Virginia Gun Owners Forum - VGOF

Gotta take the bad with the good when it comes to capitalism.

[quote#12]Tens of thousands of Wal-Mart employees and their children are enrolled in Medicaid and are dependent on the government for healthcare.[/quote]

This is quite true, and not unique to WM. Many low wage unskilled jobs like that provide no benefits...if they did, they'd have to raise their prices, which many can't or won't do.

So we get to collectively subsidize their low prices in the form of increased Medicaid loads.

The free market isn't.

Of course, the only way that poor people get medical services is because of Medicaid. Before Medicaid, all poor people died young because they could not get care.

How much does the burden of Medicaid on providers force them to jack up their prices? Perhaps care would be relatively easily affordable for the poor if the government got off their backs. And perhaps they would not suffer so much from obesity and the ailments associated with it if they knew they were responsible for their own medical expenses and took better care of themselves.

The economic analysis of Medicaid does not fit on a bumper sticker, therefore it is beyond Kreutz's comprehension.

Sounds like the solution is to get rid of Medicaid.

FiremanBob wrote:Of course, the only way that poor people get medical services is because of Medicaid. Before Medicaid, all poor people died young because they could not get care.

How much does the burden of Medicaid on providers force them to jack up their prices? Perhaps care would be relatively easily affordable for the poor if the government got off their backs. And perhaps they would not suffer so much from obesity and the ailments associated with it if they knew they were responsible for their own medical expenses and took better care of themselves.

The economic analysis of Medicaid does not fit on a bumper sticker, therefore it is beyond Kreutz's comprehension.

Provider participation in medicaid is optional, so the underlined part of your post reveals as usual you know not of what you speak.

In any event what does this have to do with WM not willing to provide benefits to their workers to protect their very high profit margins? Trying to change the subject?

ShotgunBlast wrote:Sounds like the solution is to get rid of Medicaid.

Too much money being made off it, like the military industrial complex. Alot of public dollars go into a few private well connected hands, so like our bloated military still ordering weapon systems to fight the USSR its not going anywhere.

Problem with Medicare is that they pay in many cases less than the COST of the services rendered. This gets passed on to other patients who either have insurance or self-pay. That's the big reason insurance companies "negotiate" what THEY will pay - to keep from getting raped quite as badly to pay for the medicare shortfall. Warps the whole system.

I think the damn gov'mint needs to get OUT of healthcare EXCEPT to police the risk pool. They should not be dictating prices OR paying for services. Perhaps they should be paying for coverage through private insurors for those who truly can't afford health care; but only if they raise the money through an out-in-the-open tax so the people know what it's costing them instead of sneaking around and shifting costs.

Walmart just has too much market power, and they are abusing it. The Antitrust Division of the Justice Department ought to go to work on them; they sure didn't hesitate to dismantle Ma Bell.

I don't see how you can be against Walmart so much. It's capitalism at its best. They are the best at having a full supply chain, moving products from their suppliers to the stores, and providing the lowest cost to the consumer. Walmart makes a ton of money and its customers get products for the lowest price. They have raised living standards for many of their customers. Sounds like a win/win to me.

As far as the employees not getting paid squat, as a consumer I don't care. If they don't like it, go somewhere else and work.

As far as Walmart cutting out the competition, oh well. Business is tough. I'm used to people undercutting me in my industry, but price is only one variable in the entire equation. For my customers I also have to add value to make my more expensive experience worth it for a customer than some dope who's just undercutting me on price alone. As a consumer, I could go to other stores that have wider aisles, shorter checkout lines, have a selection of organic fruits and vegetables, shopping carts that don't squeak or thump, people to take my groceries out to my car, etc. Some people care about that stuff so that's where they shop (and they'll pay more for that experience). I don't so I'll shop at Walmart.

Every business has a target market, and Walmart picked the best target market of all: people who shop on price. There are a ton of people that think like that and there's even more when the economy is in the toilet. If your business goes under, don't blame Walmart. Either your target market wasn't big enough to support your business, you're a crappy business owner, don't know how to market your business, or a million other factors.

