Lynn Parramore: Obama Nominates America’s Biggest Walmart Cheerleader as His Chief Economic Adviser

Yves here. The prospect that Jason Furman was being elevated to chairman of the Council of Economic Advisers elicited cheers from members of the Vichy Left, such as Jared Bernstein. It’s worth noting that Bernstein with Josh Bivens did a full bore takedown of the Furman paper that tried spinning Walmart as a benefactor of lower income groups.

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

On June 10, 2013, President Obama announced his intention to nominate Jason Furman to become the next chairman of the Council of Economic Advisers. This is a big-time, highly influential post. So what kind of economist is Furman?

One who thinks Walmart is the best thing since sliced bread.

For Furman, Walmart is nothing short of a miracle for America’s poor and working-class folks. For him, progressives should be cheering the firm: he even wrote a 16-page paper titled, “Wal-Mart: A Progressive Success Story,” which was posted on the Center for American Progress website. Here’s a sample of Furmanomics:

By acting in the interests of its shareholders, Wal-Mart has innovated and expanded competition, resulting in huge benefits for the American middle class and even proportionately larger benefits for moderate-income Americans.

Furman has championed the company’s low prices as a big boost to lower-income folks, and views Walmart jobs as good opportunities, never mind the low wages. In 2006, Jason Furman wrote a letter to author Barbara Ehrenreich, published on Slate, in which he extolled the Walmart business model:

A range of studies has found that Wal-Mart’s prices are 8 percent to 39 percent below the prices of its competitors. The single most careful economic study, co-authored by the well-respected MIT economist Jerry Hausman, found that grocery sales by Wal-Mart and other big-box stores made consumers better off to the tune of 25 percent of food consumption. That doesn’t mean much for those of us in the top fifth of the income distribution—we spend only about 3.5 percent of our income on food at home and, at least in my case, most of that shopping is done at high-priced supermarkets like Whole Foods. But that’s a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income—unless the family lives in New York City or one of the other places that have successfully kept Wal-Mart and its ilk away.

In Furman’s view, “the US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous.”

For the man who will have President Obama’s ear on vital matters like jobs, the evidence of whether Walmart’s wages and benefits are substandard is “murky.” And he doesn’t much care for those who question Walmart’s approach: In the 2006 dialogue with Ehrenreich on Slate, he upbraided activists who had pushed the firm to increase wages and offer better benefits:

The collateral damage from these efforts to get Wal-Mart to raise its wages and benefits is way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing ‘Kum-Ba-Ya’ in the interests of progressive harmony.

Unsurprisingly, most progressives do not share Furman’s rosy view of Walmart. As activist and philanthropist Leo Hindery, Jr. wrote in his article “WalMart’s Giant Sucking Sound,” the company’s business model has been detrimental to the American economy and sucks the vitality our of our communities. Yes, Walmart has lowered prices for American customers, though not as much as Furman claims, but it has also helped to kill the American labor movement which ensures workers a fair shake, it has helped to send jobs overseas, and it has instilled practices, like relying on part-time employees whose wages are so low they can’t sustain themselves without relying on government assistance, that spread misery everywhere. In the maniacal quest to lower prices, it has pioneered the use of ever-cheaper materials and lowered the quality of consumer goods. It has been accused of predatory pricing, a practice in which a business sets a price on an item very low, even incurring a loss, in order to drive a competitor out of business and establish a monopoly. In emphasizing shareholder value over all else, it has forgotten its responsibiltiy to other stakeholders in the company, like workers or taxpayers whose investments help the company succeed. The negative impact of Walmart’s business model impacts people whether or not they shop at the store, a phenomenon explored by Charles Fisher in his book, The Wal-Mart Effect.

Progressives may be unhappy about Obama’s choice, but conservatives are tickled pink. Over at the American Enterprise Institute, home to the country’s most fervent free-market fundamentalists, no fewer than 11 economists have announced their support for the Jason Furman nomination:

We are pleased that President Obama … nominated … Furman …Although we often disagree with the administration’s policies and differ with Jason on a number of issues, we respect him as a superb analytical economist. If the Senate confirms his nomination to be the president’s chief economic adviser, we are confident that he will serve the president and the nation with distinction.

‘Nuff said.

Print Friendly, PDF & Email


  1. Dan Kervick

    There is no social value modern neoliberal man won’t trade away for cheaper consumables: freedom, equality, democratic governance, dignity, solidarity, decency.

