldn’t say we’ve done much lately to earn our luck.