ShotgunBlast wrote:I don't see how you can be against Walmart so much. It's capitalism at its best. They are the best at having a full supply chain, moving products from their suppliers to the stores, and providing the lowest cost to the consumer. Walmart makes a ton of money and its customers get products for the lowest price. They have raised living standards for many of their customers. Sounds like a win/win to me.

As far as the employees not getting paid squat, as a consumer I don't care. If they don't like it, go somewhere else and work.

As far as Walmart cutting out the competition, oh well. Business is tough. I'm used to people undercutting me in my industry, but price is only one variable in the entire equation. For my customers I also have to add value to make my more expensive experience worth it for a customer than some dope who's just undercutting me on price alone. As a consumer, I could go to other stores that have wider aisles, shorter checkout lines, have a selection of organic fruits and vegetables, shopping carts that don't squeak or thump, people to take my groceries out to my car, etc. Some people care about that stuff so that's where they shop (and they'll pay more for that experience). I don't so I'll shop at Walmart.

Every business has a target market, and Walmart picked the best target market of all: people who shop on price. There are a ton of people that think like that and there's even more when the economy is in the toilet. If your business goes under, don't blame Walmart. Either your target market wasn't big enough to support your business, you're a crappy business owner, don't know how to market your business, or a million other factors.

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It's just like the "free market activity" that brought us the real estate bubble. Maybe not actually too much of a good thing, but certainly abuses of the system. I guess some day Walmart will be selling cheaper than anyone else because there IS no one else. Since their pursuit is profit, what do you think they will do then?

But the real problem is, WalMart runs everybody else in a small town out of business. Communities are impoverished. So you can buy stuff cheap. You mey be better off if you work for a big company, but what of the people who worked where Walmart ran them into the ground? And who supports the community? Certainly not Walmart.

dorminWS wrote:It's just like the "free market activity" that brought us the real estate bubble. Maybe not actually too much of a good thing, but certainly abuses of the system. I guess some day Walmart will be selling cheaper than anyone else because there IS no one else. Since their pursuit is profit, what do you think they will do then?

To clarify, what brought us the real estate bubble was free government money in the form of loan guarantees from Fannie May and Freddie Mac. A bank can now write anyone a loan for a house because they have nothing to lose if the loan goes bad? Sign up as many people as you can! And that's exactly what happened. In fact, when the housing market started to taper off, the first thing the government did was lower standards again on loan qualifications just to keep the market going. I was picking up houses and turning them into rentals for very little down and sometimes no documentation.

If the government simply stayed out of the loan guarantee business (and that includes student loans), free market institutions can only gamble with their own money and they'd be a lot more conservative on what they do with it which would have prevented housing prices from inflating as quickly as they did.

dorminWS wrote:But the real problem is, WalMart runs everybody else in a small town out of business. Communities are impoverished. So you can buy stuff cheap. You mey be better off if you work for a big company, but what of the people who worked where Walmart ran them into the ground? And who supports the community? Certainly not Walmart.

And how does your impoverished community benefit from having to pay higher prices for everything by shopping at the small businesses? "Now I can only afford to put gas in my vehicle and get 2 days worth of food instead of gas and 6 days worth of food". I can understand where you're coming from, but it sounds like your community doesn't support your community because people vote with their dollars every day and they choose Walmart. They don't HAVE to shop there. They CHOOSE to shop there. How can you fault them for being successful? Do you want Walmart to not change anything on the consumer side but double everyone's pay and offer them full benefits? How does that work?

If your community doesn't want a small business destroying company like Walmart in their town, they should be shopping at the small businesses and not shopping at Walmart. If your community wants businesses that give back to the community then they should shop at those businesses. My business gives a percentage of top line sales to local charities. I think it's one of those variables that people look for in choosing to do business with someone. Some of my customers think that's great, some customers don't care, and some people will choose to do business with someone else that offers a lower price that doesn't give back to the community. That's the way it goes.

Wal-Mart is pretty evil, and for all the reasons listed. Problem is, nothing that they are doing is constitutionally illegal. And, it really shouldn't be. Sam Walden figured out how expand his business to a ridiculous size, and good for him, I guess. He achieved the American dream. He was a ruthless business man, and the damage caused to others on account of it was probably unfair. But, life isn't fair. One plugs on and makes do.

