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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsKunstler--Scale Implosion: After Ruining America, the Era of Giant Chain Stores Is Over
http://www.commondreams.org/view/2013/02/20-1The older generations responsible for all that may be done for, but the momentum has now turned in the opposite direction. Though the public hasn't groked it yet, WalMart and its kindred malignant organisms have entered their own yeast-overgrowth death spiral. In a now permanently contracting economy the big box model fails spectacularly. Every element of economic reality is now poised to squash them.
In a now permanently contracting economy the big box model fails spectacularly.
Diesel fuel prices are heading well north of $4 again. If they push toward $5 this year you can say goodbye to the "warehouse on wheels" distribution method. (The truckers, who are mostly independent contractors, can say hello to the re-po men come to take possession of their mortgaged rigs.)
Global currency wars (competitive devaluations) are about to destroy trade relationships. Say goodbye to the 12,000 mile supply chain from Guangzhou to Hackensack. Say goodbye to the growth financing model in which it becomes necessary to open dozens of new stores every year to keep the credit revolving.
Then there is the matter of the American customers themselves. The WalMart shoppers are exactly the demographic that is getting squashed in the contraction of this phony-baloney corporate buccaneer parasite revolving credit crony capital economy. Unlike the Federal Reserve, WalMart shoppers can't print their own money, and they can't bundle their MasterCard and Visa debts into CDOs to be fobbed off on Scandinavian pension funds for quick profits
Demeter
(85,373 posts)There are so many ways to rig the situation, and I'm sure they will try each one in turn, or maybe all of them at once...
I've given up hoping that the laws of nature and physics will ever apply in this nation again...I don't think anything except the complete disruption of the weather for several quarters (at least 40) would do it.
xtraxritical
(3,576 posts)Demeter
(85,373 posts)Ikonoklast
(23,973 posts)Posted last week.
http://www.democraticunderground.com/10022395220
quaker bill
(8,224 posts)1) permanent contraction in the economy - don't think so.
2) global currency wars / devaluations - no real evidence - and even if so little is better to deal with it than "just in time inventory". (what you don't want in such a scenario is a huge stash of goods bought with yesterday's money)
There is a problem called creative destruction, where someone will find the weakness in their model and exploit it. They are huge and being huge is inherently risky, because if it unravels, it goes large and fast.
Katashi_itto
(10,175 posts)Mainly with 1.
First may I point out that we are a consumer driven economy.
Now with that in mind envision our ecomony as a Boa consctrictor thats just fed. A huge lump is in the Boa. View that lump as the Baby Boomer gen.
As the Baby Boomers go into retirement they spend less, several studies back that up. Retired folks simply dont spend as much.
That huge demographic section as they spend less will cause a contraction in the economy.
HiPointDem
(20,729 posts)Katashi_itto
(10,175 posts)Of the purchase of a Sailboat vs 10,000 Washing machinnes. The Washing machines have a larger impact on the economy.
HiPointDem
(20,729 posts)U.S. Economy Is Increasingly Tied to the Rich
Consumer spending accounts for roughly two-thirds of U.S. gross domestic product, or the value of all goods and services produced in the nation. And spending by the rich now accounts for the largest share of consumer outlays in at least 20 years.
According to new research from Moodys Analytics, the top 5% of Americans by income account for 37% of all consumer outlays. Outlays include consumer spending, interest payments on installment debt and transfer payments.
By contrast, the bottom 80% by income account for 39.5% of all consumer outlays.
http://blogs.wsj.com/wealth/2010/08/05/us-economy-is-increasingly-tied-to-the-rich/
loudsue
(14,087 posts)The 1% buy more of some goods & services, but their dollars don't recycle themselves through the economy. So any gain falls off. When there is more money in the hands of the by-gone middle, and upper-lower, classes, money goes round & round in the economy, so there is actually a show of the growth.
WSJ (owned by Murdoch) is trying to make it look like there is a purpose for the rich. They serve no purpose for the good of our society. They don't buy thousands of anything. They buy one really expensive something. It isn't a broad consumer base.
HiPointDem
(20,729 posts)It's a *fact* that the bottom 80% spend less than the top 20% -- because they have less income -- both as individuals and in aggregate.
It's not that difficult to understand, and the reportage isn't a Murdoch plot.
http://www.kiplinger.com/article/taxes/T054-C000-S001-where-do-you-rank-as-a-taxpayer.html
The chart above is a summary of individual tax filers. It omits, e.g. unemployed people who don't file taxes.
Katashi_itto
(10,175 posts)HiPointDem
(20,729 posts)tax filers only have 12% of the income?
Do you have trouble with the math?
