Recent Items

More on Devolution and the Walmartization of Our Economy

Posted on by

A couple of months ago, I wrote about devolution:

It’s become fashionable to discuss the creeping decay in advanced economies, particularly the US, both in term of third worldification and end of empire. The more apocalyptic turn to theories of collapse from writers like Jared Diamond and Jacques Tainter. But I think they miss one aspect that may prove to be important, that of how the pursuit of efficiency doesn’t always produce net gains, as economic theory might tell us. The measure of productivity, more stuff per unit input, misses how service/product quality can deteriorate. Some of this is deliberate: I have readers in comments regularly lament how old durable goods and tools were more reliable and lasted longer than contemporary versions. But there are other aspects of the downside of the willy-nilly pursuit of efficiency that have become so routine we accept these indignities and often don’t recognize them (unlike other ones that remain annoying years after the change, such as the widespread implementation of call routing and prompts in place of humans answering phones).

The most stunning recent example has proven to be Walmart. The company that McKinsey tagged as the biggest contributor to productivity gains in the 1990s (through both its own efforts and that of copy cats) has become a one-trick pony. It appears that its answer to every competitive challenge is to cut costs further. It has gone way beyond the point of maximum advantage as a result. It is losing customers to Costco and Target because it has cut staffing so far that even bargain hunting customers find checkout lines to be intolerably long; they’d rather pay a smidge more to be spared the nuisance. And even worse, they can’t even keep shelves stocked, and other customers leave in frustration. From Bloomberg:

Margaret Hancock has long considered the local Wal-Mart Stores Inc. (WMT) superstore her one- stop shopping destination. No longer.

During recent visits, the retired accountant from Newark, Delaware, says she failed to find more than a dozen basic items, including certain types of face cream, cold medicine, bandages, mouthwash, hangers, lamps and fabrics.
The cosmetics section “looked like someone raided it,” said Hancock, 63…

“If it’s not on the shelf, I can’t buy it,” she said. “You hate to see a company self-destruct, but there are other places to go.”

It’s not as though the merchandise isn’t there. It’s piling up in aisles and in the back of stores because Wal-Mart doesn’t have enough bodies to restock the shelves, according to interviews with store workers. In the past five years, the world’s largest retailer added 455 U.S. Wal-Mart stores, a 13 percent increase, according to filings and the company’s website. In the same period, its total U.S. workforce, which includes Sam’s Club employees, dropped by about 20,000, or 1.4 percent. Wal-Mart employs about 1.4 million U.S. workers.

And also last week, Lambert sighted a simply deranged Walmart cost saving scheme:

And not the parasitic business model, or the sexist supervisors, or union busting and beating the workers down to the ground, or the depressing stores, the empty shelves, or the shoddy goods. No, management’s gone completely round the twist:

Wal-Mart Stores Inc is considering a radical plan to have store customers deliver packages to online buyers, a new twist on speedier delivery services that the company hopes will enable it to better compete with Amazon.com Inc.

Wal-Mart is making a big push to ship online orders directly from stores, hoping to cut transportation costs and gain an edge over Amazon and other online retailers, which have no physical store locations. Wal-Mart does this at 25 stores currently, but plans to double that to 50 this year and could expand the program to hundreds of stores in the future.

“This is at the brain-storming stage, but it’s possible in a year or two,” said Jeff McAllister, senior vice president of Walmart U.S. innovations.

“I see a path to where this is crowd-sourced,” Joel Anderson, chief executive of Walmart.com in the United States, said in a recent interview with Reuters.

Can anybody who isn’t a CEO and doesn’t live in a gated community or a penthouse suite see the problem here?

So, I order next month’s case of frank ‘n’ beans online from Walmart, and the next day some meth freak in a pickup — to carry the beans! — shows up at my door, to case the house for copper piping? No thanks.

Now it may just be a bad side effect of the spring equinox, but I’ve also seen a marked decay in the performance of some of the itty bitty number of service providers I use, an ugly combination of screwups plus ‘tude rather than abject apologies and corrections (One of the rules of perception of the quality of service, at least per some McKinsey work years ago that likely still holds true, is that the perception of service quality is not a function of how many mistakes take place, but how the vendor handles mistakes). And although there are (thank God) some exceptions, I can find other examples without thinking too hard. For instance, the high end cleaner I use for my fancy duds (on those rare occasions when I need to go shopping in my closet) isn’t at all what it used to be. And what is the deal with restaurants? I don’t eat on the high side even remotely as often as I used to, but I get taken out a few times a year to Serious Foodie places, and I have to say I had more thrilling meals at the top spots in the 1980s, and a lot of places in the non-expense account tier that were memorable. And this in our era of heirloom tomatoes, day boat lobster, and all things organic.

You tell me. Have I just had a run of bad luck or do you think services are not what they used to be?

Print Friendly
Twitter44DiggReddit49StumbleUpon0Facebook39LinkedIn0Google+3bufferEmail

217 comments

  1. Nathanael

    Oh, there are good services out there, but they’re now a niche product and you have to fight to find them. The average service has declined horrifically in quality, yes.

  2. Mary Bess

    Why shop at WalMart when there is an alternative like Costco? Better prices, better customer service, better benefits for employees.

    1. Richard Kline

      I am not convinced that Walmart’s staffing decline is primarily about ‘cutting costs,’ if about that at all. It is about eliminating staff in the face of nascent unionization. Get rid of those ingrate serfs. Do everything possible to have everybody part time. Make the work environoment sufficiently unsatisfying that employees simply leave rather than force better conditions. This is the hidden meaning in the otherwise loony toons sudden push to ‘move online,’ that Wal,art wants to get its order stream away from the hands of those ingrate serf-employees.

      I am entirely serious in raising this possibility. Walmart had a look at the future with the pre-Christmas union activism of 2012—and the higher ups are both livid and terrified. Walmart’s initial extraordinarily high margins were at first due to supply chain efficiences; others have matched those since. Then those margins were supported by pillaging suppliers; there’s a limit to that. Walmart’s margins have _always_ been about keeping half of the money that should be going to employees in any other retail business and stuffing it in stockholders’ pockets. And now, a pinch there is a serious possibility. If Walmart’s margins decline, the company can still be ‘profitable’ and a force (like it or not), but the stock price will settle well south of where it is now. And that hurts the Walmart princelings and princesses where they live. So the mandate has come down to ‘get rid of those employees at every possible turn’ and ‘get our customers online NOW!’ It doesn’t help that the demographic which shops at Walmart is truly tapped out as of 2013, having seen no recovery since the crash (for them/us, it WAS a crash).

      Decision makers can and do go nuts when their perceived entitlements or ‘company worldview’ is threatened. It is crazy for Walmart to destroy their customer service and customer relationship by _deliberately_ understaffing their stores, but from the wealth-altitude of the princesses it is NOT crazy: it is imperative to their way of life. It is CRAZY for Walmart to come out of some boardroom braimstorming [sic] session over the winter declaring “We’re going online” with no prior planning of any kind, let alone the planning, hiring, platform development, and customer preparation which a successful launch would absolutely entail. Hence utter madness like ‘let some stranger leave our store with your goods.’

      Walmart has seen the peasants agitating, and the princesses have gone batshit. I mean the employees of Walmart no ill-will when I say that a BK of Walmart would be a public good, and if the kind of thinking evident in Walmart’s palpitations this year continue the company will set fire to itself in that kind of fashion. A reputation of ‘inferior store’ is very hard to shake once the public gets it. And Walmart has little or no public good will to fall back on, ‘everything cheap now’ has been their only cachet from Day 1.

      1. Heron

        Agreed. What makes it even crazier is the fact that their core customer base, the working poor, are the sector of US society least likely to be well integrated into internet culture. Lacking good internet connections(in no small part because of the private sector’s insistence on its “efficient” monetization and preventing its treatment as a public utility, which in turn has prevented needed infastructure upgrades that would increase performance and decrease price), they also lack the anti-malware and anti-phishing programs a user needs to be able to shop online without risking their personal information. Even if the working poor had the devices needed for internet shopping, which they don’t, and even if they felt comfortable buying things online, which they don’t, for them to continue to do so they’d need assurances of the security of both their credit and their identity information, which -again- they don’t have. This is almost as stupid as Walmart’s plan from 3-4 years ago to re-brand as high-end.

        1. scott

          I expected more from Wal-Mart. Don’t they know that banking and providing health care are the paths to guaranteed profits? WMT has a captive audience for banking services, and can use their supply chain to provide health products cheaper than anyone else. The problem is getting nurses and doctors to work for $7/hour and 29 hours a week.

          1. Heron

            It’s funny that you mention that because back in 2008 Walmart started making a big push to get into provision of healthcare; attempting to include both dentistry and general clinics in thier superstore locations. I’m not sure if they ran with that program or discontinued it when it became obvious Obama didn’t actually intend to push a real reform of our healthcare system(I haven’t been in a Walmart in almost a decade), but for a while there Walmart was genuinely trying to apply its cost-cutting measures to medical services.

          2. jrs

            The thing is medical services desperately needs cost cutting even it’s from the likes of Walmart.

            As for banking, Walmart has made many attempts at that market (or at least the unbanked market). Only what they have made bids on are true banking services, transactional payment systems and so on. They aren’t yet into betting with depositors money on real estate and derivatives.

      2. Richard Kline

        And consider _this_ one on the ‘random customer deliver’ scheme: Schlub X takes your crate of TP into their vehicle having agreed to deliver it, exits WMT’s parking lot, drives over a small child, totals their car, and ends up in the hospital with a back injury? Who is liable?

        I’m betting Walmart will have ultra-hidden, invisible ink print saying that delivery is an ‘agreement between deliverer and recipient,’ in which case _YOU_ are liable, Mr./Mrs. Homer Deliver Sucker. Failing that ultra-secret ink, or the simple inability to get both the deliverer and recipient to document the transfer of liablity, then WMT can expect ambulance chasers to start chewing up their trouser cuffs.

        That idea is soooo nuts, we can’t even begin to scratch the surface.

        And Walmart as high-end, *hah-hah-hah* I’d managed to forget THAT one. Walmart should be so lucky as to have their online pipe dream disappear so quickly.

        1. mk

          No doubt Walmart can get a Walmart Protection Act rider included for the next “spending bill to avert a government shutdown” routine, to block any lawsuits from people harmed by Walmart’s actions, just like Monsanto.

        2. PaulHarveyOswald

          er, assuming the driver intends to actually deliver the stuff. Next idea: have the employees deliver the stuff on their way home. If the delivery is not made, then it’s considered stolen. How they get the boxes on the bus is their problem…

        3. steve dean

          This is not the first time crowdsurfing has been tried in delivery.

          One of the big problems is regulations in many large cities require deliveries only by licensed individuals.

        4. nonclassical

          …wife is nurse in Berlin, Germany…where healthCARE (as opposed to healthPROFIT) costs 20% that in Ameri”K”a, and covers all…”K-$treet”..

      3. Clive

        @Richard Kline, I also agree totally. I’ve witnessed several outsourcing and offshore initiatives which were questions at the time of implementation even by those in senior management positions but the c-suite pushed them through. Even when the outcomes were the (as predicted) less than stellar in terms of the real-world cost savings not to mention (referring back to the original piece) woeful quality declines, there was no reversal of strategy.

        Yes, something else was definitely at work. A latter day equivalent of crushing the faces of the proletariat into the ground. The collateral damage to operations was so bad, so another altogether different imperative must have been at work in the minds of those proffering such “improvements”.

        1. Richard Kline

          People aren’t rational, Clive; including business people. We forget this all the time. _Rationality is the exception._ The motives for much of the off-shoring are very much class based, ideology based, and politically based. Those at the very, very top of the decision chain sense this, but they are sitting sufficiently pretty that they have little concern with organizational damage: if things go sour, they’ll dump/loot the organization and move on to another. They have no stake in oranizational survival, but they do have immense stake in entrenching class position. That’s what oligarchy is all about.

          We should NEVER assume that business decisions are purely rational calculations. Illusions and dreams are everywhere before us in disproof of that.

          1. Eric Patton

            No, people ARE rational. The capitalist class is very rationally seeking to defend its class privileges, as the remainder of your paragraph shows.

            People make rational decisions based on the circumstances in which they find themselves. If one doesn’t understand another’s decision, it’s because one doesn’t adequately understand another’s circumstances.

          2. Heretic

            Richard, you are confusing rationality with values. The top 1% are very rationale in pursuing their goals, which are maximum wealth and power for themselves, and nothing for everyone else. Continued outsourcing, wage cuts, automation, and free trade destroy labour’s bargaining position; special lobbying groups opposed to taxation, universal education and medicare, (and other forms of people friendly government spending) and support for more free trade are effective at limiting a governments ability to respond to the people’s needs and rectify the worsening position of labour. And they have a perfected cultural propaganda; the talk of rugged individualism and the frontiersman myth, all the glory surrounding the ‘self-made men’ like Steve Jobs and Bill Gates, …The governemnt is the problem, not the solution” Through the multi-pronged attack they have solidified their control over the economy; instilling fear and subservience in the masses to their employers, while sowing distrust among the people and between the people and the government. It is an extremely rationale and farsighted plan.

            They have been very successful so far. But the outcome has been much misery and distress for the 99%. It also shows that the 1% and their servants have very well devloped brains, but they lack a human heart.

          3. from Mexico

            “Rational” is one of those words like liberal, conservative, Marxist, or Keynesian. It’s been so bastardized and has so many different meanings to so many different people that it has become all but meaningless.

        2. digi_owl

          What you need to take into account is the rise in share price an outsourcing announcement can produce (or can be expected to produce, that then end up producing it because everyone and their dog jumps in to buy in the hops of selling again to the latecomers).

          Long term customer retention and quality have been sacrificed on the jagged graph of the share price.

          1. Jim

            It could be the case that once our society (in both the public and private sectors) comes to be viewed as an object of administration—where efficiency, predictability, calculability and control become predominant then we, as individuals, encased within such a structure often tend ourselves to become ethically blind and are often easily viewed by our controllers as redundant.

            Weber used his famous metaphor of the iron cage( or what he described as the irrationality of rationality) to show how public institutions tend to become dehumanized.

            Weber stated:

            “Bureaucratization offers above all the optimum possibility for carrying through the principle of specializing administrative functions according to purely objective considerations…a discharge of business according to calculable rules and without regard for persons.”

            The large corporate bureaucracies like Walmart also seem to have created their own private sector iron cages (exemplifying the irrationality of rationality) when they take efficiency, predictability, calculability and control over the edge– resulting in irrationality– or a deterioration in service, product quality, employee motivation and the potential eventual destruction of their own business model.

            The end result for our society is a tiny upper caste of controllers (in both the public and private sectors) gradually losing touch with reality.

          2. nonclassical

            for “from Mexico”, in imperfect recompense for so many lucid offerings:

            The word “rational” is an abstraction, as is much of western language; when we compare western and asian language, we find asian to be PICTOGRAM of an ACTION-action denoting “meaning” or “value”. In any case, it is the ACTION of “rational” behavior that must precede any “concept” of rational…

            much western language suffers said paradox..

        3. Moneta

          The reality is that a large percentage of people lack empathy.

          And when I say empathy, I mean the ability to put oneself in somebody else’s shoes and feel their life from their point of view.

          As long as many don’t have that skill, l’enfer c’est les autres.

      4. cwaltz

        A third option could also be that the “serfs” are getting wise. Perhaps today’s kids aren’t anxious to work for an employer that pays the bare minimum and expects you to adjust your life for that bare minimum and do it with a big ol’ Walmart cheer to boot. Walmart may just be asking for too much with toolittle being offered in exchange.

        I actually worked there for 3 very long years. The amount of things they have automated vs.individualized is absurd. The temperature controls for stores are at the home office. A percentage of the products that are sent to each store is determined by home office. A computer program generates a report for the last years sales that is utilized to determine staffing. That being said, the management team LOVES using that as excuse to push things down the throat of employees. A la want us to guarantee you hours? Open your availability so we can use you whenever we feel like it. Spoke to a friend last week who told me she was informed “the computer” no longer recognized her regularly scheduled hours, so she’d need to open her availability if she still wanted full time hours.

        1. sgt_doom

          I fully agree with your comments, but please allow me to add some further opinions: Amazon did raid the “best” people from Wal-Mart (best as in predatory capitalists experienced with slave labor).

          Also, the vast majority of American “businesses” today only know three things: (1) producing junk paper (derivative instruments based upon layers of endless debt; (2) offshoring of jobs; and, (3) importing of foreign visa scab workers.

      5. casino implosion

        It’s a well known fact that these operations like Walmart and the Amazon warehouses aim for extremely high employee turnover. They want you to work there for a little while and then just give up and quit.

      6. nonclassical

        “Online” is where fundamentalists wish to push education…having already disenfranchised public ed. by moving to charter schools…it’s 2 steps to end of teachers’ messy version of history, unions, government involved in education,
        state retirement-pensions, etc, etc…it’s public and private sector…Toffler’s,
        “Power Shift”…

      7. different clue

        If Walmart’s entire multi-million person customer base shifted over the next few years to other stores, could those other stores hire enough people to handle the extra millions of customers to equal the people losing jobs as Walmart goes extinct from steady loss of bussiness? Might the other stores even hire the very Walmart ex-workers as they follow the customers to the other stores?

    2. Dan Hartung

      There are 600 Costco stores versus some 9000 Walmart stores — that’s an order of magnitude in difference, basically. Costco is better compared to Sams Club (also about 600 stores) in any case. I don’t have a Costco within 32 miles, but I have twelve Walmart stores that close.

      1. Richard Kline

        So Dan, this is one of the many reasons that Walmart isn’t going away any time soon. They could halve their store numbers, and still be profitble and a major player. They have a large base of one-store smaller towns too which are essentially captive; not profitable for a competitor to even try to open and too far of a commute for the locals to go anywhere else. Walmart could try five strategies, fail at all of them, reorganize through BK, _and_ be forced to unionize, and could still be around with 5000-6000 relatively profitable stores.

