The Democrats make the Poor travel for Hours by Bus to do their Grocery Shopping

Posted by PITHOCRATES - August 18th, 2013

Week in Review

The Democrats champion unions.  And the poor.  Which creates a bit of a problem for Democrats.  As unions actually help to keep the poor poor.  Union employees raise selling prices higher than non-union employees.  Which is why cars built in the union North are more expensive than cars built in the non-union South.  And why the world’s largest retailer, Wal-Mart, can sell at such low prices.  Because their stores use non-union labor.  Which the Democrats hate.  And work actively to prevent them from moving into new neighborhoods.  Which may explain problems like this (see How access to fresh food divides Americans by Iris Mansour posted 8/15/2013 on CNNMoney).

Twenty-nine million Americans live in urban and rural food deserts, according the U.S. Department of Agriculture (USDA). By this definition, Americans in low-income rural areas have to travel at least 10 miles to get to their nearest supermarket. While city dwellers from low-income neighborhoods have to travel a mile or more.

In America, where the car is king, a 15-minute, one-mile drive doesn’t seem unreasonable. But if you live in a dense city like Washington D.C., that may mean having to take two hour-long bus rides in each direction to get to a supermarket, with shopping bags in tow…

But why the supermarket shortfall..?

Brian Lang, Director of the National Campaign for Healthy Food Access at The Food Trust says supermarkets stay away because urban settings force them to rethink the shape and size of their stores. Walgreens (WAG) can’t transplant its standard rectangular layouts from the sprawling suburbs into tightly packed neighborhoods. TRF’s Hinkle-Brown highlights another issue. A supermarket’s employees tend to live very nearby. “If they’re operating in low-income areas, they’re less work-ready. It takes six months longer to train them, and insurance costs are higher in urban areas,” he says.

Jeffrey Brown has experienced these problems firsthand. He operates six ShopRite supermarkets in former food deserts and five in suburban areas. He explains that suburban grocery stores, like his own, can expect to make a 1% net profit after tax, while his urban stores initially showed a 4% loss, resulting in a 5% gap between urban and suburban profits…

Hinkle-Brown explains that in 2004 he couldn’t get a meeting with a national grocery store. But today Target (TGT) and Wal-Mart (WMT) are opening smaller urban stores. “They realized that the big business frontier of revolutionary growth was behind them,” says Hinkle-Brown.

Walmart has a made a commitment to open 275 to 300 stores in food desert areas by 2016.

Most of these food deserts are in impoverished parts of big cities.  That are Democrat.  Like Detroit.  San Francisco.  Seattle.  Boston.  New York City.  And Washington D.C.  Where the local Democrat governments have done everything within their power to keep Wal-Mart out (see Washington D.C. and Detroit say ‘No’ to Wal-Mart because they don’t need Jobs or Shelves full of Low-Priced Goods posted 7/20/2013 on Pithocrates).  Because they care more for their dues-paying union supporters than the poor.  Apparently.

Wal-Mart can make life better for so many.  And they want to.  But because they’re non-union the Democrats are keeping them away from the people that would benefit most from them.  It’s not the Republicans doing this to the poor.  It’s the Democrats doing this to the poor.  And they’re supposed to be the protector of the poor?  Let’s hope the poor remember this the next time they vote.  Of course, for that, the Democrats will drive them to the polls.  Because that’s what they really care about.  Their vote.  Not how many hours they have to travel by bus to do their grocery shopping.

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FUNDAMENTAL TRUTH #20: “It is never a consumer that complains about ‘predatory’ pricing.” -Old Pithy

Posted by PITHOCRATES - June 29th, 2010

LOW PRICES.  GOD help me, I do hate them so.  I hate them with every fiber of my body.

Who says this?  Do you?  I don’t.  Of all the times I’ve spent shopping, I have never heard anyone bitch about low prices.  I’ve heard people bitch about high prices.  But never about low prices.  When gas approached $3/gallon, people bitched about that being too high and drove 10 miles to find ‘cheap’ gas to save a few pennies per gallon.  Let it approach $4/gallon and they’ll want Congress to take action.  To attack Big Oil.  To seize their oil and their profits and give us cheap gasoline in return.  But when gas was cheap, no one ever bitched about it being ‘too’ cheap.  It just doesn’t happen that way.  People bitch about high prices.  Not low prices.

So who bitches about low prices?  Competitors.  There’s a saying that competition makes everything better.  And it does.  It lowers prices.  And raises quality.  And who is looking for lower prices and higher quality?  Consumers.  Who isn’t?  Competitors.  Especially competitors with political connections.

WHEN THE BIG 3 were putting out crap in the 1970s, they did so because they could.  I mean, who else were you going to buy a car from?  So what if your car breaks down and the fenders and quarter panels rust away?  That just means you gotta buy another car sooner rather than later.  A pretty sweet deal.  Especially when there are only three places to go to buy a car.  And each of the Big 3 is selling the same crap.

Then the Japanese had to go and ruin a good thing.  They started selling cars in America.  These cars were smaller than your typical American car.  But there were other differences.  They didn’t rust like the American cars.  They didn’t break down as much.  And the imports were cheaper than the American cars.  Lower price and higher quality.  More bang for the buck.  Exactly what consumers were demanding.