Other things done by Wal-Mart to increase business and profit include selling products below cost (and what local business can compete with that?) and deceptive packaging. They would have name brand products, such as Folgers coffee, packaged specially for them. The containers would be the same size as the containers in Food Lion or Farm Fresh, but would contain an ounce or so less coffee. (Or whatever the product was; they did it with several.)

ShotgunBlast wrote:I don't see how you can be against Walmart so much. It's capitalism at its best. They are the best at having a full supply chain, moving products from their suppliers to the stores, and providing the lowest cost to the consumer. Walmart makes a ton of money and its customers get products for the lowest price. They have raised living standards for many of their customers. Sounds like a win/win to me.

Yes, Walmart has become successful by pushing efficiency to the extreme. Being more efficient allows one supplier to charge less and drive their competitors our of business. Efficiency, in of itself, is a great thing. The only thing I would take issue with or at least want to clarify is that Walmart is NOT raising living standards. You're mechanism is correct and you would be 100% correct if it were not for the lack of a free market mechanisms in the money supply. It's those pesky unintended consequences of the government meddling in with the money supply that's a problem. Read my response to dorminWS below to understand why.

dorminWS wrote:It's just like the "free market activity" that brought us the real estate bubble. Maybe not actually too much of a good thing, but certainly abuses of the system. I guess some day Walmart will be selling cheaper than anyone else because there IS no one else. Since their pursuit is profit, what do you think they will do then?

But the real problem is, WalMart runs everybody else in a small town out of business. Communities are impoverished. So you can buy stuff cheap. You may be better off if you work for a big company, but what of the people who worked where Walmart ran them into the ground? And who supports the community? Certainly not Walmart.

Wrong on point 1, the government brought us the real estate bubble through the manipulation and expansion of the money supply. Yes, other factors, such as unethical business practices which the government encouraged, were also at fault, but none of those could be done on a large scale without the expansion of the money supply.

Yes, communities are impoverished exactly because of the government expanding the money supply. Walmart, like so many people (myself included), is simply benefiting from this process.

This isn't the most technical response, but it will do for our purposes. When the government creates money out of thin air it is stealing...PERIOD. It is creating a token of value and exchanging it for actual value, aka the production or work of others to provide goods or services. Every time it does this, it devalues the remaining dollars (note actual physical cash isn't required, i.e. the printing presses, to do this, but that's another story). It's not quite this simple, but each dollar basically represents a fraction the productive capacity of the nation. If the government doubles the money supply, but production does not increase, each dollar is literally worth have as much. I benefit from this process by being as close to the newly created dollars as possible; in this manner I am able to effectively spend the new dollars at their old value or close to it because the inflationary effects of creating new money take time to propagate throughout the economy. The closer you are to the monies creation, the better off you are. Banks, government employee's, defense contractors, etc., etc., etc. all benefit from this particular mechanism. They are effectively able to spend the newly created dollars before they have been properly devalued by the market. As a government contractor this practically means that my salary, benefits, etc. (total compensation) exceed the dollar figure they would otherwise command in the market. I'm not alone in this, ANYONE who gets dollars from the government is doing the exact same thing. It's slightly off-topic, but you can not stem the growth of government without stopping the expansion of the money supply because the net affect of this is all goods and services (i.e. my labor) will migrate to the best value and that value is government employment in some fashion.

Two things should now be obvious. First, the creation of new money is effectively a tax. It permits the government to spend more than it directly takes from the market, aka the people and businesses of the nation. The reality is that the government is not spending more than it takes out when it creates new money, it just does the remaining balance indirectly through a mechanism call inflation. Second, the creation of new money is the causal action which is inflation, not the rising of prices as the government would have you believe. That's a hugely important point! As long as you believe that inflation is the rising of prices the government has the power to manipulate the inflation by defining it away as they continually do in order keep up appearances. You will also conclude, wrongly, that when prices rise that everyone is impacted the same. Nothing could be further from the truth. Anyone close to the creation of that money (this includes actual private businesses, for example located in NOVA, who received the new money from the people who got it first) will effectively receive more value or purchasing power than those further away. Please note that it's not a step function, every step you get further away from the creation of that new money the less valuable it becomes.

