pageok
pageok
pageok
"Because We're the Good Guys, and They're the Bad Guys":

The New York Times tries to make a story out of nonstory: free-market groups that quite naturally defend the largest, most successful business in the U.S., Wal-Mart, from government regulation, get a tiny fraction of their funding from the Walton Family Foundation (not even from Wal-Mart itself). At least from what can be discerned from the article, none of this money is earmarked for Wal-Mart related research, and some of it is specifically earmarked for causes, like education reform, that have nothing to do with Wal-Mart.

The story does have a classic line. After spending almost the entire article raising suspicions of whether the free market groups are being unduly influenced by Walton family money, and discussing whether they should disclose the contributions in their publications, the article offhandedly mentions that labor unions give prodigious funding to anti-Wal-Mart organizations. Is this an "astroturf problem," as the article tries to avoid implying, or at least something that raises at least as many issues as the Walton Family Foundation funding the likes of AEI?

In response, Chris Kofinis, communications director for WakeUpWalmart.com, an arm of the United Food and Commercial Workers Union that gives money to liberal research groups, said: "While we openly support the mission of economic justice, Wal-Mart and the Waltons put on a smiley face, hide the truth, all while supporting right-wing causes who are paid to defend Wal-Mart's exploitative practices."

UPDATE: In the highly unlikely event the Walton family thinks it's buying the Heritage Foundation's allegiance to Wal-Mart for less than $5K a year, it's obviously mistaken. Gues the Times' reporter was too lazy to bother checking whether the think tanks he cites as being potentially subject to Wal-Mart's influence have been cheerleaders for Wal-Mart when the companies' policies conflict with the think tanks' free market ideology, which would be the real test of influence-buying.

FURTHER UPDATE: And here's AEI's (and one of my favorite blogs, Overlawyered.com's) Ted Frank criticizing Wal-Mart in yesterday's Washington Post, surely not something that could have conceivably escaped the Times's attention! Looks more and more like the Times published an anti-Wal-Mart press release as a "news" story.

Commenterlein (mail):
Nobody would interpret anything put out by the unions or an organization called WakeUpWalmart.com as anything other than advocacy, i.e., goal-driven propaganda. The AEI, on the other hand, keeps pretending that they are doing "research", and that their output deserves to be taken seriously. Well, it simply does not. And the quicker journalists would start ignoring anything produced by any of these groups, instead of using it for completely uninformative he said - she said stories, the better.
9.8.2006 12:03pm
DavidBernstein (mail):
You must have missed the part of the quote where the reporter notes that "Wake Up Wal-Mart" funds "liberal research groups, ones that assumedly are not called "Wake Up Wal-Mart."
9.8.2006 12:06pm
Kevin L. Connors (mail) (www):
This reminds me of Bill Clinton justifying the Jackass Party's illegal campaign financing by saying how important is was that they win.
9.8.2006 12:09pm
DavidBernstein (mail):
In fact, it's much more troubling for a "research organization" to take money from an organization specifically dedicated to unionizing Wal-Mart and then writing about Wal-Mart than for, say, AEI to take money from a family foundation, steps removed from the company itself, to write about education reform, and then also incidentally writing about Wal-Mart.
9.8.2006 12:09pm
Steve:
The fact that Prof. Bernstein sees a material distinction between Wal-Mart and the Walton Family Foundation suggests to me that he's overly straining to show that one side's conduct is outrageous and the other's is perfectly normal.
9.8.2006 12:32pm
Anon1ms (mail):
The title of this post seems to sum up Bernstein's analysis of any issue in which he takes a side.
9.8.2006 12:51pm
byomtov (mail):
AEI to take money from a family foundation, steps removed from the company itself, to write about education reform, and then also incidentally writing about Wal-Mart.

Incidentally?
9.8.2006 12:52pm
therut:
I wish some day that all business owners would strike. That would be fun to see. They could have a banner that says "We just took your job and shooved it".
9.8.2006 12:52pm
cirby (mail):
The UFCW is the same group that was paying non-union temp workers $6 an hour to protest at a Wal-Mart in Las Vegas.

In 100+ degree heat.

