Those Debating Economic Policies, Attention
Wal-Mart shoppers are running out of money
Is this recession going to do a double dip or is it just more widening into a two-class economy and society? It need not be this way. Smart policy motivates changes in behavior, technological investments, and land use. We trim, blend, and append three 2011 articles from: (1) CNNMoney, Apr 28, on WalMart by Parija Kavilanz; (2) New York Times, Apr 27, on gas prices by D. Esty (commissioner of the Connecticut Department of Environmental Protection) and M. Porter (professor at Harvard Business School; and (3) Wall St Journal, Apr 28, on California by N. Rosen.
by Parija Kavilanz, by Daniel C. Esty & Michael E. Porter, and by Nicholas D. Rosen
Wal-Mart: Our shoppers are 'running out of money'
Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried.
Wal-Mart shoppers, many of whom live paycheck to paycheck, typically shop in bulk at the beginning of the month when their paychecks come in.
CEO Mike Duke said, "Purchases are really dropping off by the end of the month even more than last year.
Wal-Mart, which averages 140 million shoppers weekly to its stores in the United States, is a barometer of the health of the consumer and the economy.
To that end, Duke said he's not seeing signs of a recovery yet.
With food prices rising, Duke said Wal-Mart is charging customers more for some fresh groceries while reducing prices on other merchandise such as electronics.
Wal-Mart has had seven straight quarters of sales declines in its stores.
Addressing that challenge, Duke said the company made mistakes by shrinking product variety and not being more aggressive on prices compared to its competitors. "What's made Wal-Mart great over the decades is 'every day low prices' and our [product] assortment," he said. "We got away from it."
Duke said making Wal-Mart a "one-stop shopping stop" is a critical response to dealing with the rising price of fuel. Americans don't have the luxury of driving all over town to do their shopping.
"Social networking is much more a part of the purchasing decision," he said. "Consumers are communicating with each other on Facebook about how they spend their money and what they're buying."
Duke said Wal-Mart is testing delivery of groceries to its online business in San Jose.
To see the whole article, click here
JJS: Duke said, "This end-of-month [purchases] cycle is growing to be a concern” -- for the corporation; not peep about the poor consumer or society in general. Here are some thoughts on the so-called “culprit” -- spendy gas.
Pain at the Pump? We Need More
Gasoline prices are above $4 per gallon in much of the country. Americans spend hundreds of billions of dollars for foreign oil. This threatens America’s economic stability and national security. Our energy inefficiency is a drag on our competitiveness. Our consumption of fossil fuels increases air pollution and the threat of climate change.
While encouraging clean energy innovation, we need to let the market decide which particular technologies prevail. Experience in fields like information technology and telecommunications suggests that creating demand for innovation is far more effective than subsidizing company-specific research projects or providing incentives for particular technologies. Governments just aren’t good at picking winners; witness the billions wasted on corn-based ethanol subsidies.
The best way to drive energy innovation would be an emissions charge of $5 per ton of greenhouse gases beginning in 2012, rising to $100 per ton by 2032. The low initial charge, starting next year, would make the short-term burden on consumers and businesses almost negligible. Making people pay for the harm they cause lies at the heart of property rights.
Coal-burning power plants would pay based on the emissions measured at their smokestacks. Oil companies would pay for every gallon of gas or oil delivered. Yes, these costs would be passed on to consumers,
But this is what motivates changes in behavior and technological investments. Anyone pursuing an energy-consuming project, like a power plant, would factor in the rising long-term charge into their choice of technology. People buying new cars would have an added incentive to think about fuel economy.
An emissions charge would move us from oil and coal to natural gas, with its much lower carbon content. Burning gas for generating power would, by extension, fuel transportation, as electric vehicles become cost-effective alternatives to internal combustion cars. The shift to gas would allow the United States to cut greenhouse-gas emissions by up to 50% over the next decade.
The prospect of a steadily rising emissions charge would focus the private sector’s attention on energy-saving and carbon-reducing innovations. Entrepreneurial spirit would be unleashed in companies from multinational enterprises to back-of-the-garage inventors.
European countries and China are already imposing emissions charges. Here the ballooning federal deficit has created a new political imperative. A modest emissions charge will look attractive compared with raising individual income taxes or burdening the economy with new corporate or payroll taxes.
To see the whole article, click here
JJS: Besides taxing pollution, taxes might also be constructively used to tax location, or the exclusion of others from a parcel of land. The editors of a major business journal highlighted this shift of the property tax recently.
California vs. Texas: Debating Their Economic Policies
California is not only overtaxed and overregulated ("California Dreamin'—of Jobs in Texas" by John Fund, op-ed, April 22); it has the wrong kind of taxes. California's Proposition 13 cut property taxes, especially land taxes, while Texas relies on property taxes to a much greater extent.
Substantial taxes on land make land speculation unprofitable and prevent real estate bubbles from expanding too far. Also, no one rolls up his acreage and carries it to a state with lower tax rates or more inaccurate and outdated assessments.
California's high income and business taxes, by contrast, give people incentive to take their skills and mobile capital elsewhere. Low property taxes contributed to the real estate bubble being so severe in California. Proposition 13 not only limits tax rates, it prevents assessments from increasing as long as the property remains in the hands of the same owner.
To see the whole article, click here
JJS: Having to pay tthe overhead of ongoing land taxes or land dues, owners of the prime downtown sites would no longer speculate but put their lots to best use, infilling cities. That would put more buildings side by side, saving heat, and shorten trip distances, so people could switch from driving to riding. The changes would both save energy and avoid pollution plus reduce the cost of living, especially beneficial to -- attention -- WalMar shoppers.
Editor Jeffery J. Smith runs the Forum on Geonomics.
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