Category: Economics & Business

Paul Krugman

It was a merry Christmas for Sharper Image and Neiman Marcus, which reported big sales increases over last year’s holiday season. It was considerably less cheery at Wal-Mart and other low-priced chains. We don’t know the final sales figures yet, but it’s clear that high-end stores did very well, while stores catering to middle- and low-income families achieved only modest gains.

Based on these reports, you may be tempted to speculate that the economic recovery is an exclusive party, and most people weren’t invited. You’d be right.

In fairness to Wal-Mart, NewMexiKen brings you this update from the Orlando Sentinel.

The Los Angeles Times is publishing a three part series on Wal-Mart.

The first article was yesterday:
An Empire Built on Bargains Remakes the Working World;
the second today:
Scouring the Globe to Give Shoppers an $8.63 Polo Shirt.

Whether one thinks of Wal-Mart as a corporation or as a place to shop, these seem to NewMexiKen to be informative, well-done articles well worth reading.

Confused about the mutual fund scandal? The NYT’s Paul Krugman has a helpful analogy: “You’re selling your house, and your real estate agent claims that he’s representing your interests. But he sells the property at less than fair value to a friend, who resells it at a substantial profit, on which the agent receives a kickback. You complain to the county attorney. But he gets big campaign contributions from the agent, so he pays no attention. That, in essence, is the story of the growing mutual fund scandal.”

From Today’s Papers at Slate.

From Fortune.com

After years of wondering what all those fiber-optic cables laid around the earth at massive expense in the late 1990s would ever be good for, we finally have an answer: They’re good for enabling call-center workers in Bangalore or Delhi to sound as if they’re next door to everyone. Broadband’s killer app, it turns out, is India.

It’s not just about call centers. In Bangalore some 110,000 people are employed writing software, designing chips, running computer systems, reading MRIs, processing mortgages, preparing tax forms, and doing other essential work for U.S., European, Japanese, and even Chinese companies. Intel, Cisco, Oracle, Philips, and GE are among the multinationals with significant R&D facilities there. AOL, Accenture, and Ernst & Young have big operations in town too. Scores more Western corporations outsource work to Indian companies like Bangalore-based IT services firms Infosys and Wipro.

Meanwhile, GE Capital employs more than 15,000 people in Delhi and other Indian cities who answer calls from credit card customers, do accounting work, manage computer networks, and the like.

Note: Link leads to beginning of article only.

Counterfeit $20 Bills Already Circulating

From Dynamist Blog

I’ve never been to Sam’s Club, but I understand the difference between Lowe’s and Home Depot. It’s subtle but significant and has paid off mightily for Lowe’s. In the face of competition, even utilitarian environments can’t be downright ugly.

From Dynamist Blog (Virginia Postrel)

The piece reminds me of something someone who wishes to remain anonymous told me Wal-Mart shoppers say in surveys.

What’s the best part of shopping at Wal-Mart?
Leaving the store.

Or so I’m told. Low prices and a large selection do not, by themselves, make for a happy shopping experience.

From David Pogue of The New York Times

Until a few years ago, my wife was a plastic surgeon. She quit for a lot of reasons, but one was the frustration of getting reimbursement from the H.M.O.’s.

As I understand it, after sewing up, say, a car-accident victim, she would submit the proper forms for payment to the H.M.O. After a couple of months, she’d get back — nothing. As we learned later, H.M.O.’s have figured out that a certain percentage of doctors never follow up; for the HMO, that’s pure profit.

So she’d submit the paperwork a second time. This time, she’d get a check for, say, 60 percent of the billed amount — because the H.M.O.’s knew that a certain number of doctors don’t have the time or energy to fight over every nickel and dime.

And on it would go, until her career felt as though it were half surgery, and half paperwork.

From my outsider’s perspective, it looked like she had stumbled onto a new American business model: passive-aggressive robbery.

According to this post on The Volokh Conspiracy an article in yesterday’s Wall Street Journal reported “an increasing trend among employers to ask applicants for their SATs long after graduation from college.”

The Money Pitch

Been wondering about this myself.

In June (the last month with figures available) more oil was imported into the U.S. from Saudi Arabia than from any other country — two million barrels a day.

Which country was second? Third? Hint, Venezuela was fourth.

The answer.

According to a Census Bureau report issued today — Income in the United States: 2002 — median household money income last year for Whites (not including Hispanics) was $46,900, for Blacks (not including Hispanics) it was $29,000, for Asians $52,600, and for Hispanics $33,100. The median for all households was $42,900.

The median income for full-time, year-round workers was $39,400 for men and $30,200 for women.

The median household income in Maryland was $55,912, highest among the states; West Virginia was lowest at $30,072.

$150,000 last year put a household in the highest 5%; $84,000 put a household in the highest 20%. Households with incomes under $18,000 constituted the lowest 20%.

There were 109,297,000 households in the U.S. last year.

Then read Gregg Easterbrook on the still continuing Pepco power outage.

Global Rich List

• is the world’s largest private employer
• is the nation’s largest grocer
• is Disney’s biggest customer
• is also Procter & Gamble’s and Kraft’s and Revlon’s and Gillette’s and Campbell Soup’s and RJR’s biggest customer
• is the nation’s biggest film developer and optician
• is the nation’s biggest private truck-fleet operator, energy consumer and real estate developer
• is the biggest seller of guns, diamonds, CDs, DVDs, apparel, dog food, detergent, jewelry, sporting goods, videogames, socks, bedding and toothpaste
• operates gas stations at 700 locations
• and sells more toys than Toys ‘R’ Us