Wednesday, September 19, 2007

I Am Guilty as Charged!

There has been an irreversible change in the American economic system, and I am one of the guilty ones who effected this change. I have no excuse; I should have known better. It all began when I was in high school, and the new “discount center” came to my home town. Back in those days, the discount centers were on the square, just like all the other businesses. That wouldn’t last long, though. I remember the amazing discovery: my nineteen cent Bic pen, which could be purchased in any store on the square, was only sixteen cents in the discount store. I soon was passing by the other stores so I could save the three cents every time I needed a new pen.

Then the discount store moved. When it did, we moved with it. For three cents, I would go an extra two miles, to the main highway, where the new discount store was located. Understand, the local merchants were not gouging me. Bic had made a fortune with its nineteen cent pen (though there was also a 29 cent one that we sometimes splurged and bought). Now, since I was already two miles from downtown, I went ahead and made other purchases there. After all, the discount center had all sorts of things under one roof, even some groceries.

I didn’t understand at first why some of the local businesses on the square were going under. I supposed that the owners had reached retirement age, and just got tired of working. After a few years, our city square was composed of empty buildings, as well as some city offices, an occasional specialty shop, and some short-lived restaurants. Finally, the drug store and the Western Auto went under; after all, the discount store had all of those things anyway, and I could save three to five cents on a purchase.

Of course, we know now what happened. The discount store would order huge quantities of an item, and hold them at a large warehouse. Mr. Browning, however, due to the low volume of local sales, had to pay regular wholesale. Of course, his products were usually fresher (some of my “discount” Bic pens didn’t do as well as others, but after all, I was saving money).

The advent of “discount stores” brought a proliferation of similar businesses, and soon we had a choice. Now they all built out on the main highway, sometimes beyond the city sales tax boundaries. Then the super brand name stores (you know which ones) cornered the market. Oh, well, I will mention one out of necessity. When Arkansas businessman Sam Walton set up the first Wal-Marts, he furiously guarded quality. By then Bic pens cost more, but he could save us more. He also was appreciated for the jobs he brought to the US. I remember him in his own commercials, proud of the “Made in the USA” signs. Whole cities had their economies revitalized as he purchased huge quantities of bicycles, sports equipment, clothing, and other items from Smalltown, USA. Everybody was so happy that they didn’t even care that the city squares were now ghost towns. After all there were plenty of jobs in Wal-Mart and in its suppliers.

We might not have ever noticed if Sam Walton had lived forever. Though I’m not sure of the exact figures, Mr. Walton was worth between 6 and 8 billion dollars when he died, enough to pay for a decent funeral for a respected Arkansas entrepreneur. The last time I checked, however, some of his descendants/heirs were worth 15 to 20 billion and more – several of them, in fact. How did that happen? The truth is, Mr. Walton left them a magnificent network of trustworthy, efficient stores full of, for the most part, energetic and happy employees (“associates,” they are called). The temptation was just too great. Sam’s machinery was capable of much more. Since his death, Wal-Mart has slowly closed those American factories. You can do the math. You keep the same clientele, buying at least the same amount of merchandise, but you find a place that can do it cheaper. China was ready for that. For many years, it seemed like a win/win situation (except for the Smalltown USA factory workers, but life is tough, eh?)

We didn’t notice the creeping uniformity, the lowering of standards. After all, if a VCR breaks, it would have cost 50 bucks to fix it on the square in the old days. Wal-Mart has one for 60, and it’s brand new! I’ve often wondered where TV’s, VCR’s, and DVD’s now go when they die.

Years ago, if Mr. Browning’s store on the square didn’t have what I needed, or the size and color I wanted, I just went to the west side, and Mrs. Collins had it. Now, you can go to the Wal-Mart in central California and you will find the same merchandise, at the same price, that is on the racks of the Wal-Mart in West Virginia. And if you want “Made in America,” you’re probably out of luck.

Try to find a toy not made in China. While you’re at it, try to find one that will last from one Christmas to the next. I’ve watched the disappointment on the faces of my children as toys and gifts bought with hard-earned money broke within a few hours out of the box. We’ve taken advantage of Wal-Mart’s generous exchange policy, but were disappointed to find that the quality of the replacement toys was the same.

Now we’re finding out that everything from tires to dog food is coming to us from China. People and animals are dying because there’s no way anyone can control the quality of the cheap merchandise that is now the norm. The NTSB has no authority over the quality of a Chinese tire, and most Americans do not know they have one until their car has been totaled. We’re in a bind because we’ve dismantled the base of our manufacturing in the USA. If China suddenly cut off supply, we Americans would be unable to make a television or a toy or anything between. We are pouring trillions of dollars into the most populous nation on earth, who in turn is buying the choice real estate, investing in the space program, and buying up the best building materials. They, for all practical purposes, own the Panama Canal. They have been trying to buy interest in our oil companies and automobile manufacturers. Who can blame them? They have to spend the money somewhere, and the ones in power don’t want to waste it on the care of their own people.

We are at their mercy. And we are at Wal-Mart’s mercy. If Wal-Mart doesn’t have it, no one else will (in some places, because there no longer is anyone else). China and Wal-Mart set the trends for fashion (try to buy a dress for a teenage girl – it’s impossible), quality, and service. You can’t.

And who’s to blame? I am! It started when I wanted to save three cents on a Bic pen.

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