Photo Credit: Shutterstock.com
June 11, 2013
|
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.
Lynn Parramore is an
AlterNet senior editor. She is cofounder of Recessionwire, founding
editor of New Deal 2.0, and author of 'Reading the Sphinx: Ancient Egypt
in Nineteenth-Century Literary Culture.' She received her Ph.d in
English and Cultural Theory from NYU, where she has taught essay writing
and semiotics. She is the Director of AlterNet's New Economic Dialogue
Project. Follow her on Twitter @LynnParramore.
No comments:
Post a Comment