UPS - Wal-Mart and Inflation

Submitted by SadInAmerica on Fri, 03/21/2008 - 1:17pm.

All the promotion for a worldwide economy as the answer, misses the mark, when Americans shop for their basic needs.

Recently a corporate institution, United Parcel Service of America, issued a press release an announced an account that offers an insight in things to come. The UPS report, called Operating in Unison, provides a detailed look at the company's impact on communities worldwide, both progress made and areas where the company remains constructively dissatisfied. To place this in perspective UPS would be considered a major employer. "As a company with 360,000 employees, 88,000 vehicles and 2,850 facilities worldwide, we realize that UPS has a significant impact on society, the global economy and on the environment," said Mike Eskew, their chief executive officer.

Compare the size of their organization with Wal-Mart. The Wal-Mart department store chain, employs 1.3 million people at 4,700 stores worldwide, and in 2002 became the largest corporation in the world. Reported in an EIR article: Wal-Mart Is Not a Business, It's an Economic Disease, the following sums up the secret to their success: "In 1987, a turning point came for Wal-Mart, when it opened its first superstore, called Hypermarket*USA, modeled on the hypermarkets of Europe. At that time, the average clothing or grocery store in America had 15-22,000 square feet of space. By contrast, the hypermarkets, now called supercenters, had 150-200,000 feet. The supercenter was based on the idea of one-stop shopping: In the same store, one could buy groceries, merchandise and appliances, fast food, and photo development; one could also do one's banking. Wal-Mart took advantage of an advanced inventory system; its bulk purchases of goods, which led to price discounts; and a ferocious anti-labor policy keeping wages very low."

As UPS and Wal-Mart fare, so goes the country. For a reliable gauge of the condition of the domestic economy, just watch the trends of these two companies. Inferring that these businesses are the modern day equivalent of General Motors in a more uncomplicated era of industrial manufacturing, avoids the impact of the globalism mentality.

In it's most basic terms, consumers require the ability to buy what they need to sustain their existence. There are two fundamental methods to purchase goods.

1) Acquire your goods from a store and cart them back to your home. Whether buying at retail or wholesale, if you pick up at the distribution center, a visit is required.

2) Have your purchases transported directly to your residence. If you buy online, make mail and telephone orders or contract for a physical deliverance, you depend upon a delivery service.

The price you pay seldom conforms to the cost you believe a product is really worth. The idea that competition is alive and well in a free marketplace seems to escape the bottom line of the bill of sale. As organizations grow in size and reach do they really reduce their prices to their customers? If efficiency is the goal of a corporation, and profit the reward, where does the customer fit into this equation? The answer clearly points to the function that the consumer is the cash cow that feeds this continuous treadmill cycle.

If you avoid UPS, you can use FedEx, DHL or Airborne. And if you get desperate, there is always the US Postal Service. But what price will you pay? Review the charges at your local post office for registered and certified mail, return receipt and every other service they offer. Now compare those prices with the official government stats for inflation. Does this compute or are you in the middle of a ride on a time machine that is in need of repair?

Now look at the interest rates your local bank pays on your saving account and compare that to the annual effective rate they charge on monthly payments for carrying a balance on your credit cards. HELLO !!!  Are we really supposed to believe that inflation is non existent?

Henry Ford built his first car in a garage, had high pay scale workers assemble the model T; but today a F150 truck can only meet the government safety standards if it sells for the equity in your house. So there is no inflation in the economy . . . what world do you live in?

Even the most devoted Free Trader knows that the bargain basement prices at Wal-Mart are based upon cheap foreign imports. The rural areas that bring Wal-Mart into their community watch their shopkeepers transform into door greeters. How long will the superstore sell at discount prices, when K Mart closes, Sears tanks and Target become the focus of the cross hairs?

What has dramatically changed is that the options in kind have diminished, while the variety has increased. Greater selection in consumer items may well have flourished, but the basic system for completing the business transaction has fallen to dangerous levels of competition. At the core of the shopper syndrome is a deception that deals exist and costs are reasonable. Examine the options to fulfill your needs and you will see that no customer service representative will be able to lift you out of poverty with another sales offer.

How many houses do you need to refinance to afford the postage to send in your monthly bank payments? This point should not be dismissed as hyperbolic excess. The real exorbitant costs come when there are no other stores to shop or services to deliver. When the charge of carrying debt so outweighs the return earned on capital, the prudent person pays off all their obligations. Just how may people have that practical option? Add in the under reported inflation factor and you get a recoil to your wallet that empties the cash and leaves the plastic.

Is this the kind of UNISON that benefits our countrymen? How about the DISEASE that features foreign brand, is this the medicine for a healthy economy? If society is a reflection of a mart that runs on ups and walls out domestic models of commerce, what can we expect for the future. Up up and away . . . the price of goods and services will reach the costs of government monopolies like the post office!  

Today, Wal-Mart "co-determines" the price; it tells the supplier what type of product it wants, how to arrange its inventory, what sort of product line to develop. Because Wal-Mart determines how much shelf space each supplier receives, it has life-and-death control over that supplier.

Richard Freeman and Arthur Ticknor - January 15, 2004 posted at

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Submitted by SadInAmerica on Fri, 03/21/2008 - 1:17pm.