    1. jake chase

      Walmart is exactly what anyone who really understood monopoly capitalism would have predicted. You want low prices, you want shoddy dreck, you want disgraceful working (and shopping) conditions, you want toxic materials, WMT gives you all that, and it makes certain that fewer people every day, month, year can afford anything else.

      Who knows, eat enough shit and maybe you will get to like it? Don’t forget, it worked with cigarettes, coca cola, potato chips……

      1. craazyman

        Potato chips aren’t bad. I like the barbeque flavored ones, and the “sea salt with vinegar”. Even the “coarse salt and ground peppper” flavors.

        I’m spoiled now and can’t eat the plain ones anymore.

        They get expensive, at #3.89 a bag, but when you’ve got da munchies for some crunchies it just doesn’t matter.

        The only thing that pisses me off is the chips-to-air ratio in the bag. Sometimes it’s ridiculous. The bag is like a big whoppee cushion with just a few chips floating around inside. I can go through a whole bag in about 10 minutes.

        1. jake chase

          You can extend the flavor by chewing on the bag, which is just as tasty, crunchier and probably equally good for you.

          1. craazyman

            sometimes the bag is all there is.

            I brought home a foot-long Subway tuna sub the other night and stopped by the corner grocer to get a bag of chips — just to make it totally delicious.

            There was a whole display, small bags mostly.

            Each one was almost nothing but air. $1.39, $3.99. Nothing under $1.

            You’d pick the bag up and it would almost float like a baloon. If you shake it, it’s clear there was only one mouthful of chips in each bag. Maybe 25 or 30 chips total.

            I mean really. This is ridiculous. I was able to resist the impulse purchase based on financial analysis.

            But If you buy a big bag at Wal-Mart for $4.99 with say 300 chips that’s a problem because once you start munching it’s very hard to stop and you go through the whole bag.

            If you add bong hits and beers that’s a few bags a week. AFter a while it adds up.

            Once Wal-Mart harvests its customers there won’t be anything left except bloated corpses and ripped empty bags of potato chips, the silvered inner liners exposed and flashing in the sun as you walk around surveying the catastrophe.

    2. Doug Terpstra

      Amen. And let’s not forget the foundation for all the social values you listed — privacy. Invasion of privacy by the state is the ultimate triumph of the fascists.

      The Neocon-in-Chief, a neoliberal in progressive drag, has finally completed the Shock-Doc coup with the illegal surveillance state. This is the inescapable architecture of oppression, a house of glass and mirrors (you can check out anytime you like…). Your every utterance and every keystroke can now be used against you in perpetuity, retroactively, by any politician, corporation, or IT technician from now to the end of your (un)natural life. Most parboiled frogs have yet to grasp the enormity of this.

    3. Susan the other

      It’s amusing that Walmart is in denial that its business model is a suicide model. I’m enjoying that part. Walmart is corporate productivity on steroids. There could be method to Obama’s madness. FDR appointed Joseph Kennedy to head the SEC in a former epic of pillage.

    4. mac

      If I buy a national brand of an item at Walmart and it has a lower price than for instance Walgreens, how then does that become a shoddy product?
      Go to Walgreens, Target k-mart etc and find a given product is it only shoddy at Walmart?

  2. Old Hickory

    I wonder when the plurality of intelligent Obama supporters will finally see that the president is just not worth supporting at any level, for any reason. Ezra Klein is in agreement with the conservative commetariat that Furman is, as Parrimore puts it, the best thing since sliced bread. Appalling. When faux-left and idiot right are in agreement about something, it’s a really bad sign.

    1. NotTimothyGeithner

      Rank and file Democrats for the most part represent team sports fanatics and people who vote Democratic for more simple reasons such as they’ve been voting that way all their lives. If they had more time, they would pay more attention. Obama will be tossed by the team sports fanatics the second they realize he is no longer good for the team’s sense of self worth, and the second group could care less about Obama going forward. He will never be another ballot again.

      Between Obama’s disregard for the Constitution, attacks on Social Security, and his general warmongering, Obots are spending most of their time rationalizing and defending rather than organizing.

      Yesterday, Virginia held primaries for November elections. The Obama-affiliated/minority candidates both lost in the bluest parts of the state. They won in rural Virginia which wasn’t enough for them to win, but Obama’s sheen isn’t working in a state which delivered a huge victory for Obama against Hillary in 2008. To play Devil’s Advocate about my own point, both Obama affiliated candidates were terrible. I despised the Lt. Governor candidate since 2005 when I was still a lunatic Democrat. I thought he was a sleazy corporatist then. The Attorney General candidate ran a campaign which stood out among crummy campaigns for being really crummy.