To protest a place that pays an average of over $10 an hour for people to work in air conditioning.
9.8.2006 12:58pm
Delurking (mail):
Something is fishy. The article says $2.5M over 6 years.
That would be about ~$400k/year. At one institution, that would fund less than 2 research staff members, which doesn't sound like it buys a lot of influence. Spread over a lot of institutions, it is even less. Some context in the article would be appropriate.

Furthermore, the article says "like the American Enterprise Institute, the Heritage Foundation and the Manhattan Institute".

Looking on MediaTransparency.org for how much was given by the Walton Family Foundation and for what between 1985 and 2005:

AEI:
2004: $27900 Charitable
2003: $80000 Charitable

Heritage:
2004 $5000 Charitable
2003 $5000 Charitable
2002 $5000 Education
2001 $5000 Education
2000 $5000 Charitable
1998 $5000 Charitable

Manhattan Institute
2004 $95000 Charitable
2003 $75000 Charitable
2002 $176000 Education
2000 $50000 Education


So, either MediaTransparency.org is simply missing
a lot of donations, or over the last 6 years,
the total going to those three organizations is:
$528,900. While the article did say "like" those
three organizations, it is misleading to quote
$2.5M when only $0.5M went to those three.
I think it is even more surprising that no money
went to those three organizations in 2005.
Why single them out in the article now?

Again, I am assuming accuracy on the part
of MediaTransparency.org, but tallying these
donations is their main mission.
9.8.2006 1:06pm
DavidBernstein (mail):
Therut: Maybe you should write a novel about it. You could call it "Atlas Shrugged." Might sell a few copies.

De, why now? Probably because Media Transparency fed the story now to a gullible (or sympathetic) reporter.
9.8.2006 1:20pm
noahpraetorius (mail):
Its really astonishing that liberals bash Wal-Mart but I guess its just another example of doing the bidding of unions. A young person with dedication and drive can go far in Wal-Mart without an MBA from Harvard or even a college degree. There are not many companies like that.
9.8.2006 1:38pm
te:

none of this money is earmarked for Wal-Mart related research,

Isn't it just such a wonderful, happy coincidence that the recipients just happen to churn out policy argument drivel that supports Wal-mart.
9.8.2006 1:45pm
cirby (mail):
Isn't it just such a wonderful, happy coincidence that the recipients just happen to churn out policy argument drivel that supports Wal-mart.


You don't give funding to people who are busy telling you that you're the Antichrist.

...and it's funny that the major complaints about these guys is their small connection to Wal-Mart, while there's a big lack of comment about methodology.
9.8.2006 1:51pm
te:

You don't give funding to people who are busy telling you that you're the Antichrist.

But don't you see Mr. Bernstein's point? None of the money is specifically earmarked so there is absolutely no reason to believe that any of those "think tanks" (more often holding pens for washed out academics and wanna be under secretaries of commerce) tailor their position papers to match what their funders want.

See, there is no "specific earmarks." Heck, for all they know they just might be funding people who say they are the Antichrist. That is the conceit of Mr. Bernstein's argument.
9.8.2006 1:54pm
Holly:
I think the cause and effect are being reversed. Wal-Mart is supporting a group that ALREADY produced pro-capitalist research.

I once went to "symposium" on Wal-Mart at UCLA that *shockingly* turned out to be one big pro-union rally with a few hapless economists invited as punching bags. I think I prefer the pro-Wal-Marts just because they don't hiss at you if you disagree with them.
9.8.2006 1:56pm
Brendan (mail):
Right - the amount was trivial. The amount given by the liberal organization seems like its greater. The actual work about Wal-Mart is not challenged as incorrect. A lot of the money seems targetted to education research/expenses. The money is coming from a charitable foundation, not Wal-Mart.

Yaaaawwwnnnn...

By the way I believe the post title was summing Kofini's comments, not the good professors point of view. It would be the equivalent of Walton Foundation "while we are fighting for the freedom of American's to dictate business with their own capital and improve their quality of life WakeUpWalmart.com is a nefarious organization trying to destroy American businesses and stagnate the economy - and in the end ruin the American way of life."
9.8.2006 2:01pm
Ross (mail):
John Walton was a huge supporter of school choice before he died, which is the most likely explanation for these donations. But its no surprise that think tanks that support letting you freely pick your school also support letting you freely pick where to work and shop.
9.8.2006 2:32pm
RBG (mail):
I thought the article was absurd when I read it as well. Shortly into the piece, the reporter notes off-handedly,

Companies and such groups have long courted one another — one seeking influence, the other donations — and liberal policy groups receive significant financing from unions and left-leaning organizations without disclosing their financing.