        But the inverse point is that the grows phase for Walmart in the US is over, they’ve saturated the retail environment for their kind of store. That will put downward pressure on profitability in the US. In RTW, there’s many possibilities for exploitation however.

    3. mac

      I had a pleasant experience at Walmart recently, I was looking for sugar free popsicles and the spot was employ. There was a manager/ supervisor close by and I complained of empty shelves, this man went and got a box of popsicles for me and tracked me down at a check out.
      I thanked him and told him that was great customer service.

      1. gepay

        I found shopping at Walmart after midnight to be ok. There are people stocking shelves that know where everything is. Maybe this is snobbish but I find most Walmart shoppers scary in the sense that it seems a majority of them are obese and dumb. Makes me worry about the future. After midnight they are gone.
        But really, I used to like the small town hardware store – the medium sized clothing store – the sporting goods store etc. who cares if I paid 50c more.

  3. Clive

    Yep, agree 100% with the analysis in this feature. The big supermarkets are a barometer of this trend to over optimisation. It would be interesting to get input from non US readers, especially Latin America and Europe. Everyone has to go to the market and because they are a commodity operation (and they are the same basic service offer) you can get a good read-across for whether this is just a US phenomenon or whether — and this is my suspicion — it’s the retail giants all playing the same self destructive game.

    To give some UK examples, I shopped over the recent holiday period at three of the bigger players in the UK grocery industry. Tesco, Sainsbury and Waitrose. Tesco exhibited the same “service” as the US shopper found at Wal-Mart — huge gaps in inventories, basics not on the shelves and de-contented product lines. If they couldn’t sell it in huge quantities with no wastage through expired produce etc. they weren’t interested. It was one step removed from the supermarkets in Russia in the soviet era. Tesco is Wal-Mart’s mini-me. Sainsbury’s a little better but a noticeable decline in choice and they have seemingly made a trade off that they are not interested in the occasional higher value purchase if it means any sort of wastage so it is lots of “you can get this anywhere” (lack of) choice. Waitrose had plenty of everything including higher value and less common items.

    I don’t shop at Wal-Mart (UK’s Asda brand stores) on principle can’t comment. Hopefully other readers can oblige.

    1. gonzomarx

      I’ve found a similar experience at ADSA (Wal-Mart UK) and Morrisons (UK number 4 supermarket) over the holidays.
      Fewer high end lines like organics and a general lack of choice in the everyday lines.

    2. Ruben

      In Northern Spain customer service at retail shops is quite good and we see lots of staff helping out customers with smiles and apparent general satisfaction: the business model seems to still be to give a good service.

      On the other hand, I feel sorry for Americans having to gut their own fish in the name of marginally higher efficiency. In northern Spain the nice guy or lady talks and jokes while skillfully handle the big sharp knife and the machete turning a full body cod into perfect fillets in two or three minutes. Not the most efficient thing but as Yves seems to imply, who cares, we want to enjoy while shopping, efficiency is overvalued.

      By the way, in complex systems redundancy is often more important than efficiency in order to achieve resilience. One of the most inefficient processes is the most influential in keeping the strong disequilibrium that characterizes the biosphere: photosythesis. From an engineering point of view photosythesis is incredibly inefficient, wasteful beyond forgiveness, nevertheless it keeps a highly oxygenated atmosphere despite oxygen’s strong reactivity. We all depend on that as our most urgent need.

      1. Richard Kline

        So Ruben, I’m glad to have someone else raise the stability of redundancy as a desirable systemic feature. I did a series here on NC five years ago now, regarding systemic issues in massive systems, with the financial system as a focus. Massively ‘efficient systems’ are disastrous, is one conclusion, as their default tight coupling can propagate any kind of function to overwhelm stability and system limiting parameters.

        I didn’t raise that as in issuein this tread though it crossed my mind also yesterday. One could take this topic by itself and profitably pursue an entire analysis of Walmart’s prospects from that position. It would be a very interesting discussion, actually, but at least for myself I’d have to have a broader and more data-supported picture of how Walmart functions to assemble a reasonably sound hypothesis. Some other commentor or poster will have to get that going through . . . .

  4. JLCampos

    The only source of value is labor.
    If labor is eliminated quality must disappear, I mean quality as the goodness of something. Quality as category is still present as the rotting of everything.

    1. Capucine

      The source of value has to be Need or Desire which is fulfilled by labor and nature. When a substance or act is not demanded, it has no value to anyone.

    2. different clue

      If I spend the four hours from starting time till lunch time digging a big hole, and then I spend the other four hours from “lunchtime’s over” till quitting time filling that hole back in, I do a lot of labor. But did I create any value?

      1. JLCampos

        Well during your eight hours of ridiculous labor you repeated in a very short time what all reality is about. Children are educated and then die, carriers are built and then destroyed, airplanes fly and then disappear. The physical act is nothing in itself, what the intellect does is what is important.Those eight hours might in the hand of Lorenzo Ghiberti have produced the most sublime of beauties. The difference is the aim, the will then chooses the mechanism to obtain the end. Your aim was sterile the result was sterile.

  5. geof gray

    I live in south florida. we have one choice for cable: comcast. if you have trouble with the service and call the 800 # on their website, you spend 10 minutes getting routed. often your tel # which is supposed to identify you is not recognized. and if you are lucky enough to get to a real person (after the rat in the maze experience), they will handle california, not florida and then will give you another # to call and start all over. this has happened to me a half dozen times. the comcas monopoly provides “american level” service at high prices. the owners are plutocrats who support neocons, militarism, and a variety of faux liberal causes–all with my money!

    1. Heron

      We get the same general bs in the part of Texas I’m from, but from SuddenLink instead. This is one of those great “ironies” I assume; cable Privatization was sold as something that would increase choice, efficiency, and quality of service, but all it has really done is lead to a handful of monopolies that don’t have to care about customer service because the customer has no other choice in provider, that frequently restrict what their viewers are allowed to watch on the basis of their own narrow morality(The clearest memories of this for me come from my childhood when first God, The Devil, and Bob, and later Lucy: Daughter of the Devil were simply editted out of their respective channels’ streams, replaced with locally produced fluff news peices though SuddenLink has a habit of doing the same with PBS shows it disagrees with), and which use the common bankster tactic of low-initial-teaser-rate to draw customers into new services, only to later up the costs because who’s to stop them.

      Monopolization and the political corruption it breeds/feeds off of is rife in the US economy these days, but the cable/telecom industry was a real pioneer in it, and remains at the forefront in its pioneering efforts to shaft their captive customers as ruthlessly and often as possible.

      1. Stan Musical

        Two more examples of why one of the easiest and most effective ways to de-couple from the Borg is to toss your TV. Yes some of it is entertaining, but so are many other things you can do while you’re not watching teevee. Try it you’ll like it, but Comcast, C-Link, and the other RW monopolies won’t, so it’s a win-win, aka a win-lose.

        Teevee-free since ’83.

        1. different clue

          You don’t even have to toss the TV to detach from cable.
          You can get one of those digital signal converters ( or whatever they are called) to descramble the new broadcast signal to where your old TV set can recieve it. There is still fee-free broadcast TV, even PUBlic TV. One of these days I will get around to getting that converter box.

        2. Richard Kline

          I’m down with that. I’ve never owned a god box, and haven’t been in a residence that had one since 93. What a relief. I own two laptops, follow any news I want, go to a sportsbar if I want to watch a game, no problemo. Cable is just . . . tragic.

          Seriously, get an annual library card to a major university library, and you are so far ahead of anything which TV could possible offer on the upside it’s a joke. And as for the mind control and consumer socialization, it’s worth your life to expose your neuroanatomy to that kind of rot. Kill Your Box NOW! Sez I.

    2. Adam Noel

      The best part about it is that you then get to listen to news stations talk about how new software (or something similar) is automating all of Comcast’s jobs away. In reality the automation is cutting jobs and forcing work onto the consumer.

      1. Richard Kline

        So Adam, exactly, except that is a feature not a bug. And the prime feature. The Modern Corporate Model is to externalize all costs and liablity onto some combination of the supplier and the customer, turning the Corp’s business model into pure rent extractiion on the transaction between third parties kept at arms length from each other (ideally with oceans and bond instruments in between them).

        This goes back to Yves question regarding has customer service declined? The point is more that corporations have re-envisioned their function, from that of service providers or merchants to that of rent extractors. So from the Corp’s point of view, employees are a liablity and ‘service’ is a cost center unless it can be off-loaded onto parties to either side of the intermediation. The Corp isn’t _in_ the service/merchanting business anymore, which is why actual service seems to have been abandoned: it HAS been abandoned as a mission _necessary_ action, let alone a mission critical one.

        It would be very interesting from the historical and sociological standpoints to grasp WHERE this new model first took hold in the form we now see, and narrowly in what time and place. Who pioneered this? Who taught it in Business School? I’m guessing from the fallout that this model took hold in the 1970s, but that is a guess, yes. If one looks at corporate/trust behavior in the late 1800s in the US, one sees very similar behaviors, particularly with utlity companies _before_ they were publicly regulated, and with folks like Standard Oil and others. But who brought this model back into prominence? The airlines pushing for deregulation? That’s the first large scale case which lodged in my memory, but it wasn’t likely the first.

        Thoughts anyone . . . ?

        1. Lune

          Richard,

          I second your analysis. Very well put. Every business used to understand that you need happy customers to survive. But that’s not necessary if those customers don’t have a choice. And the key to that stage is to get big enough that you can force out your competitors.

          I would argue that the changes you’ve noted started in the Reagan years and rest on two broad movements: decline of antitrust protections, and increase in globalization. The former reduces our (the end-customer’s) ability to shop around and force companies to compete on service, while the latter, in contrast, increases the ability of companies to shop around for the products *they* require.

          Walmart’s success in devolving its customer service relies on both the ability to drive out competition in the form of local retailers, *and* the ability to source products from around the world from thousands of suppliers. While we get fewer and fewer choices of stores to frequent, Walmart gets more and more choices of suppliers to use.

          The only ray of hope here is that companies that hollow themselves out to be a purely rent-extraction device for their investors are highly susceptible to disintermediation. In both ways. Meaning, your customers can go online and get the same products directly from your supplier. But also, your suppliers can find your customers themselves and sell directly to them.

          For the former, look no further than Amazon, which, when combined with a Prime account, offers a great value proposition from which you can directly buy everything that Walmart sells, usually at a better price, and definitely more conveniently.

          For the latter, look at computer manufacturers, where component suppliers like Asus (motherboards) are making their own computers and selling them rather than giving Dell/HP/etc. a cut. Similarly, one of Apple’s problems is that aside from their designs (which they patent and protect vigorously), they have no actual manufacturing or technical advantage. Which means if a competitor comes up with a better design, they can instantly use the same manufacturing supply chain to put out a better product. Voila: Samsung. (Which actually manufactures the displays for a bunch of Apple devices).

          1. Richard Kline

            Thatcher even more than Reagan certainly propagated this program, but it preceded both of them. I’m old enough to have voted against Ronnie Raygun both times, and I recall the political environment. Those two didn’t launch ‘new ideas,’ they entered power with fully articulated programs which had _prior assembly_. But I wasn’t attending to the economy at that time at a level to see where this started. Certainly the anti-unionism of Tory Britain from the late 1960s was critically important from the ideological standpoint. But from the standpoint of a practical political program and economic ‘philosophy,’ this had been hothoused _somewhere_ before Thatcher and Reagan happened to get into power with an opportunity to proceed. And per the comment below, Bill Gates was in middle school when all this got going. Yes, he took the idea and ran with it—Microsoft is totally about stealing others products and then intermediating relentlessly in the users’ experience—but in no way originated any of this.

            Regarding going online to the source, most folks are not comfortable with ordering from a web site in China, and will not become comfortable with that; there are limits. And as another commentor here remarked, the working poor who are Walmart’s core customer base are the _least_ webbed-in sector in the country, they do not have the time to research 50 different items online for the best price+package configuration, and this isn’t going to change. What can change is a good-enough, bricks and mortar competitor with slightly better service and product mix. Most folks I know prefer Costco to Walmart if they have the choice. It wouldn’t take a lot to beat Walmart at their game IF a competitor could compete on supplier costs. Walmart’s scale has allowed them to wipeout small competitors, but not WMT has to defend that base whereas others can look for optimal niches from which to branchout. An analogy might be how Nordstrom’s and Sears are both around but have changed places in terms of where they stand in their particular retail landscapes. Walmart isn’t taking seriously the implications of getting a reputation as an inferior source, since historically they have been the _superior_ source for the kind of products they move. Well, that was then . . . .

        2. pws

          It’s amusing when companies that still have to please their customers think they have turned into rent extractors. Videogame companies are a prime example, but cable is similar.

          They start to go nuts when people just stop playing, and the executives are like “I didn’t realize customers could just walk away.”

          1. Richard Kline

            “I didn’t realize that customers could just walk away” is on the headstones of more expired businesses than any other verbiage, and Epitaph No. 2 isn’t close. Consider ALL of the US auto manufacturers. Everyone of them has either been through BK or would have been sans a massive rescue. And yes, the corporate execs at all of those went _nuts_ when their customers heavily bought Japanese and German automobiles instead of the crap coming off US assembly lines.

            When customers actually have a choice, they often do desert a vendor who is inferior, yes. Without compunction.

        3. readerOfTeaLeaves

          Agree that business schools, particularly starting in the 1970s, have something to do with this issue. Employees seem to have become a line item, rather than functional human beings.

          Best overall customer service in my experience: my local independent bookseller, my local/regionally owned grocery, my health club, my dentist, my local Starbuck’s. Also, local mid-priced restaurants. But those businesses rely on good relationships to remain viable.

          Otherwise, in general, customer service seems to be a lost art.

          Amazon has largely automated ‘customer service’. I’m astonished at the people I know (urban and rural) who use Amazon Prime — for $80 year, everything from televisions to baby cribs are being dropped off at their doorsteps. (In addition, some rural residents use Amazon Prime because it enables them to have better Internet access than they would otherwise obtain, but I’m not sure of the technical details.)

          I remember some years ago hearing that Amazon had hired quite a few Walmart execs. Supply chain expertise was beefed up at Amazon: http://www.nytimes.com/2009/11/24/business/24shop.html
          That suggests that supply chain and logistics may be more important than conventional customer service for an entity like Amazon.

          Amazon doesn’t often need to provide good customer service to general consumers. However, they have more sophisticated customers who probably need a lot of TLC: their cloud services are now used by Netflix, among others. When you buy a Kindle Fire, you are automatically in Amazon’s revenue flow whether you buy a book or stream video from the servers they run. In other words, Amazon understands how to leverage the technical infrastructure they’ve built by layering new products (i.e., Kindle Fire) onto their capacity to serve up streaming video, as well as eBooks.

          Walmart can never approximate the range of services that include operating data clouds, developing eReaders, and functioning as a publisher. It’s hard to understand how long Amazon’s reach has become.

          1. Richard Kline

            The thing about Amazon which apalls me but is salient for case study is that they are ENTIRELY unnecesary, pure intermediation. The suppliers do need a platform to reach the custome, true. They all should have built their own rather than don the yoke of Amazon. But that is the problem with producers, they see themselves as competitors, and thus they cede the custormer interface to retailers.

            Seriously, used CD suppliers should shift their traffic off Amazon and onto their own conjoint sales web platform. The used book market has done this time and again, everytime their web platform would get bought by Amazon, they’d all leave for a new one. Which is how it should be. But producers in this country are still stuck in 19th century thinking of each against all.

            I find Amazon repulsive. There is no company the retail customer should worry about more, Google included, than Amazon. Even though as I said in another comment, my living environment is not 2 km from them and benefiting no end from the money spillover from their presence.

          2. Richard Kline

            And as for good customer service, my experiences parallel your own: dentist, good but non-prestige restaurants, health club, cooperative groceries, wine shop. Several of the better online specialty retailers I order from are at the very top of the list, realizing that they need to cultivate a good customer experience for retention and word of mouth; those are their ‘immune systemic responses’ so to speak vs. Amazombie. The best ones grew out of former mailorder firms of exactly that same philosophy. All of these concerns are intensely aware, however, that the customer can absolutely go elsewhere, and so manage their entire business with that basic understanding.

          3. traveler

            To Richard. “The used book market has done this time and again, everytime their web platform would get bought by Amazon, they’d all leave for a new one.”

            I disagree. The used book business has been captured by Amazon. Yes, some booksellers move on but it’s very difficult for the low to mid-range used bookseller to make a living without listing on Amazon or one of the many businesses Amazon has acquired. High end rare booksellers have more options but even they avail themselves of Amazon and its subsidiaries.

            I’m an owner/member of the only online used book co-op I know of, TomFolio.com, and we’re life and death to hang on. We’ve struggled for over 12 years against Amazon, with many of us having to list on Amazon and/or one or more of its subsidiaries just to survive.

        4. H. Alexander Ivey

          My vote for who-started-this-mess would be the IT industry. Bill Gates and Steve Jobs would be my poster children. They promoted out-sourcing jobs (enabled by their software), they promoted out-rageous pay (stock options as insider trading), they promoted letting the customer “service” their own product, and most importantly, they promoted the EULA, a fantastic get-out-of-jail free card
          They made so much mony, so quickly, for so few, that the rest of the business world could not ignore them, so they joined them.

        5. Min

          “But who brought this model back into prominence?”

          Ronald Reagan & Margaret Thatcher.

      2. Goin' South

        “cutting jobs and forcing work onto the consumer”

        This has been the growing practice for the past 40 years:

        1) bus your own table at the McDonald’s;

        2) “Help keep our prices low” signs in the Walmart parking lot to get you to collect your own shopping cart;

        3) rapid expansion of “self checkout” at places from Home Depot to Penney’s.

        More and more labor is being forced onto the consumer along with the shoddy products and complete lack of customer service.