        1. NotTimothyGeithner

          From my perspective there are no Obama-affiliated candidates who can pass muster, but the lesson is still old white guys beat young/minority candidates with credible histories and strong Obama affiliations in what should be Obama’s strongest areas of support in an election where one push in one precinct could have resulted in a blowout. The Obama sheen didn’t drive people to the polls. In some ways, the Obots are already bored of Obama.

  3. Paul Tioxon

    O come on, nobody tops the Arkansas Duo for Wal-Mart cheer leading! Hillary was on their Board of Directors! I mean, seriously, they have low prices, yeah, they sure do, they don’t sell all of that stuff because of stripper cashiers! A Gov from Arkansas becomes president, 2 times and now his wife is about to assume the oval office and the state is the HQ of Wal-Mart?? Thank god this dude is only an adviser and not the decider, or else Wal-Mart might out price the NSA, then where would we be? Our intel fabricated by huge campuses of People’s Army Hacker Battalions and then sold back to us, via Bentonville, AK. Watch Booz Allen Hamilton, there’s a blue light special about to take your lunch, and dinner and brunch.

    1. Yves Smith Post author

      Oh, I bet that Walmart operates just like big real estate players, they stake all the serious-looking players and throw more money at the likely winner(s). They can’t afford not to.

  4. larzo

    Walmart employees have been on strike. And lots of people know, this is so shameful. Shame shame shame. Let’s talk about Walmart’s clothing being made in the Bangladeshi factory that collapsed killing over 1100 people as well as the fire and deaths before and their shoddy practives overseas and at home. This is so seriously offensive. You hit the nail on the head Dan. One word: Hubris It will defeat itself

  5. Anonymous

    I blame all of the fucking liberals who voted for Obama. Many of them justified their votes by coughing up the excuse that Obama was the “lesser evil” compared to the Republicans. Now, many of those same liberals are bitching about Obama’s right-wing, Republican-lite policies and appointments. Well, what else did you fuckers expect? When you vote for the lesser evil, you’re still voting for an evil. So please don’t whine and bitch about the evil that you voted for!

    1. Yves Smith Post author

      Daily Kos is over there. This site was very critical of Obama and Obambots in 2012 and regularly took issue with the “lesser evil” meme.

      1. psychohistorian

        The “noise level” is rising a bit.

        I hear there are growing careers in propaganda available for those w/o any humanism. Its too bad they don’t understand that ultimate competition produces only one winner. And it probably is not humans.

    2. Massinissa

      Uh, most of us either didnt vote or voted Green or something.

      I at least voted Green. Several other people here did.

      If you want to bitch to obamabots, another site would be a better idea, I dont think this site even has any obamabot trolls, much less regulars. Perhaps DailyKos, as was said in another comment.

      1. AbyNormal

        actually, sounds like 0hedge lost its main circle jerk

        No drug, not even alcohol, causes the fundamental ills of society. If we’re looking for the source of our troubles, we shouldn’t test people for drugs, we should test them for stupidity, ignorance, greed and love of power.

    3. Doug Terpstra

      Hey, I like your attitude! (I assume your question, “what did you [phuckers] expect?” was not really addressed to NC readers, but to the credulous lesser-evilist flock at large. Many of us here were among the infinitesimal one-half-of-one-percent who voted for Stein.)

      1. Synopticist

        I was as close to an Obamabot as anyone that posts on NC,bit only because I fuc*ing HATED Romney.
        I have to say I had remarkably low hopes for his second term, but he’s still managing to disappoint them.

    4. Binky Bear

      Okay next time we all put “magic unicorn” in the write in part of the ballot because somehow the magic unicorn who makes everyone happy, keeps his or her campaign promises, and forces evil to kneel before him or her never seems to win. Do people just not know about magic unicorn? He farts rainbows and makes the elderly and infirm laugh; children are happy to see him and extremists abandon their deeply held beliefs before his sunshiney countenance.
      Next time, when its a choice between pure evil, moderate yuppie evil, and oblivion, choose magic unicorn. The world will thank you.

  6. middle seaman

    The content of the post is fine. The tradition of denigrating people you disagree with is wrong, poisonous and and uncivil. We got Obama due to poisoning Hillary. (Jammie Simon thanks us.)

