Monday, January 10, 2011

2nd Hand Pose

There's a reason why they call Chicago the 2nd City-and it's not because the intelligence of their elected officials is second to none. In yesterday's NY Daily News, a Chicago alderman waxed ineloquent about what Wal-Mart has meant to her neighborhood. But before commenting on her opinion of the Walmonster, someone should do a Barium enema on the relationship between the pol and the company-but we digress.

In the first place, it is always instructive when electeds tackle academic research-kinda like bringing knives to a gun fight: "I understand a study on the economic impact of Chicago's first Walmart store, which opened in 2006, has been garnering some attention in New York City. Those opposed to letting Walmart open its first store in New York City have been holding up a skeptical report, released in 2009 by the University of Illinois at Chicago Prof. David Merriman and Loyola University, as supposed proof that Walmart hasn't increased retail or job opportunities in my city."

Having ghosted quite a few op-eds in our time, we can always spot the inauthenticity when it rears its unattractive head. So, "I understand..," in the beginning of the narrative means that the folks at Big Wally have sat down with their "public servant" and have informed her about the transpirings here in NYC-hard to imagine that the alderman spends her time watching the NYC political scene-so she writes in the, "in for a penny, in for a pound," manner of a retainer in the Wal-Mart retinue.

We were fascinated, however, by her self description: "As an elected official who has long championed expanded economic development opportunities in diverse, underserved urban communities, I feel compelled to set the record straight." Compelled? Is it any wonder that a key phrase in the narrative of legislative action is called, "pay as you go?" What we see here is the species of booty capitalist in its most pristine form.

And we do so much cherish the term, "undeserved." This is a term that has been designed and used to ignore and denigrate the efforts of minority entrepreneurs to open supermarkets and other retail outlets in low income neighborhood. Unlike the Walmonster, these Mom and Pop stores lack the resources to wine and dine-and pocket line-the local electeds. They therefore get the Ralph Ellison "Invisible Man" treatment from the booty capitalists on the public payroll.

But what is truly disturbing about the alderman's posturing, is that she seeks to transpose the experiences in her own neighborhood onto those of NYC: "Walmart has been a boon to my constituents on the far West Side of Chicago. The change is obvious. No academic research, especially not a flawed research report, will convince me otherwise. I'm not an economist, but I know that Menards, Food4Less, Aldi, CVS, Burlington Coat Factory, Chase and Bank of America are just a few of the companies that have opened new businesses within a half-mile of the new Walmart - all since Walmart opened four years ago. That means hundreds if not thousands of Chicago residents on the West Side are now able to work and shop in their own neighborhood. In these tough economic times, that is saying quite a lot."

What does this have to do with, let's say, East New York-where thousands of New Yorkers are already, "working and shopping in their own neighborhood?" And what the alderman is describing-with the store openings cited-is, assuming that there was an existing small business community on the West Side, the displacement of independent stores by a chain saw massacre. If, however, her community was truly devoid of a thriving retail stores, then her prattle has nothing whatsoever to do with East New York-or almost any other NYC neighborhood.

The alderman, though isn't satisfied with simply praising the value of a Walmonster: "I'm not a real estate expert, but I know that if a store that closes on the near South Side - 4 miles away from the Walmart - it might be closing because of the difficult economy, poor management or even perhaps because of new competition nearby. It is simply dishonest to suggest, as the study does, that virtually every store going out of business in a densely populated, urban area can be blamed on one Walmart."

Not only is the alderman no real estate expert, but she has little expertise about the economics of the impact of a Big Wally invasion-or much else, it seems. But how could she when, like a dependable marionette, she lip synchs the lyrics that have been given to her by her paymasters. The fact remains, that small business fails all the time-but it happens to do so with unmistakably greater frequency when the Walmonster comes to town. And when it comes into an area where small retailers are doing well, the end result is a zero-sum game that leads to the demise of a high percentage of the smaller competitors.

In our view, listening to a pol whose allegiance to Wal-Mart may be in some manner suborned by crass considerations is risky-and the local elected official has a rich history, gleefully reported on conservative web sites, shilling for the Walmonster. But perhaps that's because she, like so many of her colleagues in low income neighborhoods have historically failed in promoting true economic development in their neighborhoods-making the Wal-mart option a simplistic alternative that smacks of misdirection from a development track record of failure.

The Chicagoist has the insight here: "And while an argument that treads issues of race and class rages over what may or may not be 300 new jobs on the South side of Chicago, a better opportunity for higher-paying jobs and a larger economic impact region-wide is passing Chicago by. A study done for the Alliance for American Manufacturing demonstrates that roughly 18,000 new jobs would be created for every $1 billion in new infrastructure spending on the nation’s transportation, energy, water systems, and public schools. That comes at a cost of about $55,000 per job. And an in-depth look at manufacturing in Indiana showed that a state-wide manufacturing workforce of nearly 575,000 supported another 1,194,787 jobs through the multiplier-effect. What does any of this have to do with jobs on the South Side of Chicago? If supporters of good jobs in Chicago continue to let Walmart weigh them down as an issue, the city (and its citizens) will miss out on opportunities to bring high-wage jobs, and the subsequent jobs they can support, into our communities."

This argument is germane to the NYC situation-where the Bloombergistas have promoted the malling of the city-with its attendant low wage retail and small business killing malls-as its only economic development policy. In the process, the manufacturing and distribution businesses that are true economic and job creating engines, are eschewed for the cheap sugar high that large retail malls bring. Nothing symbolizes this better than NY's loss of three famous bakeries under the Bloomberg regime-a lamentable situation that saw the NYC EDC do absolutely nothing to interdict.

Arguing that Wal-Mart is a great economic development tool, then, is fatuous-and helps camouflage the abysmal failures of urban electeds to create sustainable economic developments. The one sector in NYC that has created real economic development here is the small businesses in the retail and wholesale businesses-and they have done so in the face of confiscatory taxes and onerous regulations.

Now, in the midst of the Great Recession, they are trying to hang on in anticipation of the turn around that we all hope will come soon. Wal-Mart will be the ultimate knife in the back for these real job generators-minority store owners in East New York like Anthony Espinal, Mark Tanis, and Louis Hernadez. The Walmonster would be a negative factor in NYC's current economic crisis-and we don't need a paid shill from Chicago to convince us otherwise.