        1. Richard Kline

          So Goin’, yes, “about forty years.” But when, exactly, that’s what I’d like to know. Where did this gain traction, and who launched it?

          And those self-checkout lines; they’d kill me if I’d let ‘em. The supermarket deliberately understaffs, making unplesantly long lines. Inserts self-checkout stations once folks are surreptitiously incentivized to improve their shopping experience. And it would make minor sense if the stores gave your a price break for doing it—but they don’t, the greedy bastards! They incentivize you to donate your labor to their corporate bottom lines, and tens of thousands of mooks do. I always go through the ‘human line’ watching the drones donate their labor for free to The Man.

          But I’ve thought more than once, “This is is, ground zero in the enserfment or my civilization. Those mooks don’t even realize they are making the man rich, that is how socialized to abjection they are.” And yes, the system makes all of us it’s fools in some regard, not to pat mayself on my ol’ refusenik back to readily. Reform, to say nothing of revolution? With _that_ dross kowtowing to The Man by donating their labor? Not a chance. Bribe ‘em with a free beer, and they’ll even thank The Guy for the opportunity to grovel . . . .

          1. just_kate

            One time I accidently input the wrong (cheaper) produce code for bok choi instead of baby bok choi. There was no clerk around for me to tell so that day I did get a price break for my labor :)

          2. YankeeFrank

            Yeah, that’s the irony of it: these faceless corporations largely rely on the honor system for us to input the correct codes for all that expensive produce. Seems to me they left honor at the door a long time ago with the relentless pursuit of profit uber alles. Why should we honor anything they put in our hands? If Walmart asked me to deliver goods I’d tell them to stick it up their ass and twist. The system relies on us being honest while it twists and contorts language, culture and meaning to suit its bottom line at every opportunity, and then when they have used up every opportunity, they get the laws changed to make some new opportunities. A reckoning will come. These titans of assholery think they are immune to public backlash, but we shall see…

          3. casino implosion

            There are many, many, many ways in which the tendency of the average citizen to play fair and honorably and by the rules,pay their debts, etc, is taken advantage of by the parasites that feed on our society.

          4. LifelongLib

            I’m one of the drones that uses self-checkout. Shopping is so unpleasant that I just want to get it over with.

          5. Richard Kline

            So YankeeFrank, you hit the weevil on the head there. What is most toxically offensive of all about corporate behavior is that honesty and morality are expected and implored from the customer at the same time that the Corp operates with maximum immorality to rig the process and transaction to its own gain. The _hypocrisy_ of it rots out the citizen to citizen empathy upon which a highly connected, mutually dependent urbanized civilization depends. In the end, it will be the Corps or us. Too many are so programmed go get in line and get cheated that it’s hard to build resistance. Building alternatives has historically been a more functional counter-strategy. I’m amazed that we don’t see more retail cooperatives and nonprofit intermediation service providers. That is the future which we need and which I would like to see, but most folks just want to get through the line faster and go home to plunk down in front of the TV.

            And LifelongLib, your decision is a rational decision if made overtly. Lost time has its opportunity cost, and ones own sterss tolerance has to be husbanded fro where it is most needed, it’s not an inexhaustible resource. I’m more stubborn than most. However, be aware at the scanner that you are helping The Man destroy the labor environment to the detriment of the community. One has to prioritize ones battles, but this particular issue (not even a battle now because it isn’t .00001% of the citizenry who see it as such and resist) is NOT a small one. The Man thrives on our compliance, always remember that. Some times we are all better off if we each refuse the Devil’s petty daily deal . . . .

          6. Adam Noel

            “So YankeeFrank, you hit the weevil on the head there. What is most toxically offensive of all about corporate behavior is that honesty and morality are expected and implored from the customer at the same time that the Corp operates with maximum immorality to rig the process and transaction to its own gain.”

            An interesting point that should be highlighted is how industrial civilization requires total interdependence of its populace yet record profit margins are justified with “They earned it.” Very few, if any, people can survive on their own in modern society yet I suspect nobody thought they could survive on their own prior to modern society.

            Modernity, with its focus on the individual, is a farce in that regard. This entire system ,which is increasingly unstable because of the corporate mentality and complete self-devotion, is the most interdependent social system in human history.

            The absolutely terrifying part of it all is how the system selectively removes humans from communities and creates consumption rituals instead. More and more people end up isolated and feel like they could make it on their own. More and more people feel the social contract has been broken and act as if the social contract has been broken.

            I remember Thatcher talking about how each person should pull their boots up and look out for themselves. You start first Thatcher.. You start first.

        2. pws

          I _never_ collect shopping carts. Going out to collect shopping carts was the favorite part of my day when I worked at a grocery story.

          Of course, with Wal*Mart, you have to assume they are making their “associates” do it off the clock. Ah well…

      3. nonclassical

        Adam Johnson is RIGHT!!..said Howard Johnson, to Charles Johnson…(saddles ablaze)

    3. JCC

      I’ve heard that Comcast is great compared to my ISP, MediaCom. When your connectivity goes down you are routed to “tech support” which first puts you on hold with background music and a voice-over telling you support is far quicker at http://whatever.com, then you are routed to a “troubleshooting system” that walks you through restarting your router, unscrewing and unplugging connections and re-screwing/re-plugging and gives you 2 minutes for each procedure whether you need them or not (and never asks if you bothered doing all this before you bothered calling). Finally… after 30 to 45 minutes of this crap, they ask if you want to talk to someone, you say yes, they put you on hold again telling you you have a “15 minute wait time” then promptly disconnect you.

      At this point you are pretty much ready to call your Congressman and demand that he eliminate all Gun Control Laws immediately.

      The local restaurants I go to aren’t much better, in fact at the http://www.city-data.com/ forums the biggest and most common complaint about this town is terrible service at restaurants.

      Finally, the Wal-Mart here is a joke.

      Everyone loves to complain about service, we’ve all heard these complaints for years, but unfortunately it truly is getting worse, and Wal-Mart is leading the charge.

  6. stevewarton

    I have opted out. No TV (so no annoying commercials trying to get me to buy stuff), no debt, no eating out (its just crap with too much salt or too much sugar), shopping only at the most basic grocery store (and thankfully far less choice), ….

    I think Barry Swartz had it right (The Paradox of Choice), too much choice does paradoxically make us less happy. http://www.youtube.com/watch?v=VO6XEQIsCoM

  7. Gonzalo Lira

    Someone asked about Latin America.

    In Chile, we’re experiencing a (so-far) undiagnosed consumer credit bubble; the three largest retail conglomerates (Cencosud, Falabella, D&S/WalMart, all of whom are big players not just in Chile, but in Latin America, including Brazil) are basically acting like unregulated banks: They are giving credit where none should be given. Coupled to that, we have illusory copper prices, which pump too many dollars into the economy, thus keeping the peso high, and import prices low.

    The net of this is that consumers feel rich—so they are spending as if they *were* rich.

    Unemployment is at the lowest point ever, consumer confidence is the highest ever, and in the service industry at least, the customer is king—customer service is appreciably better nowadays.

    Chilean banking and fiscal fundamentals are fine—more than fine. Banks are comfortably capitalized, and the government is running a net surplus which it is dutifully stocking away. The 2008 GFC was a spectator sport in Chile, with no local effect whatsoever. (The 2010 Great Quake (8.9 on the Richter scale) provided a surge of spending on construction and repairs, so that obviously helped.)

    The problem is consumer spending—or rather, consumer credit. Even though the mortgage loan market is strictly regulated, housing prices are skyrocketing in real, inflation-adjusted terms. Home-buyers are using consumer credit to pay off bills, consumer credit from the big retailers mentioned above. So they are able to use larger chunks of their take-home pay for their mortgage loans without the consumer credit affecting their mortgage credit scores. (A potential mortgage applicant’s consumer credit cards are not tallied up by the bank, when assessing the mortgage application, because those retailers are not considered “financial service loans”.)

    So in Chile, we’re playing Musical Chairs. When China’s woes become too apparent and thus copper prices finally fall hard, or some as-yet unknown credit tipping point is reached, then the Chilean consumer is going to get squeezed and start defaulting. Mass consumer credit defaults might mean heavy hits to the big retailers.

    My worry, of course, is that, if consumers are suddenly squeezed and unable to pay for their retailer credit cards, they also won’t be able to shop at the retailer. (The Big Three mentioned above have about 90% of the local supermarket, department store and home repair store markets.) So the big retailers will take hits from both their credit card business and their meat-and-potato retail operations.

    Would this mean outright bankruptcies for any one of these big retailers? Maybe, if the squeeze catches them at a particularly bad moment.

    Chile is in the best shape of all the Latin American economies, but it’s not the biggest. The biggest is Brazil, whose GDP is about ten times larger. However, the *shape* of the situation in Brazil is very similar to that of Chile. And from what I’ve been hearing, consumer credit also seems to be an emerging issue in Brazil.

    Just some notes, for whatever they’re worth.

    GL

    1. Nathanael

      If the government has the sense to run surpluses and raise interest rates during the boom — and it sounds like it does….

      …then when the inevitable crash comes, if the government has the sense to run deficits and cut interest rates, you may get a “soft landing”.

      That’s as good as any country has ever done, so far.

      1. from Mexico

        Nathanael,

        I would point both you and Gonzalo Lira to this from Steve Keen:

        “Brilliant takedown of politicians obsessed by public debt”

        http://www.debtdeflation.com/blogs/2013/03/20/brilliant-takedown-of-politicians-obsessed-by-public-debt/

        Private-sector debt is every bit as important as public-sector debt, and we’ve seen in places like Ireland and Spain the ease with which it can be converted — instantly and effortlessly, as if by magic — to public-sector debt.

        Sometimes governments raising interest rates (governments aren’t always successful at this, such as during the eras of inverted yield curves during the naughties in the United States) is not sufficient to contain credit growth in the private sector, and capital controls are necessary. Of course capital controls are anathema to the neoliberals. (To call them liberal imperialists would be a much more accurate name for them, because it reveals their true nature and agenda.)

        Chile seems to be operating under the assumption that it’s now part of the imperialist club, and therefore immune to the consequences of debt build-up and Third World style debt-trap dynamics. And while its Domestic credit to private sector (% of GDP) is small comared to that of countries which operate under the protection of the US imperialst umbrella, and are not deemed to be vassal states of the empire, it is nevertheless very large in comparison to victims of the empire which have learned the lessons of debt build-up and debt-trap dynamics the hard way:

        Domestic credit to private sector (% of GDP) in 2012:

        Chile – 71.2%
        Brazil – 61.4%
        Mexico – 26.1%
        Argentina – 16.6%

        http://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS

        1. Richard Kline

          Agreed on private sector debt, and you omitted the example (somewhat) closer to home: Argentina. It was Argentina’s private, regional banks in the 1990s which bubbled up, not the public fisc. Only when those banks went under did it become a public sector problem. Those bonds we presently hear vulture capitalists suing in US Federal Court are the end result of a public resolution to _private_ sector debt 20 YEARS AGO.

          These things can drag on for awhile. But everyone in every county l-o-v-e-s that ‘feeling rich’ feeling. It’s a lot like being in love. It’s a whole lot like being “King of the World!” Until somebody’s horse finishes out of the money, and it all comes apart at the seams.

        2. Ruben

          “Private-sector debt is every bit as important as public-sector debt, and we’ve seen in places like Ireland and Spain the ease with which it can be converted — instantly and effortlessly, as if by magic — to public-sector debt.”

          As I have pointed out more than once it is wrong to say that public-sector debt was low pre-crisis in Spain. The very large debt of co-ops (‘cajas’, think Bankia) was counted as private but these cajas were controlled by party operatives and parties in Spain are funded legally and under the table by the taxpayer. One of the reforms pushed by northern countries is to make these Spanish cajas real private entities.

      2. Ruben

        If I understood correctly the counter-cyclical paradigm was made into law during the previous Chilean gov’t so the soft landing should be automatic when the inevitable slump of lower copper prices comes about by reduced demand from China.

    2. Richard Kline

      So Gonzalo, they’re worth a bunch, so thanks. This is the kind of fine grain which doesn’t make it into the newsfeed, but which matters much when the ‘free money’ gets real.

  8. Cletus

    Capitalism has become the aging former beauty queen.

    All of those she snubbed in her youth are alienated, and her peer group is arthritic and subject to the pains of both aging and diminishing numbers.

    Meanwhile, she tries to find a quality plastic surgeon among the class of young whipper-snappers who are far too busy trying to make the vibrant young (but blessed with only pedestrian looks), appear to be something they are not (which includes wealthy – these kids are trading plastic for plastic).

    So, she sits at her vanity each day, caking on the foundation and layering on the product(s) that will return her to her drop-dead, fuck-off, former beauty and exclusivity, all the while remembering, in the back of her mind, that the chauffeur isn’t as punctual or attentive as those she had become accustomed to in her youth and how really powerless over this latest fellow she is. But she does rely on him because he is strong enough to help her to the car (on the rare occasion that she has been invited out, or when she needs a ride to the doctor’s office).

    She is also bothered by the new domestic help, who seem to be hiding her things from her. Just the other day, she had found her favorite fur sticking out from under the bed. Of course, she never would have put it there. I must be the help. They all seem so distracted.

    Everywhere she goes, it is as if she ages and saps the vitality from the things around her.

    If only she had cultivated and nourished the things and people around her when she was in her prime. Maybe things would be different now that she is falling apart at the seams.

  9. craazyman

    They’re Just Glad to Be Alive

    Down in Virginia where I go sometimes, there’s a Target and other places. Most of the employees are women, from someplace in Mexico or Central America. They seem quiet and detached, not vacant minded and stoned from weed or festooned with tatooes in a furtive rebellion, but like nuns living in some quiet world with spirits you can’t see.

    If you ask them a question, they smile and they try. Sometimes they don’t speak English and you feel bad how they briefly struggle, failing the duty conveyed by their red store shirt and ID badge. When they’re behind the cash register they smile at you and say very little. They always smile. You can’t imagine them angry. I took a pair of pants to the dressing room and one was handing out ID cards. She was young with pimples all over her face and didn’t seem bored or haughty in her meniality. It was just a fact of life, organizing piles of ill-fitting pants on the floor with an unfeigned detachment.

    It’s really not very bad. They live in blocks of apartments built up behind slightly trash strewn boulevards of strip malls. Built over places they fought Civil War battles, an occasional disconsolate sign posted by a traffic light marks a spot where JEB Stuart did this or a Union Cantonment occupied a hilltop that’s barely a hill at all unless you’re looking for a place to dig in a fortification. Now they wait for busses in the wind, dressed in bright red and green clothes, waiting and waiting while they hold their children’s hands while they’re men wait in groups in the parking lot at Home Depot hoping to get picked to help with some lobbyist’s do-it-yourself home repair.

    If they think about it it must be better than anything they could imagine where they came from. But you don’t get the feeling they think about it. Why would they? I wouldn’t. It’s over and something new is underway and whatever it is, it’ll be better than it was. What it will be, I have no idea at all.

    1. Richard Kline

      So craazy, you’re dropping the right stuff this weekend, bro. And how do they do it, those transmigratory smilers? Cheeze Whiz Jesus, baby. Jehovah’s Witness and elevational Evangelicalism are widespread amongst those comin’ up El Norte.

      I’m glad they have a job. But then, I never voluntarily go into any big box retailer for any reason whatsoever. One can still find a very few of those durable, high quality items on line. I buy them there. Cost twice as much, last three times as long, and look ten times better. One way to pay for that is to eliminate some things considered necessities, like the pollutionmobile, and the TVcable Thing in the Box. Being a refusenik is work, I’m tellin’ y’all. But it’s _meaningful_ work . . . .

      1. craazyman

        yeah I hardly ever shop or buy anything at all. what is there to buy that’s worth buying? I can hardly think of anything, except food, because you have to.

        I’m lucky with the grocery store three blocks away and right on the bus stop. It’s a little neglected, in a slow part of town, with signs taped on the deli counter showing prices of specials handwritten in magic marker.

        There are 3 registers and there’s never a line. Almost never. You sort of get to know the cashiers, all women from 20s to some woman from India that could be 42 to 72, with hair on her face. She seems to me like some sort of higher being living her 23rd life in cosmic joy ride, and they give you a polite nod and smile. Sometimes even small talk. Sometimes they even flirt with you. They’re from the Bronx or Queens, well mannered and very polite.

        It makes you wonder why money corrupts so thoroughly, beyond recognition or redemption. The money queens so full of death leer at you from the TV screen, which is one reason I junked my TV long ago. Because if I turned it on there they were with a microphone or an ear piece earnestly and breathlessly reporting some insanely stupid trivia that bore no relationship to anything that I would consider to be reality.

        The grocery store is real. It’s frozen in time but I’m not sure what time — 1970s or 1980s or 1990s. Actually it exists outside of time, which is where I like it. And I actually like the cashiers, each one is like a door way into something entirely real and eternal. It’s not sentimental but it sounds like it. It really isn’t. Each one has a strange presence of sanity that you can almost see.

        There’s a few homeboy dudes who stock the shelves, they’re young and athletic but not smoldering with a violence. They’re also pretty cool, joking and jabbing each other while they work. Then they politely get out of your way if you want to reach for the mustard or a roll of paper towels.

        Service is excellent, all around, polite and cheerful. Even if you need a roll of quarters for the laundry, you can go u up to the customer service window, anytime, and buy one. No ‘tude in yer face. That’s always rare. I don’t know how they do it, but it redeems your faith and makes you wonder, when you have bad days, why you can be so graceless when these inividuals with so much less are, usually, so much more.

        1. casino implosion

          That’s why I’m never leaving NYC, places like that.

          When I go home to northern VA and walmartland, the changes that have taken place in the last three decades are horrifying.

          1. pws

            My family moved to Florida (from New Jersey) right after I graduated college but still wasn’t quite ready to live on my own yet.