    And it isn’t just Furman, it’s also Bernstein and from the remote bleachers we hear CDS all over again.

    Very low rotten tomatoes rating.

    1. Massinissa

      No offense, but im sort of doubtful Hillary would have been much different than Obama. She is still essentially center right economically. And dont forget she is essentially a warmonger.

      1. Chris Engel

        All indicators point to Clinton being worse than Obama.

        On a similar note, a lot of us have thought Warren would be a game-changer, but Lambert has pointed to some evidence to show she’s actually much more similar to the establishment than thought before (regarding Iran and other issues, dont have link on hand..)

        1. Massinissa

          They call it ‘hype’ for a reason.

          God knows enough people thought Obama would be a ‘game changer’.

          But yeah, as you said, Warren is unexpectedly hawkish on Iran and its nuclear program. That link by Lambert totally caught me off guard, though im not totally surprised. Most Liberals have become liberal imperialists recently. Another reason I no longer affiliate myself with that term.

    2. Strangely Enough

      With Obama, it was the warmonger we didn’t know. Hillary was quite known by that time…

  7. Kokuanani

    Please attach the “Vichy left” label to that slimeball Center For American Progress as well.

  8. psychohistorian

    The Walmart business structure is designed to operate as an international monopoly player in the retail world and they will continue to play labor markets off against one another even when it may not be in the best interest of its parent country…..all for the gawd of profit for the global plutocracy.

    We already have a world government by and for the inherited rich and we get to watch as they reek genocide on “those who can’t compete”.

    Is this the highest and best historical expression of our species? gag!

  9. Hugh

    I am working off of memory here, but the previous chairman of the CEA was Alan Krueger who has returned to Princeton. Krueger did a study where he showed that raising the minimum wage did not stifle job creation, but then he turned around and advocated diminishing unemployment benefits/the safety net to force more workers back into the labor force (into low wage jobs). I would describe Krueger as an Establishment liberal, that is a neoliberal with a few progressive twinges (See Paul Krugman for the epitome of the type.) I bring this up because Obama would never nominate a real progressive for any position in his Administration and no progressive would ever likely choose to work there. On economic matters, it’s pretty much neoliberals only.

    Still I take the point that Furman is even worse than Krueger. Besides the Walmart paper, he is a hardcore Rubinite having directed the Hamilton Institute.

    The thing is I am not sure how much Obama listened to Krueger or will listen to Furman. As with Geithner, Jack Lew at Treasury will be calling the shots on economic policy. Maybe even more so than Geithner. Gensler (whom I also was not that crazy about) is gone from the CFTC. The second team Zients is on at OMB. Ron Kirk is gone too as trade representative but his deputy Marantis was made acting head, and no change in direction is going to happen there. The free trader Gene Sperling is still on at the National Economic Council but as Obama has already embraced the Trans-Pacific Partnership I don’t know how much more he could add to it.

    So the turnover in the Obama economics team is just about complete, some new faces, some deputies promoted, no change in direction, and likely an even greater concentration of power at Treasury.

    1. Yves Smith Post author

      Correct, the head of the CEA is rarely influential. Look at Christina Romer. But the optics are still bad, um, predictable.

  10. Gerard Pierce

    Everyone here is just too darn nice. This appointment is simply that last in a string of decicions and appointments that have sold us down the river.

    It should be some kind of lesson to the surviving Obamabots, but it probably will be cited as one more example of Obama playing 12-dimensional tick-tack-toe.

    At this point, it’s time to call for Obama’s resignation – loud and often- and the resignations of anyone in politics who support him. He’s not a Democrat, let alone a progressive, and anyone that’s for him is against us.

    Whatever this kind of appointment means, it should no longer be treated as politics as usual.

    As far as WalMart goes, we should get some deluded Republicans to legislate a cutoff of all welfare benefits for anyone who works for a company like WalMart.

    1. Massinissa

      Uh, he IS a democrat.

      He illustrates more than anyone the moral bankruptcy of the ENTIRE party.

      But yes, hes not a progressive. Hell, I dont care much for the term Liberal these days, the term is stained beyond salvaging IMO, but I dont think Obama is one of those either!

    2. Doug Terpstra

      Well said, Gerard. Obama and his hardcore blue tribalists are more damaging than the GOP or the tea party.

  11. diptherio

    I assume this Furman fellow, being the excellent analytical economist that he is, foresaw the 2008 crisis and wasn’t one of those fooled by all that “Great Moderation” hype…right?

