Tuesday, April 9, 2013

Shave a little here, a little there. Who will notice?

Last week Bloomberg News published a story about the pervasiveness of reports that Walmart stores across the country are experiencing empty shelves and poor service from a shortage of employees. The total number of Walmart employees has stagnated compared to the number new stores that they have opened.

There is possibly another contributing factor to all the reports of empty Walmart shelves that could indicate accounting fraud. In a civil suit a fired manager claims that all the managers in his district were pressured to falsify inventory reports to keep inventory shrinkage under control. An expert witness hired by the former employee has testified in deposition that the numbers he was able to examine showed that not only were stores having little or no shrinkage during the time in question but many had overages. Walmart provided no explanation in accounting reports how this was possible even though they included the numbers in audit report totals.

Inventory reports affect the bottom line of a retailer quarter to quarter. If Walmart corporation has been doing this chain wide in order to appear profitable during a time when profits were very slim during the Bush recession (that hasn't really ended for Walmart) it could constitute securities fraud.

Under the sort of 'just in time' inventory control system that Walmart brags about, a practice of 'cooking the books' over any length of time would start to show up with stores not having enough inventory to keep the shelves full. Even a small amount each quarter would eventually add up to significant numbers as the only way to get back to zero would be to start showing really large amounts of shrinkage.

Walmart still isn't having good quarters even as the economy is slowly picking up, so maybe they have been able to hide it all successfully. It's hard to believe a company the size of Walmart could get itself in that much trouble, but major retailers have disappeared in the past from doing just this sort of thing. www.prairie2.com  and twitter @BruceEnberg

Monday, April 8, 2013

Rust in Hell

Why can you say about Maggie Thatcher? Simply put she was the evil that spawned Reagan-ism. Her apparent success reforming England from a country that made things and took care of its people into the country that did neither, emboldened the rich in the US to also push for 'supply side' economics. 'Supply side' is the 'down is really up' notion that if 'unfettered by the tyranny of government' the rich will take care of everything. We don't need 'demand' from workers making a good living, we're the 'creators' of supply, and therefore wealth. (our wealth, by taking yours)

Even Jimmy Carter fell under the thrall of the Iron Lady and pushed deregulation of trucking and airlines. When Ronald Reagan came to power he simply stopped enforcing laws intended to rein in corporations, in effect he de-criminalized the behavior of the robber barons that have been taking the country apart ever since. London and New York became world banking centers and on paper they've done marvelous things. If you call capturing all the middle class wealth for themselves a marvelous thing, Mitt Romney thinks it's 'marvelous'.

Thatcher did more damage to England's industrial base than Hitler's bombers ever could, and it has never recovered. Reagan and his successors have done the same here. Just in the US, the last 30 years have seen 250,000 factories closed. Thatcher went on take huge 'speaking fees' after being forced from office as England sank beneath the waves. You see she was still very popular with those she took from just being rich to super rich status. Just as Bill Clinton would receive hundreds of millions in 'speaking fees' ten years later for the same reasons. In the old days we called those bribes. Reagan actually raised a stink by taking two million in 'speaking fees' from the Japanese immediately after leaving office, how times have changed. Of course his 'dementia' had to suddenly become acute for him to stay out of prison from Iran-Contra, so the 'speaking fees' dried up.

The Germans stayed with a progressive system and have flourished. If they start adopting the austerity that bankers are pushing now they may find themselves being Thatcherized as well. You see these are the same bankers doing the same thing in Europe that they did in the UK and the US. Sharks have to keep swimming and eating. They don't build things, it's not their nature.  www.prairie2.com  twitter @BruceEnberg

Sunday, April 7, 2013

How to get out of the current Great Depression

Before you can do any of these things you will need public campaign financing so that Congress actually reflects the will of the people. State government would need the same. A Constitutional Amendment could enforce this at all levels and guarantee the right to vote.

1 - Immediately raise the minimum wage to the level set in 1938, adjusted for inflation, about $11/hour. Over the next five years raise it to reflect real worker productivity of about $22/hour. Increase all government benefits to reflect the true cost living. Repeal all 'right to work' laws.

2 - Ramp up infrastructure spending until we reach full employment.

3 - Reinstate tariffs on anything we still make here and gradually reintroduce them on everything else.

4 - Make all higher education free and forgive all outstanding loans.

5 - Nationalize the Federal Reserve & seize all the 'too big to fail' banks. Establish a plan to replace all                   commercial banks with credit unions.

6 - Begin enforcing anti-trust laws. No national chain stores, period. No conglomerate companies. Make 80% of what Wall Street does illegal. Ban retirement money from being 'invested' in Wall Street Ponzi markets.

7 - Ban 'for profit' energy production. Put big Agri-business companies out of business. Introduce land reform and government support of small sustainable farming operations. Require farmers to join organized price contracting groups and put real teeth in them.

8 - A one time wealth tax on estates over a billion dollars. Reinstate inheritance taxes.  Ban paying CEOs in stock, require boards to include workers.

There are a lot of other things to be done of course, but a real Congress that is elected by the people, not by lobbyists and big money donors could easily tackle these problems. When enough people know what the real questions are, then we can get real answers.