Katashi_itto
(10,175 posts)Last edited Wed Feb 27, 2013, 10:52 AM - Edit history (1)
1 piece of Jewelry is a large expenditure but it has little economic impact to the purchase of 1000 automobiles. But please do go on spouting right wing talking points.
Simple fact. the larger the % in net income the wealthy take home the less gets funneled back into the economy. Its a vast sucking sound.
HiPointDem
(20,729 posts)Katashi_itto
(10,175 posts)HiPointDem
(20,729 posts)consumers have only 12% of the spending money, ergo they are not big consumer spenders.
The top 20% have most of the income ergo do most of the consumer spending.
Katashi_itto
(10,175 posts)"consumers have only 12% of the spending money, ergo they are not big consumer spenders.
The top 20% have most of the income ergo do most of the consumer spending."
God you just worship the wealthy...
No, they do not do most of the consumer spending, hence why the anemic GDP growth.
The wealthy invest it in nonproducing financial gimmicks/ keep it/ move it to the Cayman Islands.
Less and less gets put back into circulation.
HiPointDem
(20,729 posts)the time.
Katashi_itto
(10,175 posts)HiPointDem
(20,729 posts)Katashi_itto
(10,175 posts)my point.
Higher income brackets netting more means less money gets dumped back into the ecomony.
Higher income brackets push their money towards financial instruments/Overseas accounts and doesnt go back into circulation in any major way.
Well over a trillion dollars is thought to be held by the higher income brackets, not even counting corporations.
Seriously go back to reading "The Blaze"
Katashi_itto
(10,175 posts)If anyone has an interest in making the wealthy look like they drive the economy it's those two institutions.
Again your talking taxes and not expenditures. Plus that's the LISTED. The effective average tax they really pay is less than half that, if your lucky.
They very fact you are pushing RW talking points speaks volumes.
My posit stands.
HiPointDem
(20,729 posts)spending power, you're mistaken. Even if they doubled their income every year by taking out loans they still have less to spend than the top 20%.
Sorry you think calling the self-evident relation between income and consumer spending 'propaganda' wins the argument.
The chart comes from IRS statistics and clearly shows the percentage of income each quintile takes home. It's not just about taxes.
sendero
(28,552 posts)... does, it is not growing the economy in a meaningful way now, nor is it next year or the year after that or ... ever.
Spider Jerusalem
(21,786 posts)permanent contraction or at least the end of growth; resource and energy constraints will see to that. Energy constraints were the primary driver of the 2008 collapse; conventional crude oil production peaked in 2005, has been on a plateau since. Oil prices increased up to $147 a barrel at their peak, thanks to lack of spare capacity and rising demand from developing economies. Ballooning fuel costs in the USA fed into the subprime collapse as the working poor who took out those risky loans found themselves faced with the choice between putting gas in the tank and paying the mortgage. Things evened out a little thanks ironically to the economic crisis which led to demand destruction; if and when growth picks up and returns to 2006-2007 era levels worldwide? You can pretty much count on the same thing happening all over again.
quaker bill
(8,224 posts)Supply is up, demand is down. Shale gas is now so abundant that it is pricing coal out of production. Whether a good thing or not, it is real.
Currency collapse is a vastly oversold idea that has been used to market gold, guns, and freeze dried food in Glenbeckistan. The real threat of currency collapse happened in 2008, it didn't but nearly happened. Interestingly the solution was running up more debt and "printing" lots of new currency. The plutocracy owns most of the dollars and has a massive interest in their value being maintained.
While I am sure energy prices had a minor role in the collapse, it was hardwired well before it happened. People where I live were being sold $300K+ mini mansions on liar loans without proof of employment, proof of income, or credit checks. If you had a pulse and could sign your name, you got the loan, literally. The house was not even the point, it was just a vehicle to sell a mortgage and use it to shake down a bank for cash. The mortgage was the real profitable product, houses were only needed to sell them. These folks were never making the payments, even of fuel was free, it still would have collapsed.
The same thing will happen again because it is the nature of the capitalist system to produce booms and collapses. The specific factors involved in each incident will vary, as will the impacts.
Kuntzler premises his analysis on a poor understanding of the current dynamic. There are reasons to expect the Wal-Mart model to fail, but I am pretty sure he is wrong about how it will happen.
Spider Jerusalem
(21,786 posts)And nonconventional oil sources have a lower return on energy investment, for one, and require a higher price per barrel to be economically viable resources, for another ($80 a barrel and above, for tar sands/oil shale). And shale oil has its own problems, high rates of decline in producing fields being just one of them. Demand is down because the global economy hasn't recovered from the last crash, yet (and demand is only down in the US and Europe, global demand is at 90+ million barrels a day, which is an all time high level).
Ikonoklast
(23,973 posts)Natural gas, gas condensates, and oil are all coming out of those fields, especially the Utica.