If this mechanism isn't clear yet, don't worry it's purposefully designed to be confusing. Making it confusing is exactly why the government does not run the printing presses much anymore; average people would notice. The government can accomplish the exact same thing through obscured mechanisms. Politicians love it because it lets them spend more than they directly tax...never forget you are paying the full price of their spending, you just don't see it like you do a direct tax. Consider the following...remove the affects of supply and demand from a good or services price. Yes, it doesn't work like that in the real world, but we need a simple example that doesn't convolute the affects. For this example, I am going to use gas and in this case there is a fixed supply and a fixed demand. In such a world, the only way for the price to change is for the value of the medium of exchange to change. If this fictitious gas cost $1.00 a gallon today, it would always cost $1.00 a gallon because there are no forces to move the price. However, if the government decides to double the money supply, how much should the gas cost? In a world without inelastic or sticky prices, it would cost exactly $2.00 a gallon because each dollar is worth exactly have as much as before. If the price of everything, not just our fictitious gas, instantly doubled there would be no advantage to doubling the money supply, except for any debt owed. This uncovers the first reason governments increase the money supply, to pay for old debt with new money effectively means they are paying less real value for the goods or services. If the government owed you $100 before doubling the money supply, then doubled it, and finally paid you back with the new money you would have exactly half as much purchasing power as before. Sure, they paid you the exact amount owed, but it doesn't buy that much as it did when you lent it to them because everything cost twice as much. It doesn't end there though.

The reality is that prices are sticky (some can rise with the increase in money or more than the increase while others can not, but we'll ignore that for this simple discussion), but more importantly, prices don't rise instantly with inflation. Again, as long as the government has the masses convinced that rising prices are inflation, this mechanism is hidden. Inflation happens when they created money, the prices rise when the market figures it out. Anyone who can spend the new dollars before then is getting more value for their dollar. The astute will note that there is no difference between the new dollars and the old when you go to the store. First, thank you for proving my point. The market can not and does not distinguish between the new dollars and the old. I.e. when I, as a government contractor, go to the store, I pay the same price as everyone else. Despite the fact that the government has doubled the money supply, the market doesn't realize it yet and thus, prices haven't risen yet. It takes time for prices to react to the inflation that already occurred! Again, this is exactly why the government loves make stories up about how rising prices are inflation. Namely, they control what prices are considered for the inflation index and how they are considered. The government purposefully picks prices they know won't rise, aka a sticky price, as much as the actual inflation they caused. For our example, with a doubling of the money supply, a sticky price may only show a 20% increase. That doesn't mean inflation is only 20%, it simply means that the remaining price increase went somewhere else! E.g. the stock market, housing, etc.

So, how exactly do those closest to the government get more value for their dollars? Simple, they get more of them. It's very easy for the government to pay out more dollars when they can simply create them at will. Remember, the reason the government wanted to create more dollars in the first place was so they could spend more than they directly tax the people for. It "needs" those extra dollars so it can pay for the goods and services rendered unto it or else the people providing them will simply do something else. Dealing with a bureaucracy is a hassle and for equal pay, most people would choose not to deal with it. However, the government has a solution for this, simply pay them more. After all, it's not like the government actually works for its dollars! Thus, while I may pay the same number of dollars for a gallon of gas, I'm able to get more of them for the same work. This also works for the private gas station owner who is located near the government in exactly the same way. Think about it. What do a bunch of government paid employee's, contractors, etc. do with all those extra dollars, above and beyond what they would acquire in a real free market? They buy more goods and services; they consume more because they have the means to do so. Why drive a Camery when you have the means for a Lexus? Anyone close to the government new money benefits in exactly the same way. Would you locate your new Lexus dealership in DC or Timbuktu? It's obvious, you go where the money is and it's around government centers of power. Thus, even those providing goods and services to those government paid workers benefit greatly from this new money. Specifically at the expense of those competitors in their market who are not located near that new money because they are able to bid up the prices of everything. This is one way the rich get richer and the poor get poorer...it's all about if you know and understand what the creation of money actually does and how it does it. Given the scale of our government, it's impossible to avoid this mechanism, the question is only how much and was it more than the inflation tax inflicted upon you.

