[FoRK] RE: FoRK Digest, Vol 12, Issue 5

johnhall johnhall at isomedia.com
Sun Mar 7 13:57:13 PST 2004

> Message: 5
> Date: Thu, 4 Mar 2004 19:42:32 -0500
> From: "Geege" <geege4 at bellsouth.net>
> Subject: [FoRK] san francisco travels east at the rate of 48 miles a
> 	year
> whenever i contend that walmarts are ruinous and distasteful (daily)
> someone (usually from texas) tells me how wallmarts and other 
> giant chains keep stuff affordable.

Because they do.  Otherwise, they wouldn't be so successful.


The usual suspects that practice guilt by association and vested
interest don't seem interested in deconstructing the backers of this
site: A fine bookstore in Austin that has a vested interest in the
outcome of this study and a 'public' interest group that makes money
consulting with governments.

The heart of the argument is that if you spend $100 at a local firm
(like BookPeople) then $45 will get spent in the local economy while if
you shop at Borders then only $13 will be returned to the local economy.
Those figures are enhanced by what they claim is a standard multiplier
which they don't bother to mention, and their site only includes the
executive summary for their conclusions rather than the detailed
analysis (and you have to dig for that).

Ok, lets assume the figures are even worse than they claim.  I rather
like comparing $100 and $0.  The local firm spends every dime in the
local community, while the foreign firm spends zero zilch nada.  So we
should prefer the local company, right?

Only if their prices are lower.  But if there prices were lower we
wouldn't be having this conversation, would we?  So the argument is that
we should force people to buy higher priced products to support the
local rich instead of those foreign people.  (To bad about the poor).
Do you think stores competing to be the least efficient, provided that
this efficiency is achieved via overpaid labor, is a good thing?  [The
business owners and the unions have a reason to say yes.  Everyone else
gets screwed with a capital 'S'.]

If you raise issues like this with most Economists they start muttering
about Ricardo and Comparative advantage at this point along with the
broken window fallacy before ignoring you.

If I'm dealing with international trade, I can point out that the
dollars *will* come back and if they don't that is even better -- we get
useful things like toyotas that we trade for pieces of paper with
pictures of dead presidents on them.  If the Japanese want to trade
toyotas for dollar bills that they use for wallpaper, where do we sign

Austin is a little more of a problem since they can't print their own
currency.  I guess it is at least possible that Austin produces nothing
of value to people outside their city limits.  Although I hear they have
a reasonable University, second only to Texas A&M in the state.  Are you
really interested in a beggar thy neighbor policy, favoring Austin over
Little Rock?  "No dollars going out" ultimately means "No dollars going
in, either".

[Note: this doesn't mean that giving tax breaks to a particular business
is a good idea.  More likely it would be better to simply lower taxes
across the board.

I also like BookPeople.]

> (i've hear that six of ten cars sport the bumper sticker.)
> http://www.keepaustinweird.com/

They are probably fascinated with the self-congratulation they can get
by pointing to "The Rise of the Creative Class".

But they haven't caught up with the critics:

The Curse of the Creative Class

If you take out the internet bubble, 'creative class' cities like Austin
and San Francisco get clobbered by non-creative class cities like Las
Vegas and Memphis.

Lower economic growth and not higher growth is, after all, the expected
result of high taxes to support rich elements of the 'creative class'.
Yet it is obvious why a politician would jump on an idea that claimed
higher taxes would lead to more, not less, growth.

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