There is currently a build-out of infrastructure for the use of these resources for transport fuel, and they are economically viable today, and will be even moreso as refined petroleum products get more expensive.
These fields are already knocking coal out of the picture for electrical generation.
quaker bill
(8,224 posts)As energy supply increases and sources diversify, the impact of any one sourse diminishes. Peak oil is fun stuff, but we are findiing a way around it already. As stress grows, movement away will intensify.
jollyreaper2112
(1,941 posts)He has a very strong point of view. I think (hope) he's skewing a little more pessimistic than is warranted but he's not all wrong. I do confess to enjoying his work.
Ikonoklast
(23,973 posts)He puts forward opinions unsubstatianted by fact or scientific study as immutable truth.
What he writes is fiction.
Kunstler makes doomsday predictions on a regular basis, has done so his entire career, and none of them ever come to pass.
I put his writings on par with people that write about ancient aliens who built the pyramids.
whatchamacallit
(15,558 posts)Milton Friedman and Alan Greenspan are renowned economists. They are (were in Friedman's case) also delusional fools. Your criteria for acceptable opinion is lame.
Ikonoklast
(23,973 posts)The opinions he stated are laughable on their face, and easily proved to be downright nonsense.
His understanding of logistics is nil. The basis upon which he forms his opinion is something he invented, disregarding actuality.
One can extrapolate that his other opinions are therefore also not based on reality, experience, study or fact in any way.
As to economic theory, I am not an expert but share your opinions about Friedman and Greenspan.
You might want to research Kunstler's other prognostications if you haven't yet, they are quite a body of fail.
Kunstler is a theater major that writes science fiction. Seems fitting as most of his non-fiction blatherings employ both disciplines.
Doremus
(7,261 posts)In suburb after suburb there are huge vacant eyesores that used to be shopping malls, strip centers and/or big box stores.
Ikonoklast
(23,973 posts)Over-building of retail space in anticipation of both population and wage growth before the 2008 crash has more to do with that than the reasons stated by Kunstler.
Much of that is also due to population loss as people move from one geographic area to another, leaving a smaller population behind that is no longer able to support the amount of retailers in a given area.
Aging cities and inner-ring suburbs that are losing population and have a declining median income, aging citizenry, and lower real estate prices are usually where one sees empty retail.
Funny that they are mostly in the cities to which all the suburbanites *should* be flocking to in order to survive, according to Kunstler.
See: Cleveland, for an example.
Outer ring suburbs have a vibrant retail atmosphere; that is where the money is.
sendero
(28,552 posts).. are basically correct. His extrapolations into predictions, not so great. Prediction is hard, especially when it is the future.
Do I think Wal-Mart is going to implode tomorrow? No. Do I think that their main growth is behind them, absolutely.
Wal-Mart is getting beat at their own game by the dollar stores. And it is quite true that American industry/retail/etc has not considered the FACT that once it is a race to the bottom for worker compensation, the race to the bottom for their profits is on also.
jollyreaper2112
(1,941 posts)Are you the same Ikonoklast from Common Dreams? You have a real passionate hate for him. I admit I'm the same way about Thomas Friedman.
I concur with the comment below, having a degree means you can be wrong with authority.
I dismiss the full-on cranks on either side, doomers and boosters. I consider Kunstler to be a pessimist worth listening to. On the booster side you have Diamandis and his kind. I find it hard to really find credible optimists because there's a lot of handwaving. Tech-optimist libertarians tend to cite guys like Diamandis with enthusiasm.
Crank doomers tend to strike me like fire and brimstone preachers telling us how we're sinners in the hands of an angry god, sinful and unworthy and earning our punishment. There's a masochistic glee in fantasizing about our comeuppance.
Evasporque
(2,133 posts)graham4anything
(11,464 posts)shame so many rushed to embrace them and so few tried to stop them.
Spitfire of ATJ
(32,723 posts)Quantess
(27,630 posts)If the big-box model is poised to fail spectacularly, then what is going to be successful in its place? I'm not seeing it. This looks like wishful thinking.
safeinOhio
(32,688 posts)Not sure if that'll be better or not, but will replace most box stores. Already happening for books, electronics and music.
HiPointDem
(20,729 posts)duffyduff
(3,251 posts)A low-wage, "service" economy cannot be sustained.
BlueStreak
(8,377 posts)Even before UPS and Fedex started on their multi-year campaign to kill USPS, shipping rates were shooting up. And now with USPS on the brink of collapse, the shipping prices are sky high. That takes a giant bite out of the appeal of business models like eBay. I shipped three packages to eBay customers this week. They all ended up costing at least $10 more than I had estimated. Things like the insurance rates have doubled in the last year. I had a modest 9# package that ended up costing over $30 at parcel post rates, and UPS would have been nearly $50.
