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The War Against Poor People

By Dan Ferris, editor, Extreme Value
Saturday, November 4, 2006

Wal-Mart is quite possibly the most democratic institution in existence.

It doesn’t traffic in airy political votes. At Wal-Mart, customers vote with dollars, born of much blood and sweat. That’s a real democracy. That’s power for the people like it exists in few places on earth.

But let’s face it, most people love humanity only from afar and hate the way it smells up close and personal. That’s why so many people love to hate Wal-Mart. With Wal-Mart comes a kind of economic equality no social planner ever has or will create. Wal-Mart makes the promises of the liberal/conservative political axis ring hollow.

You want a revolution that gives people a more dignified standard of living? You got it.

Intellectuals hate real democracy, the democracy of the marketplace. All you need there is money, and most intellectuals don’t like money, because you have to earn it by being useful to another human being. When votes are dollars, they count as much to the voter as the voted. Because dollar votes cost the voter something, they are placed with care. Dollars are scarcer for Wal-Mart’s core customer than for most people reading an investment letter.

And they’re scarcer for Wal-Mart’s customer than for the members of anti-Wal-Mart labor unions, and for government functionaries with plumb jobs and fat benefit and retirement packages.

Dollar-votes are scarcer for Wal-Mart’s customer even than for those who don’t work at all. Those who don’t work at all don’t earn money, and therefore value it less than the working lower and lower-middle class, who pay most dearly for the nonworking poor. The working poor are those whom Wal-Mart helps the most.

Those are the true, de facto targets of the war against Wal-Mart, which I truly believe is a war against poor people.

Wal-Mart’s pseudo-intellectual assailants are trying to dupe unsuspecting people of modest means, people who might be desperate to better their lot in life, into believing that they, the intellectuals, know what’s best for them, the hoodwinked, downtrodden masses.

Some, at least, are up front about it. In an excerpt from the book, The Case Against Sprawl (one of Wal-Mart’s alleged sins), numero uno Wal-Mart hater Al Norman writes, “Sprawl is often mistaken for economic development, and the people it affects the most are least likely to understand it.”

To hear Al Norman tell it, you could no sooner tell sprawl from real economic development than you could distinguish the transubstantiated bread and wine from the body and blood of Christ. The latter, after all, are one and the same. The former only look the same to us – the poor, the benighted, and the uninitiated.

Don’t get me wrong here. I’m not here to lionize people just because they have little money. It’s been my experience that many people of perpetually limited means have suffered from tragically mistaken ideas about fundamental issues like money, work, and telling the truth. I’ve lived among them, been robbed by them, and seen them drink, smoke, shoot, snort, lie, cheat, steal, spend, and impregnate their way into penury.

Nor do I apologize for any mistakes Wal-Mart may have made along the way.

For example, if, as lawsuits allege, Wal-Mart makes people work off the clock (i.e., for no pay), it needs to cut it out right now. I don’t fantasize that any company can ever be completely devoid of conflicts of interest. What you have to do is find communities of interest that far enough outweigh the conflicts. Wal-Mart is a revolution; ergo, the conflicts are outweighed.

But we all know who Wal-Mart’s core customer is. He or she averages $35,000 a year in income, about 20% below the national average. We all know Wal-Mart’s unskilled, undereducated, rank-and-file employee, too.

If you’re at war against Wal-Mart, you’re at war against these people, including its workforce of 775,000 women, 139,000 Hispanics, 208,000 African Americans and more than 220,000 “senior citizens.” (The awards Wal-Mart has gotten from minority groups would fill at least one whole page of this website.)

Many of these people would be on welfare if they didn’t work at Wal-Mart. That empowers people to make a life for themselves.

Good investing,

Dan Ferris

Market Notes


In our October 5 edition, we mentioned several ways to play a bull market in agriculture: Buy farmland in Iowa... own a grain-heavy ETF... or own stock in companies that prosper when farmers are making more money.

One such stock is Agrium. Based in Alberta, Agrium is a global giant in the agricultural fertilizer and nutrient business. With the prices of corn, soybeans, and wheat jumping to new highs this week, Agrium’s stock price is hitting new highs as well. The stock is up 67% in the past two years.

High grain prices mean richer farmers. Richer farmers make for healthy business at Agrium. If you need more evidence the agricultural sector is booming, this week’s chart provides it.

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