Free Markets, Wal-Mart, Over Regulation; What an interesting concept?

Unions are angry at the high salary of the executives which have gotten a little out of line especially as the companies are laying off workers and the company is not making a profit. However, a man should put in an honest day for that which he was hired and that does not mean just showing up and punching the clock but actually providing some real work and productivity.

Traveling the country we see closed factories, boarded up small businesses which made money selling goods and services to those workers, now downtown is a ghost town, the mills are closed and many people have left, the ones remaining have gone on the public dole and get a small government check each month. Who has won? This is what people are saying who are against free trade. But in free trade all things being equal everyone should do just fine.

Another issue is the imbalance of money flow and trade deficit issues where our money flows out and does not circulate here, meaning people have less of it. Think of it this way. A Wal-Mart goes into a small town which is a hub for five other towns, the towns try to keep it out, so it goes to the outside of town and no city gets the sales tax revenue share. Then the small businesses, which compete for things that Wal-Mart sells cannot stay in business, so the employees are forced to go to work at Wal-Mart. Then people buy from Wal-mart at lower costs due to economies of scale. Wal-Mart also uses a number of other strategies such as slow pay to vendors exercising their control on the float of money payments outward. Do not blame Wal-Mart; Sears, Dell and many other large corporations have been doing this for decades and are getting better at it every day. On a micro scale if you can call those businesses micro. After all Wal-Mart is 10% of our countries GDP and is China’s seventh largest trading partner. It employs the most people of any company on the Planet and even more than the US Government. What is being done is the same as the strategies of those trading partners, which hold up transactional flow of payments.

Wal-Mart is able to get the labor and pay less by adding benefits again due to economies of scale that small companies cannot. It would not matter anyway because small companies cannot compete on price without massive co-ops or a franchise system, which passes on the savings of those economies of scale to their franchisees. Usually in a franchise which runs more like that of a governmental structure adds on costs for the economies of scale buying and passes it onto the franchisees by taking out the money in the flow. Some might be critical of this because the franchisees best interests are not in mind and therefore their actual success against big box stores like Wal-Mart is hampered. After all Wal-mart changes oil, sells fuel, has a bank inside, restaurant, QSR-Quick Service Restaurant, develops film, has a garden center, etc.

Now then you understand why Wal-Mart keeps growing and why Sam Walton was a brilliant man, basically he studied what worked, the competition, the flows, cycles, frequencies, etc. and of course there in Bentonville he collected all the data and duplicated it over and over again. Who wins? Every consumer that shops there; Sam Walton also said that he would always purchase American products first provided that they had equal quality and price. Good for him? So then this will employ America while feeding America right? Well sure enough, how could it not? It works, a complete closed loop. Employing and supplying like Henry ford use to say, we want to pay our workers enough so they will buy our cars; we do not need a union. A noble effort and idea shared by the wise.

Fortunately Sam Walton kept his promise to the American People and unfortunately the government, legal system and unions did not keep their promises. The government attacked businesses and over regulated them. The attorneys used this to get a double whammy suing class action on top of governmental regulatory fines which were under the impression that the should fine the same amount as the costs of their budgets to the businesses they regulated. Meaning even if the business broke no rules, they would have to find something to justify the existence of the created bureaucracy. Go read the book; “The Business End of Government” By Smoot. “Fountain Head” and “Atlas Shrugged” by Ayn Rand. Read this while you are at it.

Another recent book is: “The Case Against Lawyers” By Catherine Crier. By the way Catherine; excellent book if you ever happen across this page on a search engine, I want you to know I mean that. Also to illustrate my point I recommend and this one will make you as angry as Smoot’s book, but it is correct and it is a shame for America: “Death of Common Sense: How Laws are Suffocating America” By Philip K. Howard. What is shown in this book clearly is not what was intended by our founding fathers.

Recently on C-SPAN, there were two gentlemen debating free trade one from the CATO Institute for free trade. Yet he failed to mention the real problem, the lawyers, over regulation and government bureaucracy. I had to call in and enlighten them on the issues and what is really going on, they seem to be under the impression that Americans did not want to work in manufacturing jobs? What on Earth was he thinking?

“Lance Winslow” – If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

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