Banks perform the same trick, but on a massive scale. However, they go even further by loaning the new monies and thus multiplying the effects. Financial crises like the housing market bubble can't occur on such a massive scale without access to this new and practically free money from the Federal Reserve, but that's another long story.

What does all of this have to do with Walmart and how they are not increasing the standard of living? The further you get away from government, the more of the inflation tax you will be paying through loss in purchasing power and the fewer "new dollars" you will be able to take advantage of. In real terms, your work is able to purchase less and less as the governments centers of power consume more and more of the productive capacity and wealth of the nation/world. Those new dollars bid up all prices, those closest to the government simply have the means to pay the higher prices. Sam Walton may or may not have understood this mechanism, but he certainly understood the shift in demand to really low cost goods and services. So great is this impoverishment that not even Walmarts innovations in efficiencies can keep up and thus, they have lowered quality in most of their products. The flood of people shopping at Walmart isn't because it raises their standard of living, it's because they are loosing so much purchasing power from government inflation that there is no other choice. Those people are simply trying to maintain a decent standard of living and Walmart's the best choice. The closer you get to that new money the less desire or need those people have to shop at Walmart.

Please note that I've simply explained the mechanism, I haven't made any moral or ethical judgments of it. I don't it's possible to avoid it unless you go off the grid. Given that, I also think it's shrewed to get as much for your labor as possible. Personally, I would love to abolish this mechanism despite the fact that I benefit greatly from it because I believe it's unethical and immoral how the government creates money. However, as long as I reasonably have no alternative to dollars for everyday life, I'm going to be as shrewed about it as possible. This all starts and ends with the Federal Reserve. Bills like Audit the Fed are just a step in the right direction. The idea is to expose the funny business which makes this pale in comparison.

Until we have a money supply which can not be manipulate for political purposes, there is no way to stop the expansion of government. The goods and services, thus the people who provide and create them, will go where the money is and the money is always in greatest abundance with those who can create it of nothing.

I don't shop much at Walmart, because I try to shaft china at every chance I get. I cannot abide their human rights record. I am not talking bout work conditions, but a true war on women and children. Most of what is at Walmart is made in china. Look I know Walmart is both a boon and a bust. It has employed many people, and unemployed others. But I hate cheap crap that breaks two minutes after I get it. I hate supporting brutality in any form. That seems to sum up a great deal of the products there.

I know my one semi-boycott of china does nothing (as hard as I try sometimes there is simply no option other than made in china), but I have to follow my own conscience.

[ Post made via Mobile Device ]

Good post gunderwood. I would argue that Walmart is raising living standards because they are providing goods at a lower price that benefit me that I otherwise might not get to purchase.

If I have a tenant who is used to eating raman noodles and not being able to afford a television or air conditioning but now they live in one of my houses that's near a Walmart and now they can afford ground beef, a flat panel TV, and an inexpensive wall unit AC because their dollar goes further I'd say their life just got a lot better.

You take a company like Vizio who is the #1 TV manufacturer in the country now thanks to Walmart. How many people would be without a big TV if it wasn't for them? Sure it's not raising living standards like getting fresh water or electricity delivered to your house for the first time, but many people enjoy it all the same.

Walmart does not "run every other merchant out of town." Many people want goods of better quality and style than Walmart sells. Many people want convenience. Many other merchants have figured out ways to provide value that Walmart cannot match, and attract enough customers to have good profits.

My "local" Walmart is 15 miles away. It costs me $6 round-trip just to take my truck up to the Walmart. My local Food Liar is less than 1/2 mile. The prices on the stuff I buy are comparable. I walk to the local store much more often than I drive to Walmart. The Walmart has really poor quality produce, but the FL has good produce. (Sam's, however, also has very good produce but the prices really aren't all that much cheaper than the local store).