  12. McWatt

    What Walmart has really done is sucked the life blood out of small communities and sent their local dollars to China. In the small town where I am from there is no longer a full service grocery store owned by a local citizen that puts their money in the local bank and pays for the uniforms of the local baseball team and contributes money when a local family has a devastating medical emergency or extends credit to someone in temporary trouble.

    There is no longer a local appliance store that puts their money in the local bank stops by your house to help on a Sunday when the dryer is on the fritz and you have company coming and donated the washer and dryer at the school and contributed money so the marching band could go state.

    There is no longer an functioning operating hardware store because they are hanging on by a thread just about to go bankrupt.

    In fact the only thing that is succeeding in a once successful community is a restaurant.

    All this is happening at a time of unrivaled economic boom. Farmers are rich. These communities should be thriving. Instead they are dead.

    1. NotTimothyGeithner

      “All this is happening at a time of unrivaled economic boom.”

      Its a resource extraction economic boom which is a little different than an economic boom. Historically, Japan and New England which are arguably resource deserts have had some of the highest across the board standards of living and reduced wealth inequality because the only resource is labor and that can’t be monopolized. In the late/early 18th/19th centuries, European financiers flooded South America expecting resource-rich Argentina to become a colossus in the New World. Prices soared, and some people became rich. The USA is the USA, and Argentina can’t even grab the Falklands.

    2. A Real Black Person

      ” All this is happening at a time of unrivaled economic boom. Farmers are rich. These communities should be thriving. Instead they are dead.”

      I’m sorry, I find these statements to be not only false but contradictory. If one group of of specialized workers do well, in an area with low taxes, small government, and strong property laws, that doesn’t mean all groups of workers will do well.

  13. Lune

    It’s interesting that Walmart has become so big their success is starting to be governed more by macroeconomic forces than microeconomic forces. What do I mean? Well, for a typical single or small chain store, Furman is right: negotiating hard with your suppliers and cutting other costs (including labor) does lead to cheaper prices for your customers.

    But that’s only microeconomic, i.e. as long as you’re not big enough for your actions to affect the macroeconomic forces of your community. Because then, the principles get flipped around: since every person’s cost is someone else’s income, cutting costs to the bone is a net zero within a community since that means income as a whole has been cut by an equivalent amount. And to the extent that Walmart spends more of its money outside a community (e.g. by sourcing its stuff from distant suppliers, sending its profits outside the community, etc.) than a local store, it’s a net detriment to a community’s macroeconomy.

    Walmart is now big enough to be affected by the macroeconomic effects of its actions (e.g. impoverishing its own customers) while being less affected microeconomically (it’s so dominant in most communities that they don’t really need to compete on price / quality any more).

    Unfortunately for Walmart, I don’t think their corporate culture will allow them to recognize the macroeconomic forces that are rebounding with all their actions. They’ll just continue to cut and won’t understand why with each cut, even with cheaper prices, they’re ending up with less sales.

  14. curlydan

    And Furman can buddy up with Tom Cruise and Hugh Jackman as the latter two partied in NW Arkansas at the Wal-Mart annual meeting. Said Cruise:

    “Very pleased to be here. I truly admire your company, you know, and the more I learn about everything that you do, I’m inspired by what you all create every day, you know, because your company—I’m sure you all know this, but it is a role model for how business can address some of the biggest issues facing our world, you know, in ways big and small. And all around the globe, Wal-Mart is taking the lead and making a difference. And that’s something I really admire. You know, that this company does is it’s using its size and scale to improve women’s lives across the world.”

    Uh, Tom, I haven’t seen you in People of Wal-Mart pics lately. But I bet you sure got paid well to say all that.

  15. Eric377

    Let’s see: a Walmart job may be so poorly compensated that the worker may also obtain certain benefits owing to low income. So is that worker and the rest of society better or worse off if that worker quits? I assume they’d be worse off, else they indeed would quit. And I’d guess society is better off when a member takes a decision that does not leave them worse off.

    1. Hugh

      So if you release a virulent plague that kills a 1/3 of the population instead of one that kills 1/2, is society better off?

      It’s called a false choice, much like your argument.

  16. RGF

    I wondered for a long time how a discount retailer managed to make it into the Dow Jones INDUSTRIAL Average. But then I figured it out. Walmart is simply the marketing arm of China Manufacturing Inc. which IS and industrial company.

Comments are closed.