So what was the response of the Big 3?  Did they rise to the level of their new competitors and deliver what the consumer wanted?  No.  They ran to government for help.  For protection.  And they got it.  Voluntary Export Restraints (VER).  The government negotiated with the Japanese to ‘voluntarily’ limit the number of cars they exported to the United States.  Or else.  So they did.  To avoid worse protectionist policies.  Problem solved.  Competition was limited.  And the Big 3 were very profitable in the short run.  Everyone lived happily ever after.  Until the Japanese refused to play nice.

The problem was what the Big 3 did with those profits.  Or, rather, what they didn’t do with them.  They didn’t reinvest them to raise themselves up to the level of the Japanese.  Protected, they saw no incentive to change.  Not when you have Big Government on your side.  And how did that work for them?  Not good. 

So look, the Japanese said, the Americans like our cars.  If the American manufacturers won’t give them what they want, we will.  While honoring the VER.  We won’t export more cars.  We’ll just build bigger and better cars to export.  And they did.  The Big 3 were no longer up against inexpensive, higher quality subcompacts on the fringe of their market share.  Now their mid-size and large-size cars had competition.  And this wasn’t on the fringe of their market share.  This was their bread and butter.  What to do?  Build better cars and give Americans more bang for their buck?  Or run to government again?  What do you think?

The Big 3 assaulted the Japanese under the guise of ‘fair trade’.  The cry went out that unless the Japanese opened up their markets to American imports (in particular auto parts), we should restrict Japanese imports.  To protect American jobs.  To protect the American worker.  To protect the children.  This was code for please make the Japanese cars more unattractive to purchasers so they will settle for the more costly and lower quality cars we’re making.  (Let’s not forget the reason Americans were buying the Japanese cars in the first place).

The Japanese response?  They took it up a notch.  They entered the luxury markets.  They launched Acura, Lexus and Infiniti.  They competed against Cadillac and Lincoln.  And well.  The quality was so good they even affected the European luxury imports.  More attacks followed.  Americans were losing their jobs.  Soon there would be no more American manufacturing left in the country.  So the Japanese built plants in America.  And Americans were now building the Japanese cars.  The Japanese actually created American jobs.

SON OF A BITCH!  So much for the loss of American jobs.  The Japanese threw a wrench in that argument.  So now the argument became about the loss of ‘high paying’ American jobs.  For the Japanese plants were non-union.  Didn’t matter that their workers were making better pay and benefits than many in their region.  No.  What mattered was that they were building a better product.  And they didn’t want THESE jobs in America.  But if they couldn’t get rid of these new workers, they should at least unionize them so their cars cost more.  To make them a little less appealing to the American consumer.  So far they have been unsuccessful in this endeavor.  The workers are happy as they are.

Well, these cars just weren’t going away.  So the Americans surrendered car manufacturing to the Japanese.  They couldn’t beat them.  (Of course, it’s hard to do that when you don’t even try).  They, instead, focused on the higher profit truck and SUV markets.  Then the Japanese entered those markets.  And at every level they competed with the Americans, the Japanese gave more bang for the buck.  And the consumers responded.  With their hard-earned wages.  It just wasn’t fair.  The Japanese kept giving the American consumer a better product.  No matter what political action the Big 3 took or demanded.

And there’s the problem.  They sought their answers from government.  Instead of making a better car.  They wanted to stop the Japanese from giving the American consumer what they wanted so they could force Americans to pay more for less.  All the while the economy was forcing the majority of consumers to get by on less (the majority of consumers do not have the wage and benefit package the ‘select’ few had in the Big 3). 

Fast forward to 2008 and we see the ultimate consequence of their actions.  Bankruptcy.  GM and Chrysler had to grovel for a federal bailout and in the process become Washington’s bitch.  Ford survived on her own.  As did the Japanese.  You can bitch all you want about costs, but if you have the revenue you can pay your costs.  And the Americans just couldn’t sell enough cars to maintain the revenue they needed for their cost structure.  By refusing to address the core problem (they weren’t making cars Americans wanted to buy), they only made their competition stronger and more entrenched in the U.S. market.

IT’S ALL POLITICS.  Political cronyism.  And crony capitalism.  It all comes down to political spoils and patronage.  That’s what happens when politics enter capitalism.  Big Business partners with Big Government and they enter into relationships.  You scratch my back and I’ll scratch your back.  But when government protects a business for political expediency, the industry suffers in the long run.  As the U.S. automobile industry has.  Ditto for the U.S. textile industry.  And the U.S. steel industry.

So what goes wrong?  When you protect an industry you insulate it from market forces.  You can build crap.  The problem is, consumers don’t buy crap.  So, for awhile, politics intervene and makes the crap more favorable.  Whether it’s predatory pricing, monopolistic pricing or collusion, business can’t win.  Big Government is there.  If your prices are too low, government will intervene.  If prices are too high, government will intervene.  If prices are too similar, government will intervene.  To make things ‘fair’.  And by fair they mean to reward those who play the game and to punish those who don’t.  And the spoils go to those large voting blocs they need.  And in return for their votes, they can count on patronage.  Government jobs.  Political positions.  Favorable legislation and regulation.  If you got the vote out, you were rewarded quite nicely. 

And consumers be damned. .

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