I don't buy my business or social clothes at Walmart, although I do buy work shirts and pants there. I don't buy shoes of any kind at Walmart.

Walmart captures the commoditized, low-end market. It also provides convenient, one-stop shopping for country folk who have to drive miles to get to any store at all.

Walmart provides jobs to a lot of people at competitive wages, or they wouldn't have enough employees to run their stores.

The demonization of Walmart is just another example of Marxist envy and resentment of a successful entrepreneur.

As to Kreutz's comment, which hospitals and hospital affiliated doctors refuse to accept Medicaid, if it's "optional"? What is going to be "optional" is the number of doctors who retire, and the reduced number of people willing to become doctors, as the government continues to squeeze the profit out of their industry.

Et cetera...

But Wal-Mart has so many interesting people that shop there

http://xaxor.com/funny-pics/21199-funny-more-walmart-people-part-5.html

"The demonization of Walmart is just another example of Marxist envy and resentment of a successful entrepreneur."

??? That's a little over the top, I'd say.

Y'all go ahead and send everything you own to Bentonville, Arkansas a little bit at a time.

gunderwood wrote:

ShotgunBlast wrote:I don't see how you can be against Walmart so much. It's capitalism at its best. They are the best at having a full supply chain, moving products from their suppliers to the stores, and providing the lowest cost to the consumer. Walmart makes a ton of money and its customers get products for the lowest price. They have raised living standards for many of their customers. Sounds like a win/win to me.

Yes, Walmart has become successful by pushing efficiency to the extreme. Being more efficient allows one supplier to charge less and drive their competitors our of business. Efficiency, in of itself, is a great thing. The only thing I would take issue with or at least want to clarify is that Walmart is NOT raising living standards. You're mechanism is correct and you would be 100% correct if it were not for the lack of a free market mechanisms in the money supply. It's those pesky unintended consequences of the government meddling in with the money supply that's a problem. Read my response to dorminWS below to understand why.

dorminWS wrote:It's just like the "free market activity" that brought us the real estate bubble. Maybe not actually too much of a good thing, but certainly abuses of the system. I guess some day Walmart will be selling cheaper than anyone else because there IS no one else. Since their pursuit is profit, what do you think they will do then?

But the real problem is, WalMart runs everybody else in a small town out of business. Communities are impoverished. So you can buy stuff cheap. You may be better off if you work for a big company, but what of the people who worked where Walmart ran them into the ground? And who supports the community? Certainly not Walmart.

Wrong on point 1, the government brought us the real estate bubble through the manipulation and expansion of the money supply. Yes, other factors, such as unethical business practices which the government encouraged, were also at fault, but none of those could be done on a large scale without the expansion of the money supply.

Yes, communities are impoverished exactly because of the government expanding the money supply. Walmart, like so many people (myself included), is simply benefiting from this process.

This isn't the most technical response, but it will do for our purposes. When the government creates money out of thin air it is stealing...PERIOD. It is creating a token of value and exchanging it for actual value, aka the production or work of others to provide goods or services. Every time it does this, it devalues the remaining dollars (note actual physical cash isn't required, i.e. the printing presses, to do this, but that's another story). It's not quite this simple, but each dollar basically represents a fraction the productive capacity of the nation. If the government doubles the money supply, but production does not increase, each dollar is literally worth have as much. I benefit from this process by being as close to the newly created dollars as possible; in this manner I am able to effectively spend the new dollars at their old value or close to it because the inflationary effects of creating new money take time to propagate throughout the economy. The closer you are to the monies creation, the better off you are. Banks, government employee's, defense contractors, etc., etc., etc. all benefit from this particular mechanism. They are effectively able to spend the newly created dollars before they have been properly devalued by the market. As a government contractor this practically means that my salary, benefits, etc. (total compensation) exceed the dollar figure they would otherwise command in the market. I'm not alone in this, ANYONE who gets dollars from the government is doing the exact same thing. It's slightly off-topic, but you can not stem the growth of government without stopping the expansion of the money supply because the net affect of this is all goods and services (i.e. my labor) will migrate to the best value and that value is government employment in some fashion.