            It was like falling into Hell, and I’ve been permanently damaged by the experience. There are good people here though, if you look carefully.

    2. mad as hell.

      “It’s over and something new is underway and whatever it is, it’ll be better than it was. What it will be, I have no idea at all.”

      Very well said. However it’s not difficult to expand those thoughts to entail a large majority of citizens of the entire industrialized Western society.

      1. Brindle

        “…something new is underway…”

        From yesterdays (3/31) link on Facebook exec Sheryl Sandburg.
        Is this the upscale flip side the Walmart employee?

        —”Sandberg’s language in this chapter, while directed at women, recalls and even replicates the language deployed at Facebook to push its employees to work harder.

        At Facebook, the offices are festooned with posters that read things like “Be Bold,” “Move fast and break things,” “Done is better than perfect,” and “What would you do if you weren’t afraid?” Facebook’s corporate imperative to move quickly and gain influence over more people, figured in a Formula One vocabulary of speed and victory, is repeated in Sandberg’s writing.

        “When more people get in the race, more records will be broken,” and, “Don’t put on the brakes. Accelerate. Keep your foot on the gas pedal.”

        http://www.dissentmagazine.org/online_articles/feminisms-tipping-point-who-wins-from-leaning-in

        1. Ms G

          Sheryl Sandburg sounds like a total lunatic. And she could be a she, a he or an it. Gender is *so* not the main event here.

      1. AbyNormal

        are U kidding — Craazy sledgehammers a strait pin thru any heart

        “You must stay drunk on writing so reality cannot destroy you.” bradbury, zen in the art of writing

        (keep that liver pickled Craazy)

    3. Capo Regime

      Wow Crazy. You have captured the scene at the Wal Marts and life along Richmond Highway in Northern Virginia perfectly. Could well be out in Manassas as well.

    4. from Mexico

      craazyman says:

      They’re Just Glad to Be Alive

      Down in Virginia where I go sometimes, there’s a Target and other places. Most of the employees are women, from someplace in Mexico or Central America. They seem quiet and detached, not vacant minded and stoned from weed or festooned with tatooes in a furtive rebellion, but like nuns living in some quiet world with spirits you can’t see.

      [....]

      If they think about it it must be better than anything they could imagine where they came from. But you don’t get the feeling they think about it. Why would they? I wouldn’t. It’s over and something new is underway and whatever it is, it’ll be better than it was. What it will be, I have no idea at all.

      Few in the United States can imagine the brutality and heartlessness with which the peasants were deprived of use of the land in Mexico. By 1910, U.S. property in Mexico amounted to 100 million acres, including much of the most valuable mining, agricultural, and timber land, representing 22 percent of Mexico’s land surface. The complexes owned by William Randoph Hearst alone extended to almost eight million acres.

      It was Emiliano Zapata who arose to challenge the dispossesion of the campesinos, the Spanish word for peasants. And we all know what happened to him, the story recounted here in poignant detail by Carlos Fuentes:

      On April 10, 1919, Emiliano Zapata rode into the hacienda at San Juan Chinameca for a meeting with Colonel Jesus Guajardo, who had defected from the government. As he crossed the threshold at two P.M., Guajardo’s guard presented arms. Then a bugle sounded and the guard shot two volleys, point-blank, at Zapata. The guerilla leader would have been forty years old in August.

      The colonel, it turned out, was not a defector at all, but a party to a government plan to assassinate Zapata. The uncomfortable, uncompromising Zapata, who lowered neither his flags nor his guard, had insisted on strict compliance with the demand for land and freedom. Instead, Colonel Guajardo was promoted to general and given a reward of 52,000 pesos — the irresibtilbe “cannon shot.”

      Zapata was loaded onto a mule, taken to Cuatla, and dumped on the pavement. Flashlights were shone in his face and photographs were taken in an effort to destroy his myth. Zapata was dead. But the people of the valley refused to believe it. Zapata could not die. He was far too smart to be killed in an ambush. And hadn’t his white horse been spotted waiting for him on top of the mountain? Every single person in this valley of Morelos, from the old veterans of the revolution to the schoolchildren, still believe that Zapata is alive. And perhaps they are right. Zapata will live as long as people believe that they have a right to their land and a right to govern themselves according to their deeply held beliefs and cultural values.

      – CARLOS FUENTES, The Buried Mirror

      Now the dispossesion of the campesinos is all but complete, as this graph illustrates:

      http://ww2.unhabitat.org/habrdd/conditions/centamerica/mexico2.gif

      Driven either by starvation or by the state’s instruments of violence from the land, the ex-campesinos now populate the sprawling shanty towns on the outskirts of the major cities and constitute Mexico’s super-cheap and over-abundant labor force. Given the free flow of goods and capital facilitated by NAFTA, foreign-owned corporations have exploited these once-proud people to no small degree. A half a million of them are employed by Mexico’s drug cartels. And twelve million of them have fled to the United States.

      1. from Mexico

        And the exact same pattern that Mexico and the rest of Latin America followed is now being repeated in China and India:

        http://www.kkr.com/images/insights/08-images/charts-26.png

        Arundhati Roy, just like Fuentes, writes of the violence and brutality being used to disposess the peasants of the use of the land in India, and in the process converting them into one of the primary weapons being used by the transnational capitalist class –supurfluous workers — which along with global labor arbitrage, have proven most effective in its world-wide war on labor:

        The Operation — which incidentally, is what wars are called these days—is scheduled to begin in October, when the monsoon rains come to an end and the rivers are less angry and the terrain more accessible. The people who live in these forests, including the Maoists who see themselves as waging war against the Indian state, are tribal people, the poorest people in the country. They have lived on these lands for centuries with no schools, no hospitals, no roads, no running water… In the corporate press words like ‘stamp-out’ and ‘exterminate’ are commonly used in discussions about what ought to be done to them.

        [....]

        An unacknowledged, low-grade civil war has been under way for a few years now. Hundreds of thousands of people have had their villages destroyed, their food stocks burned. Many have migrated to cities where they work as manual laborers on starvation wages. The rest are hiding in the forests, surviving on grass and wild fruit, many are slowly starving.

        But now preparation for the formal war in which ground forces will be assisted by helicopter gunships and satellite mapping, has begun. Brigade headquarters are being set up in Raipur, the capital of Chhattisgarh. The forest is being barricaded and cordoned off. Restrictions on journalists have been put in place. A slew of laws that criminalize every kind of dissent including peaceful dissent have been passed. Scores are being arrested and imprisoned without bail.

        http://www.literaturfestival.com/service/archiv/eroeffnungsreden/intern/reden/arundhati_roy_engl

      2. Richard Kline

        ” . . . [F]led to the United States” is exactly the proper usage, yes. It’s less looking for fortune than escaping misfortune. Even 29 anytime hours at Gross Box Corp looks good in those circumstances. Many might wish to stay home, but when home has become a claptrap shack in a crossfire which could be bulldozed on any given day, 29 hours faraway has some real shine to it.

  10. fresno dan

    I am moving to CA soon, so I had to get a new financial institution. I tried to use credit unions, but I never got a response to e-mails, and the phone calls went unanswered and unreturned.
    I finally decided to go with evil Wells Fargo just to get it done (I can change when I get out there). Anyway, after telling the Wells Fargo person setting up the account how important it was that I get a correct routing number to set up my automatic retirement deposit….I ended up getting an 8 digit routing number (I didn’t know these numbers had to be 0 digit – she had left out a zero in the middle of the number).
    Also, when I was closing my saving account at Suntrust (Suntrust doesn’t have retail in CA, despite the fact that retail Suntrust empolyees apparently didn’t know this – well I didn’t know it either, but I DON”T WORK FOR Suntrust), I had specifically prefaced that I WOULD be closing my checking account after I had gotten my account set up at Wells Fargo. The person than closed….both accounts.
    sigh…

    1. heresy101

      My credit union (Patelco)of 30+ years (mortgage, savings, Visa, etc) isn’t in Fresno, but they list multiple locations of Golden 1:
      https://www.golden1.com/Membership/default

      While having your money in a credit union is no guarantee of avoiding a Cyprus money confiscation, it will be a lot harder to justify stealing your money to give to TBTF banks.

  11. Lori Frederick

    It was only a few decades ago that when one entered a clothing store, an experienced, well-paid salesperson would greet you and assist you not only in your search for specifics, but would also make recommendations. While you were in the fitting room, they would bring you additional sizes and styles if you needed them.
    This type of vanished service could be found in all types of businesses.
    Hardware stores, housewares, electronics and shoes; all these retail stores provided service on the floor as well as at the checkout line.
    Today, poverty wages result such high turnover that no one has the time to learn their trade, but productivity is high.

    1. Jennifer

      “Decades?” Even 10 years or so you could get decent service at an average-non-1%-place. Now, I agree, it’s almost impossible. The only place in my neighborhood where you can get real service is at the Jewel-a unionized grocery store. I also agree with Richard on Wal-Mart, there was a bit, just a bit but more then there was ever before, momentum towards unionization at the end of 2012.I have to think they want to stop that by any means necessary, if a few stores close so be it. The problem of course is that their model has been so “successful” that everybody has copied them to the extent they just don’t have the advantage they did when they started,

    2. craazyman

      I remember going into swank Paul Stuart on Madison Ave. in New York and 3 or 4 haughty vultures would descend upon you from all sides with the aggression of a military raid.

      Even the women. One asked demandingly “Is that all you’re going to spend?” when I once bought a sweater, like I had something personal to prove to her about the size of my manhood.

      It was psychologically overwhelming. The violence. then When I bought something from them, every once in a while, they treated you like a member of some rareified club that they goverened.

      I can’t imagine what training produced that — and this was over 2 decades ago — and I was too raw and naive to counterattack with any success. And I usually left feeling bruised and beaten in some unnamed way.

      Now I can handle these types with one finger. Now I know. haha. Now they can even tell, with that sniffing ability they have. So if I go into one of these stores now, which rarely happens, it’s “Sir” from the start and I look them with a hard stare if they start f8cking with me.

      I know they need to make a living but they won’t eat my flesh and they know it.

      Generally speaking, I tell them I’m just browsing today thanks and then they leave me alone. If I buy something they’re shocked and humbled at the chance to accept my credit card, politely and with suitable deference. That’s how it should be. hahahah

      1. Trent

        The same kind that powers most of wall street dominated america. Worked briefly at Sears during college and they had quotas for how many people you had to get signed up for store credit cards every month. Just spent a year and a half working for EDMC (only employer in the area hiring and paying young college people more then any other job they can find) and what you do for eight hours a day, is call people who “have requested” information on the schooling they provide. Generally it targeted uneducated minorities (and thankfully most of them were on to the game at this point since EDMC has been doing this for the past five years( Goldmansachs owns a large portion of the company)). Anyways the job itself is terrible, but the management is so metric oriented that if you even didn’t mind the job they would drive you nuts over time with regards to hitting metrics. Now i’m not the kind of person who likes to push people into anything, but if a person was interested and wanted to talk to a school i would oblige them. Generally most people didn’t answer or you would get cussed out or hungup on. I was also suspicious of how the leads were distributed but am happy i was paid a months pay to quit the job and they won’t contest unemployment. Just seems to be the way the world works now (or maybe always worked) we are all parasites feeding off of each other, just less well hidden the united states these days.

  12. Skeptic

    No moss growin’ under Walmart’s big feet. In the UK Walmart owns ASDA:

    “People most in need will be given supermarket spending money from Birmingham City Council from Monday.The council is to start giving out emergency welfare payments in the form of a prepaid supermarket card.The card can initially only be used at Asda but it is hoped the idea will extend to other shops after an evaluation.”

    This is, of course, a test for a system where anyone receiving benefits from Big Brother will have their purchases limited to certain categories and probably certain suppliers. For instance, in the US your SS benefit good only at these major retailers for these types of items. The US Industrial Food Card is a forerunner of this. All for your own social good and the good of the Fascist Corporate Partners.

    As for Walmart, I am surprised they never set up their own currency system. Workers paid by card, topped up each payday. The card good at Walmart, preferred energy, housing, booze, entertainment, etc. suppliers. Maybe actually give the chumps some cash to start the system up until it was fully working.

    Sorry, but Walmart not becoming Fallapart.

    1. hunkerdown

      “Food stamps” are electronic in Michigan and have been for at least the bulk of a decade. Particular kinds of tender good only for particular items is a well-solved problem for decades now. Stored value and debit cards are a solved problem. Birmingham’s initiative is most likely just someone’s quo for Asda’s quid. If there is an experiment, it’s probably not a technical one.

  13. jim rush

    You got it right. I live in a small town in Texas and we don’t have a lot of choices here.

    The people are nice but there just isn’t enough of them. I wish they had competition.

    Thankx

  14. from Mexico

    Lambert Strether said:

    Wal-Mart is making a big push to ship online orders directly from stores, hoping to cut transportation costs…

    Could it be that the big box retail stores, just like the rich, large-scale family farming and agribusiness corporations, are not so “effiecient” now with $85/barrel oil as they were back in 1998 with $12/barrel oil?

    http://www.ioga.com/Special/crudeoil_Hist.htm

    Big box retail, just like capitalist agriculture, has an oversized hydrocarbon energy footprint. Could it be that as resource depletion sets in, growing grapes in Chile in large, mechanized farms to be shipped to your local Walmart is no longer viable?

    1. Adam Noel

      I agree with this. I suspect local food as the local food movement calls it is equally unsustainable at current oil prices. (Everyone driving to a farmer’s market to buy some grapes is wasteful) The big question now is will the amazon model survive higher oil prices. I have a friend who thinks the amazon model will be the model of the future due to the cuts to transport costs and everyone will just do their shopping online.

      I’m curious if big capitalism requires the stability of the post war period. Big capitalism requires highly efficient yet fragile networks. Fragility is fine in a stable world but the post 9-11 world seems to be one of increasing uncertainty. This uncertainty has come at a time where pretty much all companies attempt to discount risk to maximize cost so I expect to see some fireworks in the future if this is the case.

  15. WHR

    Though I do not disagree with Yves’s position, I do think there are some significant exceptions from which one mught draw some conclusions.
    Publix a Florida based Grocery Chain. is consistently listed among the best places to work, has annual sales in excess of $25 billion with earnings of $1.6 billion and is really quite a pleasant place to shop.

    The people working there are pleasant, always willing to help and they will carry your groceries to the car for you….no tipping is allowed. I should also mention that their prices are as low or often lower than any of their competitors.

    Perhaps one could attribute the pleasant experience to the fact that they are employee owned?

      1. AbyNormal

        publix is all over the SE an spreading
        (i got 4 staring me down in a 2mi radius, hotlanta)

        1. Capo Regime

          The one who is earing Walmarts lunch so to speak is Texas based HEB. Treats employees well and is privately held and to avail yourself of its wares and well treated employees does not require you to live in Florida or Georgia. There is also Texas based Whole Foods. Costco/Target solid national alternatives. Not great mind you just less bad.

          1. from Mexico

            HEB has stores in northern Mexico, in Nuevo Laredo and Monterrey that I know of.

            I have a friend who works in HEB’s warehouse in San Antonio. He says the sales volume in the Mexican stores, for same-sized stores, is far greater than in the US.

            Here in Queretaro where I live we have Walmart, Sams and CostCo. I find the shopping experience — e.g., selection and variety of merchandise offered, wait times at checkout, etc. — in these stores to be inferior to that in the US stores operated by these same chains.

            I only go to the states 3 or 4 times a year, so changes taking place at the local Walmart may be more noticeable to me than for someone who goes more often. It is my perception that the quality of service offered in the US Walmart stores has declined rather precipitously.

          2. SubjectivObject

            Yay, a callout for HEB (that’s Herman E ….. Butts, to you).
            Another silver bullet in the HEB belt is it’s Central Market stores. So far, one in each of the 4 major TX cities. Talk about customer satisfaction. A fabulous cross section of quality off-mainstream products from cheap to high end. Emphasizes local in season fresh produce (grapefruit, pecans, hatch peppers, …). The fresh meats and fish quality and selection is far superior to anything Whole Foods presents, and at a significant savings. All among the best selections of authentic beer, wine, gourmet, coffees, bakery (in store), cheese and deli all under one roof.

            I agree that the HEB gorcery stores far outclass Walmart in every category, including price. And Central Market does the same with Whole Foods.

            A Heustown culinary retailer to watch is the Middle Eastern/Mediterranean market Phoenicia. A great source and experience.

    1. AbyNormal

      http://www.progressivegrocer.com/top-stories/headlines/industry-intelligence/id37507/fla-farmworkers-marching-to-publix-hq/

      “While the changes we are seeing in farmworkers’ lives today are indeed unprecedented,” said the CIW’s Gerardo Reyes, “there is still much to be done. With each new corporation that joins, the wage increases and labor reforms grow and deepen, which is why Publix’s decision to turn its back on the FFP is so unconscionable. Its support, which would cost Publix little or nothing, could significantly change the lives of some of the state’s hardest workers, yet the $28 billion company won’t even show farmworkers the respect of granting us a meeting to discuss the Fair Food Program face-to-face.”

      “We are going to take our case directly to the consumers through our presence in the streets, through nightly meetings with supporters in churches, schools, and community halls along the way, and through our voices in the media,” added Oscar Otzoy of the CIW. “We will not rest until Publix realizes that the 21st-century supermarket cannot afford to turn its back on human rights.”

      http://www.huffingtonpost.com/rabbi-rachel-kahntroster/thankful-for-a-new-day-for-florida-farmworkers-publix-join-the-fair-food-program_b_2169216.html

      This year, I give thanks for the 11 corporations who have already signed Fair Food Agreements, including two — Trader Joe’s and Chipotle — who have signed in 2012. But many grocery stores have not yet committed to this new day in the tomato fields. For example, in the CIW’s home state of Florida, Publix Supermarket has refused to sign a Fair Food Agreement. Publix founder, George Jenkins, said: “Don’t let making a profit get in the way of doing the right thing.” It is unfortunate that today, when there is such a clear way for Publix to “do the right thing,” that Publix has not demonstrated that it values the hard work of farmworkers who make possible the food we share this holiday. They need to hear from us that it is time for that to change.

