Choose: Bankruptcy in Solidarity or Survival in Reality

In today’s Washington Post, Harold Meyerson attempts to suck us into his view of the world. Imagine how he gets to this line:

It was, in short, just a normal day in contemporary American capitalism.

Any number of scenarios could build to that. When you have an aversion to economic liberty because it means some people will “lose,” you arrive via this route:

On March 28, Circuit City announced that it was laying off 3,400 of its salesclerks. Not because they had poor performance records, mind you: Their performance was utterly beside the point. They were shown the door, said the chain, simply because they were the highest-salaried salesclerks that Circuit City employed.

Their positions were not eliminated. Rather, the store announced that it would hire their replacements at the normal starting salary.

One can only imagine the effect of Circuit City’s announcement on the morale of the workers who didn’t get fired. The remaining salesclerks can only conclude: Do a good job, get promoted, and you’re outta here.

I’m in a somewhat useful position to critique this. As of next Friday, I will not have an active client. The funding for the project I’ve been working on disappeared. I’m a bit concerned, but I’ve planned for this possibility. That’s mere responsibility. But as much as capitalism can be blamed for losing my current contract, it will also be responsible when I land my next contract. Change may mean death for some opportunities, but it’s only the natural re-ordering in response to reality. This is inherently good.

In the case of Circuit City┬╣, what function do salesclerks serve? When I visit an electronics retailer, I either know what I’m looking for or am browsing to discover what’s out that I’ve missed. I rely on the Internets for my pre-education, if you will. I rarely make an impulse buy. (Danielle is saying “no kidding” right now.) The one time in recent memory where I did make an impulse buy, I called my brother from the store and asked him to pull up reviews of the product. I gave my usual “just browsing” response to any salesclerks who accosted me offered to help. I didn’t need anyone other than a cashier, and if a store offers self-checkout, I always do that. From my anecdotal observations, most shoppers behave this way. Expert knowledge is no longer valuable in store the way it used to be.

That doesn’t stop Mr. Meyerson:

Over at Wal-Mart, the employer that increasingly sets the labor standards for millions of our compatriots, wage caps have been set for certain jobs, and many longtime employees are now required to work weekends and nights in the hope that they’ll quit. A memo prepared by a Wal-Mart executive in 2005 for the company’s board noted that, “the cost of an associate with 7 years of tenure is almost 55 percent more than the cost of an associate with 1 year of tenure, yet there is no difference in his or her productivity.”

(That, of course, is because Wal-Mart does nothing to raise its employees’ skills lest it have to raise their wages.) Coincidentally, in the same week that Circuit City axed its clerks, an analysis of Internal Revenue Service data from 2005 that became available showed that the bottom 90 percent of Americans made less money that year than they had in 2004. According to a study by economists Emmanuel Saez of the University of California at Berkeley and Thomas Piketty of the Paris School of Economics, total reported income in the United States increased by 9 percent in 2005 over its level in 2004. All of that increase, however, came from the wealthiest 10 percent of Americans, and the wealthiest 1 percent experienced an increase of 14 percent. Among the remaining 90 percent, income actually decreased by 0.6 percent.

Capitalism, as cruel as it is, generally demands that one provide more value to earn more return. If Mr. Meyerson prefers the world of government, his skewed view is understandable, for the government is far more lax in requiring measurable return for its increased expenditures. But the government has guns to enforce its demands. The private sector must use persuasion.

When Mr. Meyerson quotes the IRS data showing a decrease in income for the “bottom 90 percent”, the only context he provides involves the change in income for the top 10 percent. Big deal. There is more than just income to determine how well a person is doing. Mr. Meyerson offers no analysis of how this affects Poor American other than the outrage we’re supposed to feel because his absolute dollar income decreased. This is the fallacy of a mind unconcerned with the basics of economics.

There’s a bunch of progressive gobbledygook in the rest of his essay, but given his poor economic foundation, Mr. Meyerson offers little beyond the usual chants. Unions! Health care! Equality! Blech, all socialist crap. When American workers who buy into this start treating themselves as mini-capitalists offering a product rather than pawns in a game for business elites, this drivel will die away from all but the tiniest group of “intellectuals”. Until then, we’ll suffer through more harmful policies masquerading as help for the working man.

┬╣ I shop at Best Buy because I like it better and I’ve only had bad experiences the last few times I’ve given Circuit City a chance. But the buying process is the same.