Two things should now be obvious. First, the creation of new money is effectively a tax. It permits the government to spend more than it directly takes from the market, aka the people and businesses of the nation. The reality is that the government is not spending more than it takes out when it creates new money, it just does the remaining balance indirectly through a mechanism call inflation. Second, the creation of new money is the causal action which is inflation, not the rising of prices as the government would have you believe. That's a hugely important point! As long as you believe that inflation is the rising of prices the government has the power to manipulate the inflation by defining it away as they continually do in order keep up appearances. You will also conclude, wrongly, that when prices rise that everyone is impacted the same. Nothing could be further from the truth. Anyone close to the creation of that money (this includes actual private businesses, for example located in NOVA, who received the new money from the people who got it first) will effectively receive more value or purchasing power than those further away. Please note that it's not a step function, every step you get further away from the creation of that new money the less valuable it becomes.

If this mechanism isn't clear yet, don't worry it's purposefully designed to be confusing. Making it confusing is exactly why the government does not run the printing presses much anymore; average people would notice. The government can accomplish the exact same thing through obscured mechanisms. Politicians love it because it lets them spend more than they directly tax...never forget you are paying the full price of their spending, you just don't see it like you do a direct tax. Consider the following...remove the affects of supply and demand from a good or services price. Yes, it doesn't work like that in the real world, but we need a simple example that doesn't convolute the affects. For this example, I am going to use gas and in this case there is a fixed supply and a fixed demand. In such a world, the only way for the price to change is for the value of the medium of exchange to change. If this fictitious gas cost $1.00 a gallon today, it would always cost $1.00 a gallon because there are no forces to move the price. However, if the government decides to double the money supply, how much should the gas cost? In a world without inelastic or sticky prices, it would cost exactly $2.00 a gallon because each dollar is worth exactly have as much as before. If the price of everything, not just our fictitious gas, instantly doubled there would be no advantage to doubling the money supply, except for any debt owed. This uncovers the first reason governments increase the money supply, to pay for old debt with new money effectively means they are paying less real value for the goods or services. If the government owed you $100 before doubling the money supply, then doubled it, and finally paid you back with the new money you would have exactly half as much purchasing power as before. Sure, they paid you the exact amount owed, but it doesn't buy that much as it did when you lent it to them because everything cost twice as much. It doesn't end there though.

The reality is that prices are sticky (some can rise with the increase in money or more than the increase while others can not, but we'll ignore that for this simple discussion), but more importantly, prices don't rise instantly with inflation. Again, as long as the government has the masses convinced that rising prices are inflation, this mechanism is hidden. Inflation happens when they created money, the prices rise when the market figures it out. Anyone who can spend the new dollars before then is getting more value for their dollar. The astute will note that there is no difference between the new dollars and the old when you go to the store. First, thank you for proving my point. The market can not and does not distinguish between the new dollars and the old. I.e. when I, as a government contractor, go to the store, I pay the same price as everyone else. Despite the fact that the government has doubled the money supply, the market doesn't realize it yet and thus, prices haven't risen yet. It takes time for prices to react to the inflation that already occurred! Again, this is exactly why the government loves make stories up about how rising prices are inflation. Namely, they control what prices are considered for the inflation index and how they are considered. The government purposefully picks prices they know won't rise, aka a sticky price, as much as the actual inflation they caused. For our example, with a doubling of the money supply, a sticky price may only show a 20% increase. That doesn't mean inflation is only 20%, it simply means that the remaining price increase went somewhere else! E.g. the stock market, housing, etc.