  16. Heron

    What immediately jumps out to me is the increasing emphasis pizza chains are putting on pick-up orders. With gas becoming more expensive and quite likely to continue doing so, and with the economy in the condition it’s in, the big national chains -Pizza Hut and Dominos- have started halving and even thirding thier prices for any customer willing to drive themselves to the store and pick the pizzas up themselves. I think it’s a good policy in depressed conditions, but it’s also a perfect example of this deterioration of sevices as corporate policy which you’re talking about.

    Meanwhile, the family-owned Chinese food joint with three locations(one in our sister-city College Station, the other in a Houston suburb) which consistently beats out far higher-end shops in local “Best Restaurant” competitions is willing to deliver to repeat customers with almost no added cost, rightly recognizing that customer loyalty is worth more in the long-term than a tank of gas.

  17. Dave of Maryland

    The mom’n'pop drycleaner? May I presume?

    I run a mail order bookstore, now 20 years old. We now gross 1/3rd what we used to. We’ve been bust the last three years. How do we survive? My wife secretly tops up the shortfall from her inheritance. Which is not large. We don’t talk about it.

    Payables used to get out the door in 40-ish days. (30 is the mythical standard.) But it went to 60, and then 65, 70, 75, etc. My main supplier now gives 60 day terms. Won’t squawk until bills hit 90. He’s supposed to pay his suppliers in 90, but I don’t see how he can.

    My checking account reflects this. The longer I wait to pay bills, the more money I “have”. But I haven’t got any! We’re all at death’s door, my suppliers included. They’re hanging on by their fingernails. They know if they go bust, they’ll drag down half their vendors. They don’t want the karma. Where they’re getting day to day money, I haven’t a clue.

    Consequently we are all demoralized and depressed. Phone my supplier and the latest recording of their greeting, from a guy I know, sounds ill and beyond depressed. I pointed that out to the order-takers, thinking they would get him to re-record it (he works with them, in the same room), but two months later, it’s still there.

    In addition to being too depressed to care, there’s no longer enough business to keep us busy. We goof off, search for porn on the internet, scan sites like NC to see if there’s anything new, wonder where we’ll be and what we’ll be doing in six months or a year. There are not enough customers, there are never going to be enough customers ever again, so why bother? Why care? Someone phones, wants a book, I’d just as soon gossip. Relieve the tension.

    It’s Monday. I used to place supply orders with three suppliers, every Monday. Now weeks go by without a single order. There will be no orders placed today. We’re all just that close.

    1. Richard Kline

      Amazon ate it all. I can see their Primary-Temporary HQ two blocks up out the bus window on my work commute every day; they bought it outright for $1 billion cash over the winter. Which isn’t delaying them breaking ground on their personal billion dollar Amazone six blocks the other way which I can see out my other bus window communting to work. Hoi poloi toiling in the Amazeon pile on at the closest stop, right by the non-union max-exploiter Whole Foods; all with their eyes locked on thier personal electronic devices so as not to see or care where they are or who we’ve become.

      Amazon; I loathe them. Sorry they’re standing on your windpipe, Dave . . . .

  18. Moneta

    My theory is that we are in the hockey stick phase of TBTF and we probably have another decade of the monsters getting bigger. Government policy is in their favor as is nearly every expense line in their income statement:

    -peak consumerism which reduced fixed cost per unit
    -low rates
    -low taxes
    -shrinking investment and DD&A
    -low wages
    -low cost of inputs

    But changes are slowly coming. For example, every time I go to Home-Depot, I can’t find what I need and a clerk gives me a card from a small supplier.

    Also, many of these players have grown like crazy, investing in new outlets until their debt ratios reach a limit. By that time the older outlets need to get revamped but they run out of money because their debt ratio have already hit a ceiling. I feel confident that many big players will get dismantled.

    Then you have the cash flow vs. ROI phenomenon that will probably hit. These firms invest on a ROI basis, usually looking for 10%+ returns. But as boomers retire and need cash flow to make ends meet, they will hurt their business model. A retiree could start a home business for the purpose of generating 5K, 10K, 50K… and these businesses are those on the cards the Home Depot clerks hand me every time I go.

    Change is coming. While the top keeps on protecting the too big to fail, the bottom is moving the foundations.

  19. Larry

    I have to say that I do not notice a decline in service in my area, suburban Boston.

    I recently had my car repaired by my local mechanic. They do excellent, honest work and don’t lead you on about how long work will take. The Mazda dealership I used to get warranty service done on my car was fantastic. I don’t go there now though because it’s not as close as my local dealer, and it is a great deal more expensive.

    My children’s daycare is quite good. There has been very little employee turnover since I’ve been there (four years now) and this is uncommon in the industry.

    Whole Foods customer service is great. Returns can be made without question and without receipt. The employees are very helpful with helping find things and taking complaints.

    Trader Joes has very good customer service, though I would say that the over the top cheerfulness creaps me out.

    My local liquor store has fantastic customer service. They’ll go out of their way to get special requests and they host a number of really great free tasting events.

    This is not to say that I don’t experience poor customer service, but I honestly do not detect a decline in general services. I’m a bit younger (mid 30s) so I can’t say what things were like in the 80s and much of the 90s. Maybe my view is slanted, or I’ve selectively condensed my commerce to places where I know that I receive very good service.

    1. AbyNormal

      “I wonder how many people I’ve looked at all my life and never seen.” steinbeck, winter of our discontent

    2. diptherio

      From your comment, it’s easy to see why you haven’t noticed anything amiss with the service sector:

      I recently had my car repaired by my local mechanic. They do excellent, honest work and don’t lead you on about how long work will take.

      Small business owners have an increased incentive to provide good service, as compared to national chains, since their personal reputation is at stake as well as the business’s, and because each individual customer represents a proportionately larger share of the business’s clientèle.

      The Mazda dealership I used to get warranty service done on my car was fantastic. I don’t go there now though because it’s not as close as my local dealer, and it is a great deal more expensive.

      Right, they were super expensive, which means they probably were paying their employees good wages, which generally translates to improved service (see my comment below)

      My children’s daycare is quite good. There has been very little employee turnover since I’ve been there (four years now) and this is uncommon in the industry.

      Again, low employee turn-over is a sign of good working conditions which, as you are obviously aware, is not the norm in the ‘industry.’ I worked for one day at a local daycare about a decade ago, but then had to quit because I was offered a job that paid above $7/hr. Your daycare probably pays considerably more (I sure hope they do).

      Trader Joes has very good customer service, though I would say that the over the top cheerfulness creaps me out.

      There used to be a restaurant where the staff had that “too chipper” thing going on. A friend of mine got a job there and then quickly quit after discovering that all the employees had a morning meditation ritual…and that she was shunned when she declined to attend (off the clock). I wonder if TJ’s has something similarly cultish going on.

      My local liquor store has fantastic customer service. They’ll go out of their way to get special requests and they host a number of really great free tasting events.

      This one’s easy, they’re just buzzed all the time. This place only hire happy drunks, obviously ;)

  20. F. Beard

    We could have efficiency, free trade and fairness EXCEPT for the government-backed counterfeiting cartel, the banking system. Why? Because business would then have to “share” with the workers and general public rather than loot them. Business would have to pay honest interest rates for the population’s savings or use their own common stock as private money.

    Progressives are far from the root of the problem when they ignore that government backed credit creation is INHERENTLY wicked.

    1. diptherio

      Ok Beard, how would this work exactly? Companies would pay workers in stock so we would have thousands of different currencies floating around, no? ISTM that some kind of unitary currency is socially quite useful, the question is how controls its creation and how.

      I think a TEMS-like system would be pretty ideal (where currency is created at time of exchange by the parties involved in the amount required). I just can’t wrap my head around how your stock-money system would work (if I’m correct that that’s suggestion). Any links that might elaborate/illuminate?

      1. F. Beard

        ISTM that some kind of unitary currency is socially quite useful, diptherio

        Yes, if that currency is not abused by, say, supporting the “private” banks’ unstable counterfeiting scheme (credit creation).

        the question is how controls its creation and how. diptherio

        It may well be that a single currency without a government backed banking cartel would work very well without alternative private currencies. But if it wouldn’t, I merely point out that there are ethical means of endogenous money creation, such as common stock, to supplement the government’s money supply.

      2. F. Beard

        Any links that might elaborate/illuminate? diptherio

        No link but I sometimes cut-n-paste this:

        1) Common stock as money requires no borrowing or lending. Assets and labor would simply be bought with new stock issue. Thus no PMs, usury, or fractional reserves are required. This is a huge benefit since PMs, usury (see Deuteronomy 23:19-20) and fractional reserves are all problematic.
        2) All price inflation is born by the owners of the corporation since every receiver of the new common stock money is by definition a part owner of the corporation. This is an important moral consideration.
        3) With no borrowing or lending, deflation is not built into common stock money as it is with the present money system.
        4) Since all money holders are part owners of the corporation then they could vote on how much new money is issued and for what purposes. Thus price inflation is under the control of only those affected by it.
        5) The assets of a corporation are typically performing assets though PMs could easily be accommodated too.
        6) Common stock as money shares wealth at the same times as it consolidates it for purposes of economies of scale. Labor problems should be non-existent since the workers would be paid in common stock and thus be part owners. The number of those with a stake in capitalism would increase. The need and desire for socialism should decrease.

        1. diptherio

          So workers would be paid in company stock but would then have to sell that stock in order to get money to make their purchases with, no? In that case, it doesn’t seem like this system would end up leading to actual increases in employee-control of the enterprise, since employees would have to sell most of their shares every month. Am I missing something here?

          I like the overall gist, but ISTM that worker-owned and managed co-ops accomplish the same goals more directly.

          1. Susan the other

            The gist is a lot like Bitcoin which is catching on. But Karl Denninger yesterday did a good analysis of why Bitcoin has too many pitfalls. One is it can’t be used conveniently either in transactions or to pay taxes. Two is that far from being untraceable, it is eternally traceable given enough patience by say the IRS. Three it is inflation protected at the expense of new Bitcoin purchasers who find it harder to”mine” the coins. Etc. If we take the banksters our of current credit creation, and move to socialize finance, the system we have now will work better than Bitcoin. And each state could sanction its own currency and it could be used for state taxes, like the Swiss WIR.

          2. F. Beard

            So workers would be paid in company stock diptherio

            Or a mixture of fiat and company stock.

            but would then have to sell that stock in order to get money to make their purchases with, no? diptherio

            No, not necessarily. The issuing company, in order to provide a drain for its common stock money, would accept it back for the goods and services the company produced. And other businesses, to remain competitive, would be sure to accept just about any credible private currency at the current market price (in fiat, I suppose) of that currency.

          3. F. Beard

            but ISTM that worker-owned and managed co-ops accomplish the same goals more directly. diptherio

            Sure, those are great EXCEPT they can be oppressors too by borrowing from the counterfeiting cartel – so long as it exists.

          4. F. Beard

            The gist is a lot like Bitcoin which is catching on. sto

            Not at all! Bitcoin is worse than gold as money since at least more gold can always be mined but not Bitcoins once the limit is reached. Otoh, there is no limit to the amount of common stock that can be issued so long as a majority of the money holders desire to. issue more.

          5. skippy

            Great[!!!]… corporation’s become their own bank’s too[!] w/ a completely captured deposit base.

            CEOs can go back to being called by their rightful title… M’Lord… nice~

            Skippy… like little fishes in da sea… humans are being over harvested for debt… which in turn over harvests da planet… fiddling around with currency debt instruments is a dead end… eh.

            Fisheries Depletion and Collapse

            By Kjellrun Hiis Hauge, Belinda Cleeland and Douglas Clyde Wilson1

            The scope of human dependence on marine life is significant, both in terms of the nutritional value provided by fish and other seafood to populations (especially in the developing world) and in terms of the level of economic security the fishing industry provides for coastal communities. Marine biodiversity, in itself, also offers tangible benefits to society, via revenues earned from tourism as well as by providing useful ecosystem services, such as the maintenance of water quality [Stokstad, 2006].

            Currently, however, about 25% of world fish stocks are overexploited or fully depleted and overcapacity in fishing fleets is the norm rather than the exception [FAO, 2007:29]. Indeed, many experts agree that the exploitation limit of marine resources has been reached, if not exceeded, and that this overcapacity of fleets, excessive fishing quotas, illegal fishing practices and the generally poor management of most fisheries are to blame [Rebufat, 2007:5-6]. The complete collapse of large, profitable fisheries such as the Californian sardine fishery in the 1950s, the Atlanto-Scandian herring fishery in the late 1960s, the Peruvian anchovy fishery in 1972, the Northern cod fishery off the East coast of Canada in 1992 and the North Sea cod fishery over the last decade have acted as clear warning signs that fishing practices in many parts of the world are unsustainable and that there are serious governance deficits evident in the management of fish stocks.

            Although we concentrate here on overfishing as a cause of fisheries depletion and collapse, the depletion of global fish stocks cannot be attributed to fishing alone. Habitat destruction, pollution, climate change and invasive species also have an impact upon fish populations. Also, a changing environment affects stock abundance, and some stocks experience collapse from environmental causes alone. In many instances, it is quite difficult to determine the main causes of the depletion of fish stocks.

            Overview of the risk issue

            Until the late 19th century, the fish resources of the world’s vast oceans were thought to be essentially inexhaustible, even by the most prominent biologists [Smith, 1994]. As the fishing industry expanded and technology made larger catches possible and more areas of the ocean exploitable, the received wisdom that fisheries were inexhaustible soon became discredited. FAO estimates that 25% of the world’s fish stocks are currently being fished at an unsustainable level [FAO, 2007:29], thus risking collapse.

            Fish are a common pool resource, meaning that it is difficult to exclude users and that exploitation by one user reduces the resource availability for others [Ostrom et al. 1999]. Common pool resources are found when a system of individual property rights is insufficient for sustainability or too costly to implement [Bromely, 1991]. Furthermore, in many cases, especially in long-distance fisheries and in developing countries, they are effectively an open access resource, meaning that a system of property rights is completely absent and thus the fish can be caught by anyone.

            When common pool resources are valuable and open access, overexploitation is inevitable because users have no incentive to conserve when the fruits of such conservation can simply be 1 Kjellrun Hiis Hauge, Institute of Marine Research, Bergen, Norway; Douglas Clyde Wilson, Senior Researcher and Research Director at Innovative Fisheries Management, Aalborg University; Belinda Cleeland, project officer, IRGC.

            http://irgc.org/wp-content/uploads/2012/04/Fisheries_Depletion_full_case_study_web.pdf

  21. diptherio

    You may well be right about the quality of services generally declining in our society. From my perspective inside the service sector (painting houses and waiting tables, recently) I would guess that this is a result of worse wages/benefits and working conditions overall (understaffing, particularly).

    It’s hard to care too much about your work if you’re being paid jack-sh*t to run yourself ragged for the benefit of those far wealthier than you could ever hope to be. Copping a ‘tude and and/or slacking off can be one of the few ways a beat-down worker has of striking back and trying to maintain a little dignity. It’s not surprising that the places where the above commenters have gotten good service are also good places to work.

    My guess would be that labor in the service sector has been squeezed in just the same ways as labor in every other sector of our economy. The resulting decline in working conditions leads, rather directly, imho, to poor quality of work. In my experience, my co-workers who provide quality service care about the job for reasons other than the pay. Those who are “only in it for the money” are always the sloppiest workers. I found this to be true when I worked at the nursing home, as well.

    To provide good service, in other words, you have to at least not hate your job, and the overall trend in our economy has been towards wage packages and working conditions that are increasingly hard not to hate (as the recipient…I’m sure the bosses love ‘em).

  22. Carolinian

    As someone who lives in a southern town and has shopped in Walmart much of my life I’d just like to offer a small rebuttal to your commenters–many of whom have probably never even been in a Walmart. Walmart didn’t invent the discount big box model and before Walmart there were Kmarts, Woolcos and other chains that evolved from the old five and ten cent stores. Walmart came to dominate because they were better at this model than their competitors. Their goods were of slightly higher quality and consistently lower in price. The public came to see them as a better “value.” Above all it’s about price, and this is a high volume low margin business. When business drops they can cut staff and service or raise prices and Walmart is all about price. They have made the decision that their customers care more about lower prices than waiting in long checkout lines and–despite the above anecdotal evidence–they are probably right. It was never a store that offered a lot of customer service.

    The American economy is not run out of Bentonville but out of lower Manhattan, and while the people running Walmart are undoubtedly hard asses they do run a company that is customer-centric and as such tends to reflect the American economy rather than shape it. Can you really claim that if there were no Walmart that factories would still be in America rather than China or the unions–never particularly strong in retail–still ascendant? Walmart is the symptom, not the disease. I certainly do agree that their workers should be better treated but they are not the cause of all this. Wall Street runs America…

    1. Richard Kline

      “Wall Street runs America.” I doubt that any commenter in to this post would disagree with that—but it’s not germane to the issue of whether the change in service delivery at Walmart and more broadly in the retail sector indicates a broader process in the economy. Other low cost retailiers have managed to retain the appearance of customer service, so what is it about Walmart presently that’s different? If you had made the argument that a Wall Streed induced/maintained depression for the working poor was driving Walmart’s actions, that would be one thing, but that’s not your argument to this point.

      But your argument regarding Walmart fails on the surface. yes, Walmart is about price; _and_ about availability. If you can’t get what you came for, it doesn’t matter if they’d sell it to you for $.13 less than somebody a mile away. Yes, Walmart has never been about ‘service,’ but the decline in _functionality_ of their retail enviroment for prospective customers is and should be alarming. There is a tipping point customers reach if they have a choice, I’ve seen this directly watching bankrputcies play out at the street level. And Walmart is begining to flirt with that. Sure, they could retrench, using the Walmart only markets as a redoubt. If they get themselves a ‘worst choice’ reputation, they will lose a very great deal of money even with the cheapest prices in town.