The big online retailers have used their leverage to command low shipping rates, and that is screwing everybody else. Obviously UPS and the others are cutting their rates to the bone for retailers like Amazon, and jacking up the prices on everybody else.
That won't end Internet retailing, but it certainly will change the nature of it.
Before the big box wave, there were numerous local retailers I frequented. I remember an office supply place that was wonderful. You could get anything you needed, and they were happy to work with their customers to special order if that was called for. With the big chains, you get the same set of low-end crap in every store. If you want something better, there probably isn't a retailer anywhere in the area that can take care of you. That's where the Internet is filling the void. At my stage of life, I find that I have basic needs for staples, but anything more than milk and eggs, I am probably looking for a higher quality product than you can find at a Wal*Mart or even a Target. So I rarely go into any of those stores anymore.
Case in point. I have a lot of carpet in my house. My carpet cleaning machine broke after 20 years. All I could find locally was the cheapest junk that would do a crappy job and probably break inside a year. I ended up buying a top end Hoover unit that I could not find in any store locally. I had to order it from 700 miles away.
Now I am looking for a good hat shop to buy a nice fedora or something. There literally is not a single hat store in my entire metropolitan area of 1.5 million people. There is one guy who makes custom hats and works out of his house, but that's it. I will have to drive 100 miles to a city that still has a real hat store.
And as far as the staples go, many of the staples really are cheaper at Family Dollar and the other neighborhood outlets with lower overhead than the big boxes.
I have heard all about the theory of "chained CPI" that says as products come into shortage, we can substitute. I'm sorry, substituting a baseball cap for a fedora doesn't work. In a very real sense, even though we are swimming in crappy products, we have lost most of our choice in products over the past 25 years. One more step on the way to a third world society.
Sekhmets Daughter
(7,515 posts)fueled by younger workers who can't find jobs... History repeating itself.
Doremus
(7,261 posts)Hubert Flottz
(37,726 posts)bare arsed Wally World shoppers that float around the internet. I'm afraid to go there!
NoMoreWarNow
(1,259 posts)take his stuff with a grain of salt.
Ikonoklast
(23,973 posts)predicted our demise close to forty years ago now.
He's a reverse Cassandra, not one of his 'predictions' has come to pass.
NoMoreWarNow
(1,259 posts)yeah, I know what you mean.
safeinOhio
(32,688 posts)find bargains while helping the environment?
Shop and support local resale and consignment stores. I work at a large antique mall and find quality and savings on older useful items that out perform the cheap new stuff at half the price.
Jerry442
(1,265 posts)...if your entire business model is selling inexpensive stuff to the lower middle class, and the lower middle class is sliding en masse into poverty, that can't bode well for the future.
gtar100
(4,192 posts)generally vote republican which is no different than shooting themselves in their own foot. How can supporting policies that destroy the spending power of their own customers be a good thing for business. Makes no sense except in the context of individuals looking for out only for themselves for short term gains. In which case, they could really care less whether or not the businesses they run or own are successful in the long run. They'll put the cash cow up for sacrificial slaughter any time if it means a big payoff for themselves. Screw the consequences as long as they personally don't have to pay for them.... People like this would have a harder time getting the upper hand in running a business if unions actually held seats on the boards of directors.
AndyA
(16,993 posts)I miss those. Walmart has put so many small family-owned businesses out of business over the years, it would be wonderful if some of them would start making a comeback.
The biggest problem today is that most are just flat out of money. Minimum wage hasn't kept up with inflation, grocery prices have gone through the roof, gas is going up again, and the only ones making any money are the ones who don't need it. They are also the ones who already have everything, so they don't spend it and as a result the economy stagnates.
Middle America and the people who are really hurting are the solution. Increase minimum wage, and a lot of people will have money to spend for the first time in years. They will spend it, because they've put off making purchases of items for a long time. Increased demand spreads through the economy, and makes it grow.
We need to get the millionaires out of Congress, get the secret corporate money out of our elections, and have publicly funded campaigns so the average person can run for office and be competitive. The best people for the jobs in Congress aren't in those jobs, because they don't have the money to run a campaign.
As long as the wealthy rule Congress, things will not improve.
Ganja Ninja
(15,953 posts)They're taking money right out of WalMart's pocket.
snagglepuss
(12,704 posts)setup of small nieghborhood stores.
mokawanis
(4,442 posts)If citizen x can get the product he wants from a nearby Dollar store, for roughly the same price, he's not going to drive to Walmart to buy it.
Myrina
(12,296 posts)... people are going to be forced evenmoreso to shop at WalFart etc. to make what little money they have, go even further. Although with money being a finite supply, I can see "WalMart on every corner" profitability peaking and contracting in the not-too-distant future.
ThomThom
(1,486 posts)I will believe it when I see it