So, how exactly do those closest to the government get more value for their dollars? Simple, they get more of them. It's very easy for the government to pay out more dollars when they can simply create them at will. Remember, the reason the government wanted to create more dollars in the first place was so they could spend more than they directly tax the people for. It "needs" those extra dollars so it can pay for the goods and services rendered unto it or else the people providing them will simply do something else. Dealing with a bureaucracy is a hassle and for equal pay, most people would choose not to deal with it. However, the government has a solution for this, simply pay them more. After all, it's not like the government actually works for its dollars! Thus, while I may pay the same number of dollars for a gallon of gas, I'm able to get more of them for the same work. This also works for the private gas station owner who is located near the government in exactly the same way. Think about it. What do a bunch of government paid employee's, contractors, etc. do with all those extra dollars, above and beyond what they would acquire in a real free market? They buy more goods and services; they consume more because they have the means to do so. Why drive a Camery when you have the means for a Lexus? Anyone close to the government new money benefits in exactly the same way. Would you locate your new Lexus dealership in DC or Timbuktu? It's obvious, you go where the money is and it's around government centers of power. Thus, even those providing goods and services to those government paid workers benefit greatly from this new money. Specifically at the expense of those competitors in their market who are not located near that new money because they are able to bid up the prices of everything. This is one way the rich get richer and the poor get poorer...it's all about if you know and understand what the creation of money actually does and how it does it. Given the scale of our government, it's impossible to avoid this mechanism, the question is only how much and was it more than the inflation tax inflicted upon you.

Banks perform the same trick, but on a massive scale. However, they go even further by loaning the new monies and thus multiplying the effects. Financial crises like the housing market bubble can't occur on such a massive scale without access to this new and practically free money from the Federal Reserve, but that's another long story.

What does all of this have to do with Walmart and how they are not increasing the standard of living? The further you get away from government, the more of the inflation tax you will be paying through loss in purchasing power and the fewer "new dollars" you will be able to take advantage of. In real terms, your work is able to purchase less and less as the governments centers of power consume more and more of the productive capacity and wealth of the nation/world. Those new dollars bid up all prices, those closest to the government simply have the means to pay the higher prices. Sam Walton may or may not have understood this mechanism, but he certainly understood the shift in demand to really low cost goods and services. So great is this impoverishment that not even Walmarts innovations in efficiencies can keep up and thus, they have lowered quality in most of their products. The flood of people shopping at Walmart isn't because it raises their standard of living, it's because they are loosing so much purchasing power from government inflation that there is no other choice. Those people are simply trying to maintain a decent standard of living and Walmart's the best choice. The closer you get to that new money the less desire or need those people have to shop at Walmart.

Please note that I've simply explained the mechanism, I haven't made any moral or ethical judgments of it. I don't it's possible to avoid it unless you go off the grid. Given that, I also think it's shrewed to get as much for your labor as possible. Personally, I would love to abolish this mechanism despite the fact that I benefit greatly from it because I believe it's unethical and immoral how the government creates money. However, as long as I reasonably have no alternative to dollars for everyday life, I'm going to be as shrewed about it as possible. This all starts and ends with the Federal Reserve. Bills like Audit the Fed are just a step in the right direction. The idea is to expose the funny business which makes this pale in comparison.

Until we have a money supply which can not be manipulate for political purposes, there is no way to stop the expansion of government. The goods and services, thus the people who provide and create them, will go where the money is and the money is always in greatest abundance with those who can create it of nothing.

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I'll say this for you, Gunderwood; you are interesting even when you're being condescending. No offense; but you remind me of a fellow about whom a crusty old man once remarked, "If you ask that feller what time it is, he'll tell you how to build a clock." Trouble is, maintaining a dialogue with you takes more time than I sometimes have. As stated, I cited the abuses as the thing about the real estate bubble that was analogous to Wal-Mart. That the government enablement was a crucial part of the mix is true, but not relevant to my point, it seems to me. That said, I don't disagree with anything you said in your diatribe on basic economics. Couldn’t if I wanted to – it’s basic economics.

dorminWS wrote:"The demonization of Walmart is just another example of Marxist envy and resentment of a successful entrepreneur."

??? That's a little over the top, I'd say.

Y'all go ahead and send everything you own to Bentonville, Arkansas a little bit at a time.

But if you did read my post you would know that I do not do that. I'll refrain from a condescending coda this time.

I like wal-mart because they support consumers. I don't expect the store where I buy trash bags, shampoo, some food, and ammo to take up causes and socially engineer a better planet. I expect them to sell me stuff cheaper than the other guy, and they generally do. And come to think of it, most everything I buy at Wally World is made in the USA.