    2. PQS

      You need to watch the documentary “The High Cost of Low Prices” to understand why the rest of us hate WM so much….they have deliberately suppressed wages, stifled competition in small towns, and left communities decimated with their business model.

      You are right that Wall St. runs America, but Bentonville runs WM. And with an iron fist, too.

    3. McMike

      Walmart is the discount retail model on steroids, and a nasty sociopathic streak.

      And no, I do not aree that the migration of manufacturing to China was te result of some sort of natural law of physics. that was the result of deliberate legislative and philosophical choices.

      1. Carolinian

        “retain the appearance”

        Exactly…you are talking about perception. Last I checked the workers at Target or for that matter Whole Foods also don’t have unions. Apple, beloved of the creative class, has factory workers jumping out of windows. I’d submit that Walmart’s management is no more rightwing than a lot of other large companies. They are just bigger. The social policies that got us here have come out of Washington and high finance. Those of us out here in the heartland are just along for the ride. Ordinary people like Walmart because it does at least give them some small degree of empowerment,i.e the ability to buy what they need at a lower price.

        1. Ms G

          Except that what is happening is that even the “affordability” (empowering?!)prong of the WM “business model” (Employee Flaying System) is cratering — when the “empowered” purchasers and the serf-employees who can’t earn enough practically to take the bus home from work sure don’t have even that [great Walmart discount price] in their pocket to spend at Walmart.

          1. Ms G

            Ack — hasty word salad.

            Shorter: the “empowered” purchasers and the penniless employees are largely overlapping groups of the same human beings. Ergo, that great, “empowering,” Walmart discount price is useless if purchasing power is $0.00.

        2. Richard Kline

          “I’d submit that Walmart’s management is no more rightwing than a lot of other large companies.” You are completely mistaken in that assertion. The donations and political affiliations with which Walmart aligns are very distinctly right wing, far more than many corporations. This is documented, and you could have the information if you wanted to—which obviously you do not.

          “The social policies that got us here have come out of Washington and high finance.” The policies of the financial system, yes, do have their roots more in Ivy League and Wall Street than in any section of rural American, North or South, yes. The politics of anti-unionism and anti-government have a great deal to do with the _politics_ of suppressing employment, outsourcing public resources to private monopolies, and crony capitalism, especially in extractive industries and BigAg. And there, the particpants, politicians, think tanks, et. al. are massively Red State, and extremely right wing. this is also well known—to those who are not you, evidently.

          You don’t care to see a political agenda, so you don’t see it, Carolinian. I would assert that you don’t see a political agenda because, by and large, you are comfortable with the dimensions of it, and so it isn’t ‘political’ TO YOU, it’s simply pragmatic. You’d be more honest if you’d simply say you agreee with them, more or less, rather than to attempting to make the politics of labor suppression seem ‘normative’ by your rhetorical gladhanding of it.

          1. Breton

            Well said Mr Kline.

            If one has a history of visiting the rural Heartland in America, the devastation out there of the basic retail economy is undeniable. The supporting small cities are a shell of their former selves in many cases. And the folks keep shopping (and spending $$$ for the fuel) to their own final detrimant. They consciously utilize Wally World as if it were a pair of old comfortable boots; know the price of everything and the value of……
            The same phenom has been occuring in rural France for at least 15 years and to a certain degree in Spain and No. Italy to name the plces I have knowledge of. And it sounds as if Chile has it in spades, too (thank Milton Friedman for that, eh?)

            In fact the demise of bricks and mortar American Retail via the WWW is at least in part the result of the homogenization of choices across the Land. There once were regional differences all across America (and the World); alas, no more.
            Get off a Plane in Dallas and you would not know if you were not in Madison!
            Shop til you drop.
            Brave new world, you like?

            Breton

    4. different clue

      Costco pays and treats its employees better than Walmart does, in the teeth of the very same Wall Street grid matrix.
      Is the Costco management more powerful than the Walmart management? Or did Costco and Walmart make opposite choices on purpose about the very same things?

  23. OMF

    Basically the US is devolving into something like Mexico. Still operational as a country, but almost wholly dysfunctional.

    The problem is the class managing both the public and private sectors. Most of these people shouldn’t be allowed to run a sweet shop, let alone major industries. There is something about the present economic system which allows these people to continue operating, seemingly indefinitely.

    1. gepay

      I find the US moving towards a third world country for people who are not in the top 20%.It has been like that for the inner city poor all along. Only now it has moved to include the middle class. My wife is sickly and uses oxygen. There was a portable machine to supply it but it was on backoreder. It took months to get it. After it arrived it didn’t work properly. We returnit it and never got a replacement. An architect friend of mine said you can get what want made in America but getting it to you delivered correctly is a trial. He ordered a shower tub with a rail for older people. It was special order for the kind he wanted. It arrived. The rail had been poorly packed and put a hole in the shower stall. I could go on.
      We don’t need to talk about education in the US (excetpt in the upper middle class school districts). or the deteriorating infrastructure. The anywhere US look of strip malls, big box stores, and traffic lights with absurd traffic patterns. As even an engineer described as “our increasingly ugly technological “civilisation”.”
      With the unemployment situation in the US and the huge government deficit, why should we have to wait 15 to 30 minutes to talk to a human at any government agency?
      Everyday one reads about some police person somewhere doing absurd violent things such as shooting someone in a wheelchair who was threatening them with a ball point pen.
      Organic dairy farmer entire inventory being seized because their cheese was made with milk that wasn’t pasteurized even though there was nothing wrong with the cheese.
      So it isn’t surprising that service at big box stores is abysmal.
      We are getting the worst of both worlds. Whole areas of the country in thrird world conditions while every electronic communication we make is being monitored and stored by the NSA. Or getting groped at airports by TSA personel if we choose not to be irratdiated. We are paying for big government but it isn’t doing its job of regulating big industry – BP gulf destrustion. I dont’t need to mention the finance industry at this blog. Big government little government – I want good government responsive to the public welfare.
      Enough ranting.

  24. ContrarianOntarian

    Wal-Mart’s problems all lie in its business model, with three clear self-defeating policies:

    1. Growth was based upon destroying competition and absorbing their customer base. Once market penetration reaches a singificant point, there is no more growth available. The cost of opening a new store exceeds the market available to be absorbed.

    2. If the vast majority of employees are minimum wage and part-time, then they require another part-time job to survive, one that may well offer more hours at a slightly higher wage. Therefore whenever there is a conflict in work availability, Wal-Mart always loses. No worker would jeopardize the higher paying job over the lower paying job.

    3. Suppliers that are continually squeezed and rely heavily on Wal-Mart for their existence do not weather economic downturns well, if at all. As economic conditions deteriorate, Wal-Mart’s suppliers are forced out and the company is not able to secure good quality replacements.

    So what we are seeing is the exhaustion of Wal-Mart’s decades-long business model. The company requires a total re-evaluation otherwise it will go the way of Kresges with a downward cycle of reduced profits leading to cheaper products, leading to reduced sales and profits, even cheaper products etc. Wal-Mart may be headed to dollar-store status and a significant reduction in stores.

    1. Richard Kline

      So Contrarian, you frame the situation well. And the Kresge analogy has traction. Kresge and before the Woolworths were the niche equivalents of Walmart in their times; not so much in terms of employee management but providing ‘a little better for a lot less.’

      I strongly suspect that Walmart will be closing _many_ stores. I’m less certain that they will have as severe supply constaints as you suggest, but others with sector experties will have a sharper view there than I. Still, I concur with your larger point: Walmart has maximized their model, and there is nowhere to proceed but retrenchment going forward. And if Walmart doesn’t manage that retrenchment well, or manage it at all as at present, then the transition will be a catastrophic one.

    2. McMike

      In essence, the WM business model is of value-extraction rather than value-creation.

      They saw a fat economy and they swooped in and began sucking at its neck. Very much like a private equity fund canibalizes companies. They get away with it because they are willing to do what many others are not; to be an unapolgetic parasite, and to be unashamed that their model is by design eventually going to strangle the goose that laid the golden eggs.

      While value-creation can theoretically perpetuate indefinitely, value-extraction is by definition a proposition with a definite end point.

      1. ContrarianOntarian

        You’ve made an excellent analogy regarding the company’s parasitic approach; and Mr. Kline’s previous post pointing out that Wal-Mart’s target demographic (low income) leaves nowhere to grow was also spot on, putting the company in a very difficult position. Squeezing out higher net profits from decreasing gross sales is a tough task when your corner of the marketplace is the one with the least disposable income.

    3. different clue

      And when Walmart tries to enter the Dollar Store niche, it will find numerous Dollar Stores already filling that space and determined to defend themselves.

  25. slothrop

    This is an inflation story. Cost-push inflation. And it’s going to get a lot worse.

  26. Ed

    No one has picked up on Yves’ comment on the restaurants, but I’ve noticed the same thing. It could be a New York thing. I think New York restaurants, like other businesses in the city, have been squeezed on the rent and have been cutting corners on the quality of the food to get by. I think the city’s economy has gotten very precarious as the cost of living and the cost of business (mainly due to rent increases) just keeps increasing past what “normal” people/ bueinesses can really bear.

    1. Yves Smith Post author

      That makes sense!

      I’ve seen too many businesses in my ‘hood that I liked close due to a rent increase, a little, seedy looking liquor store had well chosen everyday wines displaced by a bank branch, ditto Greek veggie store around the corner, and now the best health food store within a 15 minute walk! Waah!

  27. HS

    Remember back in ECON 101 when they introduced those nifty supply/demand charts–did you ever see the word “service” appear on the vertical axis? Walmart knows that price is all that matters to their demographic. Time they’ve got, money, not so much.

    As for the unstocked shelves, let’s think about that one for a minute. Walmart is a company that has entirely dominated the US retail market for the last 2 decades. While it’s possible the suddenly forgot how to run the business, another explanation is far more likely. Do you remember the last time this happened? Probably not, because it received no teevee coverage, but I do. I recall seeing similar inventory issues in Walmart and Target in the summer and fall of 2008–shelves were lacking mid-high end discretionary items and perishables. I’d be very surprised if Walmart’s forecasting isn’t telling them something that justifies the opportunity cost of empty shelves.

    1. Richard Kline

      Which all is a good point as far as it goes; and no farther. Walmart seemed to be throttling back even before Q1, and yes there seems to be a lot of model projection involved in that. If Walmart is truly the smartest retailer in the realm and _deliberately_ battening down the hatches by short-ordering and cutting staff, one would expect to see closure of weak stores as well, but there’s not much evidence of that unless you have numbers to the contrary to back up your overall thesis. Underperforming stores will drag profits far more than a little too much on some shelves. So there’s the test, are stores being closed as well. If not, they yes, Walmart really is having a ‘senior moment.’

      OTOH, the bizarre flubbery of ‘online now’ and the crappy customer _experience_, which has been discussed in MSM in places, not just in the post here, has long term opportunity costs of a different sort. The idea that ‘those stoopid poverty shoppers got nowhere else to go nohow’ only goes so far, because there are viable alterntives in some markets.

      1. HS

        Closing down stores? That tofu is rotting your brain, son. Get a WMT quarterly report and have someone who understands it explain it to you, slowly and often. Investigate the concept of same store sales and why store closures are an act of typically futile desperation. Then, rent a Zipcar or whatever hipsters do when they need to travel further than the bus will carry them and see what the economy looks like outside of the urban paradise. You’ll find out pretty quickly that you don’t have to get too far from either coast before Walmart is the only game in town.

    2. Bill Smith

      Our Walmart superstore here seems to be running fine. I have noticed some stock outage on the shelves, but it’s the low priced food items. Plenty of higher priced brand name equivalents, but the bargain stuff is sold out.

      There is some evidence they are trying to increase the $ per shelf space. My small bag of frozen fries for $1 has permanently disappeared and was replaced by the “cheap” Walmart Great Value bag of fries for $2.

      But there is no shortage of good competition around here. We have Whole Foods, but better yet we have Sprouts which is like Whole Foods but you don’t need to bring the Whole Paycheck.

      Then again, I’m glad I don’t need to get ripped off at Office Depot anymore and can just get that kind of stuff at Wal-Mart.

      The store is spotless clean too. Went their yesterday and needed a restroom break while shopping. There was a young, Caucasian girl, normal weight, no visible tattoos, no nose or lip piercings, with mop and bucket in from of the mens’ room door. She saw me approach and politely asked if I would like to use the restroom before she started cleaning it. I said yes, thankyou.

      Our checkout people seem to be predominantly old white people, which look kinda like retirees. Since we have a lot of retirees around here, I’m jumping to the conclusion they are retirees, and perhaps retirement isn’t turning out quite the way they thought it would, with ZIRP and supplemental medicare insurance (to cover the deductible and 20% copay) costing as much rent.

  28. Mary Bess

    It’s a joy to see where commentators can take a complaint about deteriorating service. Thanks to all for their deeply reflective responses.

  29. Adam Noel

    There’s one thing I’m curious about that is similar to this topic. If recent innovations are not able to increase productivity as much as past innovations (I suspect the computer although a factor in increased productivity is marginal in comparison to the technologies before it) then the economy itself should not be able to grow at conventional rates. For the oligarchs rapidly increasing growth has been the story for the 100 years prior to the 1970s.

    Rapidly increasing productivity is no longer the norm so the oligarchs were forced to find means to continue on the path they had been for the last 100 years. This requires oligarchs to turn towards the parts of the pie they did not own (i.e. the worker’s portion). Productivity increases are no longer conventionally possible so cuts to quality are the only way to increase yields.

    In this case devolution is just a dangerous process that is ongoing from the growth in power of the financial class and the corporate elites over the last centuries. The problem is devolution creates structural problems threatening the stability of the system.

    Combined with this problem of diminishing returns on productivity is the increasing cost of material inputs (resource constraints) into the system. The pie may well be shrinking causing and the oligarchs will have none of this. They would sooner destroy the system then deal with diminishing returns.

    1. rps

      I only go because my local K mart is so close.

      The devil is in the details of conjuring up false perceptions such as: convenience, more choices, cost-savings, bargains, cheaper than…, friendly, helpful, more for your dollar and “Always low prices. Save Money. Live Better.” Live better than who? Not better than my parents 40-60 years ago. The goods they purchased lasted a lifetime. Today’s products have built-in obsolence with a fake 30 day warranty.

      All the right words according to Pavlov’s classical conditioning to habitually train us not to think, but reflexively respond. The promise of nirvana to become rich by –saving through repetitive buying of the same fall-apart (taxpayer subsidized) crapola at low prices again and again and again.

        1. weinerdog43

          They finally pulled the plug on our local K-Mart last month. However, about 2 years ago, Mrs. dog and I learned not to pick up ‘maybe’ items until we had in hand what we came over there for. Invariably, it was out of stock, wrong color, damaged, whatever… If you had avoided the other ‘maybe’ items, you could walk right back out the door and not waste your time hoping you might find something useful.

          We have not been to a ‘Mall-Wart’ for well over a decade. The last time I was there, I somehow got a big blob of industrial grease on a really nice Brooks Bros. shirt just by virtue of their nasty shelves.

          Wal Mart and K-Mart taught me 2 lessons: 1.) Don’t shop at a store so filthy that you’ll spend more in cleaning costs than you’ll ever recover in ‘low prices’; and 2.) If they don’t have the merchandise I am looking for, what in the world I am doing wasting my time in their premises?

          Now if I need something, it’s Ace Hardware or Target. Great customer service at Ace, and good prices at Target.

  30. Pete

    Is Walmart becoming K-mart? K-mart always has sparse shelves and few employees willing to assist. The stores appear to be ghostly. I always wonder if the surviving K marts are only there for tax avoidance schemes. I only go because my local K mart is so close. If this is the direction Walmart is heading then that is very very sad but I will not shed a tear.

    1. bob

      K-mart and Sears (parent) are real estate PE plays.

      They owned very high traffic RE. PE is now liquidatding them. It takes time, they don’t want to do it all at once.

  31. allcoppedout

    All the main UK supermarkets are available (except Waitrose) around our town. The local market provides higher quality food at competitive prices, though lacks park and shop convenience. Aldi, Lydl, Netto and a local B & M Bargains are all cheaper (perhaps 30%). Various local shops including the Coop provide convenience shopping. Online shopping saves me meeting so-called customer service (we bank on line too)and the expense of local shops.
    I hesitate on Yves point on customer service because I tend to avoid it because it is so often a bolt-on rather than integral in the business and supply chain.

    We are consumed with efficiency in an overall model in which it can’t function to our overall benefit. When we make a supply chain efficient through international sourcing and the rest, we displace people and wages from that system – relying on innovation and new business to take up the slack in growth. Simples – except it’s ideological fantasy that hides unemployment, under-employment, welfare subsidies in wages paid (tax credits, health benefits not paid)by employers and tax avoidance via transfer pricing offshore and so on.
    We need deeper analysis. Our efficiency system is producing lousy, part-time, tax payer subsidized jobs in which surpluses are not invested with taxes going offshore with financial services evading the efficiency model through complex Ponzi (also screwing wages as inflated assets include such trivial matters as ‘homes’).
    I’m not sure I can demand customer service from a single mum with her mind on a sick kid and bills she can’t pay from a part-time job plus tax credits, being forced to move because the bedroom that houses her kid’s wheelchair is now sunject to bedroom tax.

    1. from Mexico

      allcoppedout says:

      We need deeper analysis.

      EXACTLY!

      As Samir Amin put it:

      Conventional vulgar economic theory avoids the real questions that the expansion of capitalism poses. This is because it substitutes for an analysis of really-existing capitalism a theory of an imaginary capitalism, conceived as a simple and continuous extension of exchange relations (the market), whereas the system functions and reproduces itself on the basis of capitalist production and exchange relations (not simple market relations). This substitution is easily coupled with the a priori notion, which neither history nor rational argument confirm, that the market is self-regulating and produces a social optimum. Poverty can then only be explained by causes decreed to be outside of economic logic, such as population growth or policy errors. It is often attributed to the ongoing technological revolution and considered as transitory difficulty . This fallacy is based on a concept of “neutrality” of technologies ignoring its operating only in the frame of social relations and its relation to the actual logic of capitalist accumulation. Yet this veritable liberal virus, which pollutes contemporary social thought and annihilates the capacity to understand the world, let alone transform it, has deeply penetrated the various lefts constituted since the Second World War. The movements currently engaged in social struggles for “another world” and an alternative globalization will only be able to produce significant social advances if they get rid of this virus in order to construct an authentic theoretical debate. As long as they have not gotten rid of this virus, social movements, even the best intentioned, will remain locked in the shackles of conventional thought and therefore prisoners of ineffective corrective propositions—those which are fed by the rhetoric concerning poverty reduction.

      http://actuelmarx.u-paris10.fr/m4aminm.htm

      1. from Mexico

        Here’s an example Amin gives of what he is talking about, world agricultural production:

        Indeed, what would happen if agriculture and food production were treated as any other form of production submitted to the rules of competition in an open and deregulated market, as decided in principle at the last WTO conference Doha, November 2001)? Would such principles foster the acceleration of production ?

        One can imagine that the food brought to market by today’s three billion peasants, after they ensure their own subsistences, would instead be produced by twenty million new modern farmers. The conditions for the success of such an alternative would include the transfer of important pieces of good land to the new agriculturalists (and these lands would have to be taken out of the hands of present peasant societies), capital (to buy supplies and equipment), and access to the consumer markets. Such agriculturalists would indeed compete successfully with the billions of present peasants. But what would happen to those billions of people ?

        Under the circumstances, agreeing to the general principle of competition for agricultural products and foodstuffs, as imposed by WTO, means accepting the elimination of billions of noncompetitive producers within the short historic time of a few decades. What will become of these billions of humans beings, the majority of whom are already poor among the poor, who feed themselves with great difficulty. In fifty years’ time, industrial development, even in the fanciful hypothesis of a continued growth rate of 7 percent annually, could not absorb even one-third of this reserve.

        The major argument presented to legitimate the WTO’s competition doctrine is that such development did happen in nineteenth and twentieth century Europe and the United States where it produced a modern, wealthy, urban-industrial and post-industrial society with modern agriculture able to feed the nation and even export food. Why should not this pattern be repeated in the contemporary third world countries ?

        The argument fails to consider two major factors that make the reproduction of the pattern in third world countries almost impossible. The first is that the European model developed throughout a century and a half along with labor-intensive industrial technologies. Modern technologies use far less labour and the newcomers of the third world have to adopt them if their industrial exports are to be competitive in global markets. The second is that, during that long transition, Europe benefited from the massive migration of its surplus population to the Americas.

        · Can we imagine other alternatives and have them widely debated? Ones in which peasant agriculture would be maintained throughout the visible future of the twenty-first century, but, which simultaneously engage in a process of continuous technological and social progress? In this way, changes could happen at a rate that would allow a progressive transfer of the peasants into non-rural and non-agricultural employment.

        Such a strategic set of targets involves complex policy mixes at national, regional, and global levels.

        The survival of half of humankind has to be given serious consideration. It will not be guaranteed unless the right of all peasants to have access to land and means to farm it properly is recognised. In that spirit WSF should organize a global campaign aiming at having this right recognized.

        1. allcoppedout

          I can’t fault any of that From Mexico – though at 60 I note the analysis predates my birth and promises of socialist paradise led to lives in tears – though the Sino-Soviet experience is not all and there are good examples.
          It would be interesting to try and identify the “virus”.

          My day-to-day tends to support Yves not having a run of bad luck. I’m not much of a consumer, but note our news is full of dire service by police, health service, care and so on as well as shops – indeed ATMs and on line banking have removed a lot of customer service pain from my life – I’m sure the removal of financial services and the creation of utility banking would help a lot more (I have thankfully never been taken in by alpha driven returns).

          I have seen academic accountants taken in by “personal pension” schemes promising twice the return from half the investment and quadruple the fees – etc. – even some critical theorists were taken in. Left wing rhetoric and technical financial ability seem no protection against the virus.

          I generally favour economies of scale and technology – as they produce more for less work that breaks backs – but the very idea that capitalist innovation can soak up the labour is nonsense. If this mechanism worked we wouldn’t need tax credits. It also makes no sense to see managerial-professional rewards dwarfing those for hard work – against the global arbitrage on wages. The old excuse (just look at our productivity) was never true, and now we can the the obverse was – they were Ponzi debt raisers, not producers of wealth at all.
          The big problem for me is we can take the left critique on board, but know the changes needed – let’s say a job-income guarantee cannot be left in the hands of government bureaucracy and performance management. Even decent ideas like micro-finance have died in corruption. We need flesh on our alternatives.

          1. from Mexico

            When it comes to correctives, those emanating from the left have fallen well short of the mark.

            When it comes to critiques of the reigning capitlaist paradigm, however, I don’t think it gets much better than those coming from the Marxists and the anarchists.

            There used to be a time when Christianity joined the fray, but things like truth, justice and fairness seem to be just about as foreign to the modern-day Christian vocabulary as they are to that of neoclassical economics.

            Islam? I don’t even know enough about it to even comment, but there does seem to be some revolutionary spirit left there.

            It seems like we’re stuck in all these obsolete 200 to 2500 year-old doctrines, based on views of humanity that we now know are not very realistic, but don’t seem to be able to craft anything newer and better.

  32. rps

    Do you hear that? It’s the giant squid straw-sucking with the background white noise of: beep…beep…..beeeeeeeep. That’s the heartland of America as another local zombie community is drained-lifeless. In other words, The Walmarts of the USA are federal, state and regionally subsidized. They would go bust without all the incentivized government freebies to freely attach their tenacles to every taxpayer and taxpayer funded systems.

    Using Walmart as one of the plagues of big box store examples –Let us count the ways they destroy a community:
    !. Profits are not recycled back into the local economy like the earlier model of the mom and pop stores they destroyed. Yes, Walmart employees may spend locally. However, there are not enough employees per-locality to make a difference.
    2. What percentage of Walmart profits come from customer Link cards and unemployment checks? You know where I’m going with this…..
    3. Does Walmart have a private agreement with the regional and State governments to pocket sales taxes, employee State income taxes and R.E. breaks as in ‘no charge’ to operate? That is to say, they are not locally or personally invested in the community(s) welfare and well-being.
    4. How many of their employees are medicaid and LINK card receipients?

    The Walmarts, Targets, etc.. of the USA have killed communities by destroying local businesses that had provided jobs and benefits. In other words, a life-cycle economy in-which the profits were recycyled back into the community. The parasitical Walmart model drains the ‘lucky to have a job’ Joe and Jane six-pack wallets. Walmart is the glutton who eats at the taxpayer trough of unemployment checks and LINK cards. Siphons regional, state and federal dollars, etc…

    1. Brooklin Bridge

      The Walmarts, Targets, etc.. of the USA have killed communities by destroying local businesses that had provided jobs and benefits.

      This is such an obvious outcome that I have been amazed all my adult life that people so readily fall for it. And you really don’t need a degree to see the trap.

  33. AbyNormal

    BEIJING–Wal-Mart Stores Inc. (>> Wal-Mart Stores, Inc.) plans to invest 500 million yuan ($79.8 million) to upgrade Chinese stores and said it is on target with store openings there, following local media reports that said recent store closures are derailing store growth plans in one of the retailers’ key markets.

    The Bentonville, Ark., retailer plans to remodel 50 of its 380-plus stores there and will open 30 new stores this year the country, according to a company statement on Monday. In the next six months, store openings are expected in cities such as Xinyu in eastern Jiangxi province and Shantou in southern Guangdong province, the statement said.

    Wal-Mart also plans to invest in distribution-center networks and to improve its warehouses, the statement said, adding that enhancements are aimed at improving food safety and reducing costs.

    Wal-Mart’s announcement follows local media reports that questioned whether it is stepping back from its growth targets. The reports said Wal-Mart is closing China stores throughout April following struggles with high rent and increasing labor costs.
    Wal-Mart said it will open soon new two new Sam’s Club outlets and has completed the remodeling of 31 stores it began last year, today’s statement said.

    The retailer has been expanding its online operations in China. It bought last year a 51% stake in Chinese e-commerce company Yihaodian.
    http://www.4-traders.com/WAL-MART-STORES-INC-4841/news/Wal-Mart-China-Store-Openings-on-Track-16590973/

  34. Dave

    From a general impression of most of the above.

    Many of the writers have a strong feeling of entitlement for services and full shelves. Many, if not most, are not short of money. Probably they have never had to search for low prices on basic necessities.

    My wife escaped from Romania while it was still communist. I once asked her if she minded standing in line at the Post Office. She replied, “No, at least you don’t have to fight.”

  35. Bruckman

    Service is based on custom, tradition and training as well as established values. When custom is discarded, traditions are mocked and established values are replaced with new ones, how can you expect good service?

    e.g. I went to Brooks Brothers to buy a suit. Instead of an older gentleman who had worked there for decades and knew mens’ clothing thoughly, I was attended to by a young woman.
    I asked to be helped by a gentleman in polite manner. Turns out there were none working in that store any more. So I left and went to a competing store.

    I want to be waited upon by a professional waiter, not a “server” with nose rings and tattoos. When I go to a lumberyard, I want to be helped by an American that worked as a carpenter or in the lumber yard for years, not some 18 year old Mexican. The examples are without number, but our society is the worse for all the “diversity” and “progressive values” that have been imposed by legislative mandate and political correctness.

    1. Klassy!

      What “legislative mandate” are you talking about?– More like lowest common denominator capitalism. Do you really think big box home center is going to pay for a carpenter with 18 years experience to sell you lumber? As for the nose rings and tattoos– that is more about someone choosing a pretty conventional way to signal their “unconventionality”. That’s our capitalism at work too.

      1. JTFaraday

        Odds are, if they hired a craftsperson with 18 years experience, they wouldn’t know what to do with them.

        But, if one does need said craftsperson to stack one’s dead trees then one should probably pay for it.

    2. Wat Tyler

      So, the decision of business to replace qualified, reasonably paid employees with part time minimum wage serfs is a “progressive value” and “imposed by legislative mandate”.

      Hope you didn’t hurt yourself twisting reality to fit a right-wing framework. FOX News would be proud.

      Jim

  36. Brooklin Bridge

    Rambling

    It’s hard to say about the restaurants; if you’re in a good mood, it tends to be a more pleasant experience, if not, not. And since the war in Iraq, actually since the stolen election in 2000 but for the wrong reasons, I’ve been in a crappy mood.

    But it’s a lot easier to be objective on tools. In this country, they suck, period. Vice-Grip is an excellent example of a tool that has gone from superior “American” quality at an amazing price (for what you got) to basically an expensive piece of trash that works for week end warriors only. A farmer/blacksmith named Peterson invented self-locking pliers, later to be called Vise-Grips, and he would never budge an inch on quality, even when his venture got to be big business and he had a bunch of suits telling him it was absolutely necessary. So for years and years you had a product that had an unusually high quality for the price you paid. When he died, his family more or less kept the quality, but eventually they cut corners. It was still a high quality tool. Then they sold out in the 90′s I think and it really started going down hill. I imagine it’s owned by the Chinese now and the tool is basically worthless except for home use. Anyone can verify this simply by going to a metal working or welding shop where they beat on those things.

    My hardware store sells junk. Pure junk. Everything except for a few foreign made electric saws by Makita. When I buy tools in France, particularly from some of the smaller old fashioned hardware stores (les quincailleries) that are made in Germany (the tools that is), they are hands down better than anything one can buy over here. But globalization has had it’s effect in France as well – it seems just about nothing is made there anymore – and people are basically sold junk. Back in the seventies, there used to be a tiny section of Paris – in the Onzieme arrondissement I think, where these old fashioned hardware stores sold amazing hardware; practically hand made. Some sold tools others high end furniture hardware, but it wasn’t to yuppies, it was to tradespeople. It would be interesting to see if any of them even existed now(I suppose if they do they are all decked out for the uber rich Parisian – like an art gallery). One of the last things that really remain high quality and democratic in France is the cheese. You can still find amazing cheese just about everywhere. Wheat has been going down hill (and is a highly studied product – people write their dissertations on wheat and bread in France) since the first world war and so has bread, but again it is very hard to be objective when you have nothing to compare it to. If you could taste a baguette from the 70′s it would be distinctly different (better) than what you get now or (worse) than what you might have gotten just prior to WWII. But the quality of things in general in France has been going down really fast in the last thirty years, ironically staring around the time Mitterand, the so called socialist, was elected president, and then making another big jump (downward) around 15 years ago and again about 7 years ago.

    You can still find amazing restaurants in the country in France, however, particularly if you have local knowledge through family or friends. You can get the kind of quality you would only find in a city such as New York over here and only if you had the kind of money to go to them and the kind of friends who had enough money and time to knew where they were. Of course you can also find such restaurants and better (food for the 0.001% gods) in Paris and Lyon and other cities, but they are out of my league. But even in France it would be incorrect to say that every restaurant is a good one. In the last 20 years, most have become like American restaurants have been for the last 50 years; pure veneer, not even good home style cooking. The only difference is that in France even the most modest restaurants have taken to presenting a high end menu (probably so they can charge outrageous prices) so now-a-days it’s hard or impossible just to find a simple “casse croute” or sandwich “au jambon”, and instead you have to sit down to pre-made frozen dishes zapped in the Microwave but with very fancy names. In a typical start up, a good chef is hired for the first 6 months, then a second tier chief, ultimately your son’s high school buddy who needs part time work.

    On Wall Mart, I’ve spent a good of my life just making ends meet (or not) and yet I have rarely, ever gone willingly into one of those giant human fly traps and I have been amazed at the fact that others considerably smarter than I, and others with more smarts AND/OR more money, just can’t seem to resist them. It’s another one of those things – something so obviously self destructive – that makes me wonder if we are really equipped to make it as a species.

    1. Susan the other

      Longing for customer “service” is an example of pure nostalgia. ‘Twas gone decades ago and replaced by vacuous attentiveness or unsatisfying computer screen inventories for your convenience. I don’t think customer service was ever very good. Now it is a joke. And speaking of viable commercial models – where in nature is there a viable model of centralized distribution (isn’t that an oxymoron?) or vertically integrated supplies? The whole thing is a fabrication. In the end we are still mortal, we still live within an ecology of life and energy. Don’t tell the banksters. They will be the ones who go down last, but never come back.

  37. Hugh

    It is interesting that no one has mentioned kleptocracy in this thread, but looting labor is a prime target of it. Cut staff and increase the work load on those who remain increases efficiency. Cut staff and cut wages and benefits of those who remain increases efficiency even more. Efficiency does not mean what we think it means. In a kleptocracy, efficiency is code for looting. Productivity is code for looting. GDP is code for looting. We have been trained like Pavlov’s dogs to believe that they are about making more and better and so must be good. So we are torn between the reality we experience where these are evils and the ideas they represent that we feel must be part of a well run economy.

    Again all of this comes about through the very deliberate divorcement of the economy from the reason why we have an economy, that is to create the society we want for ourselves and each other.

    In kleptocracy, it is always about the looting, and looting is inherently at odds with efficiency and productivity in the real economy since a well run economy would have very little scope for looting.

  38. LillithMc

    CA central valley has a large supply of fresh veggies. Wal-Mart sells toxic GMO corn they refuse to label. COSTCO sells large packages good for large families. Dollar Store sells surplus fresh produce in bags for $1. They blend the “big oil, big box” system with the local economy at a great price. The other “trendy” boom are the thrift stores next to up-scale empty malls and empty foreclosed houses where their “goods” had to be tossed quickly before the sheriff locked the door.

  39. KFritz

    Andre Soltner of “Lutece” fame said many years ago that the level of service performance in the US had deteriorated since he arrived ca 1960. (I think in “Parade” magazine.) Someone who has the opportunity might ask him whether he thinks the situation has worsened since then, and also whether there’s been a proportional degradation in Europe.

  40. Hugh

    I just wanted to add that I am amazed that our economy still functions at all. What this thread has been about are the cracks and fissures that are appearing everywhere in it. The usual counter-argument is that there have always been cracks and fissures. The economy has never been perfect. It is all a way of saying that this time is not any different, that we are just going through a bad patch. A few tweaks here, a few reforms there, and it will all be as right as rain.

    Except more and more of us are coming to realize that it won’t. These aren’t isolated failures and shortcomings. They are systemic. They aren’t getting better. They aren’t becoming fewer. They are becoming more numerous and getting worse. We are well past the point of tweaks and simple reforms. Yet what is more alarming is that no one is trying even those. It is all window dressing, speeches unbacked by any action, bills that go nowhere, and solutions that are specifically designed to make matters worse. It must all fall for the simple reason it can not stand. The fall has already begun. It is what we are seeing now. Far from escaping history or ending it we are repeating its worst lessons.

    1. Susan the other

      Patisans can occupy all the Wallmart stores, set up their own fleet of delivery trucks, contract with the Chinese directly, and with the locals. Start over.

    2. Bill Smith

      The globalization snake has been eating its way up its own tail for a long time.

      And if we brought back the mom&pop hardware store selling Chinese nuts & bolts, hammers and sickles, with service and a smile….the problem doesn’t go away.

  41. Brooklin Bridge

    The building industry is another thing that is going to be fascinating to watch in its slow demise. Right now, there are more building codes even for small residential buildings than you can shake a stick at and the industry combined with government is generating them faster and faster to the point a construction company practically has to hire a full time employee to do nothing but keep up with them all. It doesn’t require a genius to see that it’s just part of the looting, the elimination of small Mom and Pop contractors and the requirement that all sorts of expensive repairs be made for compliance to code. Compliance, and compliance is mandatory, adds a huge amount to the cost of building and renovation. This will continue to spiral out of whack even as people can simply no longer afford such over built, magnificent houses with their super duper high tech materials and low energy needs.

    And I haven’t even touched upon the horrors of our intrepid government keeping lead based paint legal until the late 1970′s (even though they knew it was really bad for people for over a hundred years prior to that) and then suddenly pulling the rug out from under the homeowner and small investor and insisting that they get Mafia priced contractors in to delead their houses.

    So on the one hand, you have an amazing explosion in the technology of building and on the other hand you have a less and less people able to afford it, even for repairs. And as the middle class disappears, the Federal, State and local legal mandates and codes just keep on blossoming like poisonous flowers. So one wonders at what point people will start simply making their own nests again out of whatever is handy while local inspectors go running around declaring them illegal.

    1. Brooklin Bridge

      Oh well, at least the inspectors will have drones to help out with enforcement.

    2. Massinissa

      Isnt that what usually happens in places like Africa and South America?

      I wonder if its only a matter of time before we see Brazilian style slums eh?

      1. LillithMc

        Brazilian style slums would be an improvement over the homeless camps in Sacramento who are raided with their tents taken and given citations for being homeless.

        1. Brooklin Bridge

          Absolutely, and I would rather live in a Brazilian style slum any day than in a privately run slave labor prison, which alas, seems to be the other ‘planned’ alternative to unafordable housing.

          1. Ms G

            Brooklin — did you see where the head of NYCHA (one of Bloomberg’s more third-world-style corrupto’s) has “unveiled” the proposal to solve NYCHA’s “budget problems” (similarly fictive as the federal “deficit”) by — get this — selling the park space in the public housing complexes to private developers to build luxury condo skyscrapers. The particular complexes being targeted are, of course, ones in “desirable” neighborhoods, e.g., Chelsea, the lower east side by the East River, etc. No plans (yet) for the NYCHA complexes in the far reaches of the Bronx or Harlem.

            Yes. This is what the late-stage acceleration of kleptocracy looks like — on the ground here in NYC.

          2. Brooklin Bridge

            No, I hadn’t heard about it. Unbelievable crazy. I’s simply amazing – there is just no end to it.

  42. Eric377

    In regards to restaurant meals, I don’t mean to be churlish, but your complaints might well be attributable in some measure to aging. First, experience can be a burden. The brilliant, exquisite meal of 1988 might be reproduced with tremendous fidelity, but the fact that the meal was already enjoyed in the past will mean that the same experience cannot be enjoyed as much today. Novelty has its own thrill and an additional 30 years of experience makes novelty harder to come by. Second and third; sadly the senses of taste and smell frequently diminish in acuity over the years. Pancakes enjoyed with true friends remains a touchstone for me.

  43. Ed S.

    Yves:

    Excellent article and interesting comments. Here are a handful of anecdotes:

    Service at the mega-banks has declined dramatically in the past 20 to 40 years. When I moved to California (about 8 years ago) I selected one of the megabanks for my financial needs. The offices were always well staffed and the employees super-friendly (it was like walking into “Cheers”) – unfortunately they were, to a person, incompetent. And not in big things – things as simple as putting money in the right account. The final straw was when I had a five figure fraudulent withdraw made (from 3 different accounts) on the other side of the country. The “banker” who was closing all of my accounts (five in total) said (not a paraphrase), “Hey, don’t get an attitude with me – I’m not responsible for your problem”. And he didn’t even transfer the money into to the correct accounts. Now with a smaller bank (5 offices) – it’s like 1992. People know what they’re doing and are happy to help you (and I’m not a big depositor).

    Restaurants are more interesting – I think that many of the “high end” places (I seldom frequent) are more about a) seeing and being seen, and b) a status marker. About two years ago I had the opportunity to go to Michael Mena’s in SF – beautiful place, excellent service, food well presented – but overall just an ordinary experience (priced at $150/person plus dessert and drinks). Now I’m a bit of an outlier – father was in the restaurant biz and I (and my spouse) are pretty good cooks (not foodies, though). But I think that many of the high end places survive on reputation than on actual food quality. Many better meals at “mid-tier” places. Almost all chains are horrible.

    And tools – the great thing about tools (hand tools, primarily) is that if you snoop a bit there are plenty of available used tools from 50 or even 100 years back. Also, there’s been a resurgence in quality hand tool manufacture – really artisan level stuff. Not cheap – but you buy it once and it lasts for 2 or 3 lifetimes. I recently purchased a tool from a VERY small enterprise – traded 5 emails with the owner and had all my questions answered. And this was for a $100 purchase.

    Generally, some service is excellent, some is absolutely terrible. The BigCo’s generally are terrible (and what do they expect – lousy wages + poor working conditions + obvious exploitation does not equal happy employees. If you don’t give a crap about the employees who deal with your customers (and it’s apparent), why exactly would you expect them to care about your business?

    1. sufferinsuccotash, moocher

      That business about restaurants isn’t new. In France it’s often the case that places with only one star in the Michelin are better than two or three-star restaurants for the simple reason that, like Avis did once, they try harder.

  44. chicagogal

    When I was moving last fall, I wanted to spare my aging cat the insanity of moving day and called her vet to arrange for boarding during the last few days of the move. She had gone to this vet for about 4 years and I had never had a bad experience. In fact, I honestly thought we had a very good relationship! It’s a small cat-only place run by a husband/wife team, but they had added a third doctor and some new office staff last year. One of the new people answered the phone that day and told me the boarding policy had changed at the beginning of the year – this was the end of October – but they chose not to inform any of their customers unless/until they needed the service. I had no problem with the change, but we ended up in one of those stupid circular arguments about the lack of notification and I finally asked for someone else to call me back to finish the arrangements. I even told the person that the proper answer to my questions was that she would inform the doctors about my concerns and finish setting things up. Got an email the next day (Saturday) that they tried calling me back and couldn’t get through. My response was that I would make other arrangements because of the problem with that first person and that something simple ended up in a bad customer service experience, but that I hoped we could move forward because they had always provided good care. End result was that I got a very juvenile email a few days later saying my cat was no longer welcome there (ever) and suggested I take her to a very expensive vet about 10-15 miles away. There was no discussion with me about what happened and they refused to call me back when I requested that. To top it off, the email came through on the actual moving day and it was my cat’s birthday.

    It’s very distressing to continually encounter bad customer service when it’s really such an easy thing for a company/business to do!

    1. bob

      Just another “customer”.

      You wanted to spare your cat insanity, but then threw a bunch of it at some poor people who appear to be making a very valid business decision — you aren’t worth the trouble.

      Not your cat, you.

      1. bob

        That was over the top and just plain mean, I apologize.

        I think the “everyone is a Customer” attitude is realated, and possibly more harmful than devolution.

        If you are looking for better service, and not an object of abuse, smile and *ASK* for help. You’re much more likely to get what little attention they have if you’re not yelling at them and telling them how to do their job.

        Part of the crush of the ‘service’ industry is that their boss tells them how and under what circumastance, to do their job — not the ‘customer’.

        1. chicagogal

          Thank you for the apology. I had no problem with their change in policy and thought it was actually a good change. The problem was in the lack of communication about that change. In the almost 11 months since it started, I had received electronic newsletters and had several appointments. As someone who had used their boarding services before, it just seemed like a bad idea to not notify their clients when setting up an email notification, putting it in their newsletter and on their website and Facebook page were such easy solutions. The stupid circular argument came about because the person I was speaking with copped an attitude and dug in her heels about it instead of acknowledging my point. It’s so simple to say something like, “I understand and will convey your concerns to the doctors. Let’s get you set up for the boarding now.” That’s really all it takes, but I run into the same lack of courtesy almost everywhere these days. That the doctor with whom I had a longstanding relationship, and who knew me pretty well, to not even be willing to discuss the situation was mystifying. From a business perspective the owners should want to know when something like that happens because they could lose other clients and never know why. What’s done is done and we’re seeing a new vet now who just helped me bring my cat back from a possibly fatal downward spiral – and at much less cost than the prior vet charged.

    2. traveler

      This is a lack of civility and consideration – the former from the person you spoke with and the latter from the vets. You and your cat are probably better off going elsewhere.

  45. allcoppedout

    I note the academy I was reasonably OK with started the declined to today’s certificates for $100,000 debt and no decent job via customer service and students as clients rhetoric.
    On problems with the critique being 200 or 2500 years old we might start looking at the real conditions without economics and work with what emerges. To me as scientist, economics remains largely uniformed by science, particularly the dynamics of productivity-technology and biological systems.

    Morally, I doubt we should expect customer service from someone being ripped-off by poor wages and conditions.

  46. William

    Thanks Yves for the really interesting Walmart developments. As for service quality, I’ve found that locally owned establishments that hold to and promote values of respect toward their workers, local sourcing, local events and talent, organic/local foods, typically attract service workers of a very high quality, who are obviously energized to be working for a business with such values. The energy they bring to their work is amazing. I think many young people are yearning to work in places that promote community and not just sterile corporate stores.

  47. Otter

    Bank bailouts, as you have sometimes noted, are not structured to recover the most revenue. They are structured to cause economic collapse… poverty.

    Walmart’s largest result is not profit, but economic destruction… poverty.

    The reaving of the middle class creates more poverty than wealth.

    They are very efficiently impoverishing your whole life.

    Full-Spectrum Dominance, War by Other Means, The War on People.

    1. Ms G

      The War of the Elite Kleptocracy and its Government Handmaiden against the people is a phenomenon that can only be described as Domestic Terrorism.

  48. skippy

    Thought this need to be a stand alone comment, insert any name where fish is detonated _____ resources, to include humans…

    “Until the late 19th century, the fish resources of the world’s vast oceans were thought to be essentially inexhaustible, even by the most prominent biologists [Smith, 1994]. As the fishing industry expanded and technology made larger catches possible and more areas of the ocean exploitable, the received wisdom that fisheries were inexhaustible soon became discredited. FAO estimates that 25% of the world’s fish stocks are currently being fished at an unsustainable level [FAO, 2007:29], thus risking collapse.

    Fish are a common pool resource, meaning that it is difficult to exclude users and that exploitation by one user reduces the resource availability for others [Ostrom et al. 1999]. Common pool resources are found when a system of individual property rights is insufficient for sustainability or too costly to implement [Bromely, 1991]. Furthermore, in many cases, especially in long-distance fisheries and in developing countries, they are effectively an open access resource, meaning that a system of property rights is completely absent and thus the fish can be caught by anyone.

    When common pool resources are valuable and open access, overexploitation is inevitable because users have no incentive to conserve when the fruits of such conservation can simply be 1 Kjellrun Hiis Hauge, Institute of Marine Research, Bergen, Norway; Douglas Clyde Wilson, Senior Researcher and Research Director at Innovative Fisheries Management, Aalborg University; Belinda Cleeland, project officer, IRGC.” -snip

    Read more at http://www.nakedcapitalism.com/2013/04/more-on-devolution-and-the-walmartization-of-our-economy.html#u8jvsEVPwzwj85WE.99

    Skippy… Walmart et al are like super trawlers… now why did the Somalis start hijacking ships… oh yeah… their fish were stolen… Kinda like desuetude people hijacking rail – trucking freight – depots… sigh.

  49. skippy

    Walmart on the road…

    Entertainment

    In 2010, the company teamed with Procter & Gamble to produce Secrets of the Mountain and The Jensen Project, two-hour family movies which featured the characters using Walmart and Procter & Gamble branded products. The Jensen Project also featured a preview of a product to be released in several months in Walmart stores.[124][125] A third movie, A Walk in My Shoes, also aired in 2010 and a fourth is in production[when?].[126] Walmart’s director of brand marketing also serves as co-chair of the Association of National Advertisers’s Alliance for Family Entertainment.[127]

    Corporate affairs

    Walmart Home Office in Bentonville, Arkansas

    Walmart is headquartered in the Wal-Mart Home Office complex in Bentonville, Arkansas. The company’s business model is based on selling a wide variety of general merchandise at “always low prices.”[9] They refer to their employees as “associates”. All Wal-Mart stores in the US and Canada also have designated “greeters” at the store entrance, a practice pioneered by founder Sam Walton and later copied by other retailers. Greeters are trained to help shoppers find what they want and answer their questions.[128] For many years, associates were identified in the store by their signature blue vest, but this was discontinued in June 2007 and replaced with more modern and professional khaki pants and polo shirts. The wardrobe change was part of a larger corporate overhaul for the store in an effort to increase sales and rejuvenate its stock price.[129]

    Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear in the store.[130] Instead, it focuses on selling more popular products and provides incentives for store managers to drop unpopular products, as well as asking manufacturers to supply more popular products.[130]

    On September 14, 2006, the company announced that it would phase out its layaway program, citing declining use and increased costs.[131] Layaway ceased to be offered on November 19, 2006, and required merchandise pickup by December 8, 2006. Wal-Mart now focuses on other payment options, such as increased use of six- and twelve-month, zero-interest financing. The layaway location in most stores is now used for Wal-Mart’s Site-To-Store program, which was introduced in March 2007. This enables walmart.com customers to buy goods online with a free shipping option, and have goods shipped to the nearest store for pickup.[132]

    Maggie Sans, representing Walmart, sat on the Private Enterprise Board as Secretary of the American Legislative Exchange Council.[133] On May 31, 2012, Walmart announced they were suspending their membership in the organization.

    Sans said:

    “Previously, we expressed our concerns about ALEC’s decision to weigh in on issues that stray from its core mission ‘to advance the Jeffersonian principles of free markets.’ We feel that the divide between these activities and our purpose as a business has become too wide. To that end, we are suspending our membership in ALEC.”[134]

    Finance and governance

    For the fiscal year ending January 31, 2011, Wal-Mart reported a net income of $15.4 billion on $422 billion of revenue with a 24.7 percentgross profit margin. The corporation’s international operations accounted for $109.2 billion, or 26.1 percent, of total sales.[2] It is the world’s 18th largest public corporation, according to the Forbes Global 2000 list, and the largest public corporation when ranked by revenue.[135]

    Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. Michael T. Duke serves as Chief Executive Officer (CEO), and Lee Scott, formerly CEO, serves as Chairman of the Executive Committee of the Board. Other members of the board include Aída Álvarez, Jim Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas Daft, David Glass, Marissa Meyer, Gregory B. Penner, Allen Questrom, Arne M. Sorenson, Jim Walton, Christopher J. Williams, and Linda S. Wolf.[2][136] Sam Walton died in 1992. After Walton’s death, Don Soderquist, Chief Operating Officer and Senior Vice Chairman, became known as the “Keeper of the Culture.”[137]
    Notable former members of the board include Hillary Clinton (1985–1992)[138] and Tom Coughlin (2003–2004), the latter having served as Vice Chairman. Clinton left the board before the 1992 U.S. Presidential Election, and Coughlin left in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart.[139]

    On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay US$411,000 in restitution.[140]

    Skippy… LOOK….. at all those ***board members*** ROFLOMAO…. Hio Hillary… snicker.

  50. reason

    I think you are concentrating here on the wrong issue.

    The problem is the word “efficiency”. It isn’t well defined at all. There is a general issue that any target that isn’t the real target, becomes gamed, and ceases to represent the target after a while.

    What is the economy ultimately trying to produce – and with what? It should be obvious that in terms of any sensible end target (general prosperity while maintaining the natural environment as much as possible), we are heading the wrong way. The system needs retargeting.

    1. reason

      There will always be moves up and down market available as strategies to firms, and firms to occupy such niches. Product quality may be declining, but my guess is that that is because the customer base is getting poorer, or those reporting on it (consumer magazines) are doing a poor job.

  51. Serf Music

    A big part of the Walmart business model has been that shoppers would travel greater distances to get to their stores in exchange for lower prices and one stop shopping. The problem is that with the price of gas being as high as it has been for the past 6,7,8? years, even moderately intelligent people have figured out that it isn’t worth the trade-off. So if you go to Walmart today you are going to be shoulder to shoulder with the stupidest people in the land. And I didn’t even mention the concern that even “moderately intelligent people” have about risking additional repair and maintenance costs by needlessly racking up unnecessary mileage on their cars – especially when living the “new normal” 21st century month-to-month and hand-to-mouth “lifestyles”. At this point, truth in advertising would dictate that a better name for Walmart stores today would be MoronMart.

  52. Lafayette

    Machs nixt.

    If consumers cannot find a product at Wal-Mart, they will find it elsewhere. So, economic Supply & Demand – the heart of any Market Economy – is not perturbed.

    Wal-Mart did not invent cost-cutting, first-to-market, and the China Price. They did take superb advantage of all three. And, of course, Real Competitors have simply imitated their tactics.

    Having visited several on recent visit stateside, I cannot imagine a more inhospitable store antiseptic of any warmth whatsoever. Huge amounts of products and not a friendly face in sight.

    I found the experience entirely disagreeable and now understand why Wal-Mart never made a go of it in Germany and had to leave. Almost certainly, Germany unions were to blame as well – they would not kowtow to Wal-Mart.

    And if there is “union problem” in the US, it is one of inactivity and inability to assemble its battalions. Were unions more militant, they would probably have more members and Wal-Mart more people working there. The unions would call the tune and Wal-Mart would dance or close the dance hall.

    I don’t know what has happened to American unions. I do know that union membership is higher in the US than in France. But when the unions organize a demonstration, thousands of people (union members and just sympathizers) flood the center of town. The parade gets prime-time attention.

    Why? Because most French understand that unions are the spearhead of any meaningful and workable contention with Management – since American work-laws are dysfunctional or non-existent.

    And Americans perhaps think they don’t “need a union” and it is just as well that someone else bothers to demonstrate on prime-time TV.

    That’s not the way effective employment protection works, however …

Comments are closed.