If this is the case--and I don't doubt it is--then what, other than manifest bias, is the motivation for this story as written. I could see the merit in a story that discussed the issue generally, but to write a story suggesting that Wal-Mart is engaged in scandalous behavior and that this is somehow uniquely horrible when it is apparently well known that this is common practice in the world of think tanks on both sides of the political aisle is simply disingenuous. Another reason I visit the Times' website only occasionally.
9.8.2006 2:42pm
Christopher Cooke (mail):

A young person with dedication and drive can go far in Wal-Mart without an MBA from Harvard or even a college degree. There are not many companies like that.



Yes, they can start out as a checker ---paid the minimum wage and encouraged by the company's HR department to apply for food stamps and state-sponsored health care for the poor--and finish their careers as a greeter (paid the minimum wage, on foodstamps and medicare).

Quite a career.

As for the article, I doubt that you have to bribe people at AEI, the Manhattan Institute, etc. to write pro-big business pro-corporation pieces, it comes naturally to them. So, I don't think this is the story of the century.

That said, I don't mind the NY Times pointing out these institute's authors' failure to disclose the donations they are receiving from the Walton Family Foundation. It never hurts to remind the public of the biases and ties of these groups with big businesses whose agendas they shamelessly cheerlead.
9.8.2006 2:48pm
RBG (mail):

Yes, they can start out as a checker ---paid the minimum wage and encouraged by the company's HR department to apply for food stamps and state-sponsored health care for the poor--and finish their careers as a greeter (paid the minimum wage, on foodstamps and medicare).

As opposed to PIRG or DNC staffers, who can slave away at or below the minimum wage, making up the difference with welfare payments, and then move on to a socially beneficial position in an artists commune or as a stilt-wearing activist making cameo appearances at anti-globalization or pro-Hizbollah rallies. Before, of course, finishing their careers as a washed-out (if unwashed), unreconstructed hippie-wannabe, continually nattering on about how they made the world a better place for free love and STDs.

Quite a career, that.
9.8.2006 2:55pm
Commenter:

Mr. Cooke, on what facts are you basing your opinion on?

I have done business with a number of Wal-Mart executives (e.g., those who probably pull in over $200,000 annually) who started out in low-level positions. $200,000 is a tidy sum, especially in Arkansas. Not every cashier becomes CEO, of course, but in my experience Wal-Mart seems to cultivate long-term careers better than most companies, and to reward employees fairly. Your remarks are just plain inaccurate, and you should give them some serious thought.
9.8.2006 3:08pm
cirby (mail):
Yes, they can start out as a checker ---paid the minimum wage


...and come out ahead of union picket "employees" who make less money per hour, have to stand out in 104 degree heat, and who won't have a job or any sort of advancement to look for once the union decides to stop paying for those pickets.

Not every job needs to be paid $15 an hour. Not every position is worth more than minimum wage. They're getting paid what the jobs are worth. If they're good at what they do, they get promoted. If they suck, they get to make a couple of hundred bucks a week and get to live in Mom's basement, or look for other employment.

If you're only smart enough and talented enough to be a checker at a big-box store (sliding bar codes over the scanner or occasionally calling in a price check), then you missed the boat a long time back in the employability race.

...and there's damned few people who are "only" that good.
9.8.2006 3:09pm
Leland:
It's funny watching the people bash Bernstein and WalMart. Read the article and do a little math. The whole thing is ridiculous. If you can't see how ridiculous the article is, then you are living a very insular life indeed.
9.8.2006 3:10pm
Commenter:
I'm not sure what it means to "fail to disclose" the tie. Most policy institutes put out annual reports in which their donors are identified and thanked. Anyone who's interested in AEI's or Heritage's donors probably doesn't have to do more than look in the annual report.
9.8.2006 3:13pm
Ted Frank (www):
The story is further misleading; I'm an AEI scholar, and just yesterday the Washington Post published an editorial I wrote that criticized Wal-Mart—and the New York Times reporter knew this when he wrote the story. Other evidence contradicting the thesis is similarly omitted. In short, it's an advocacy piece, rather than journalism.

I've written for AEI for fourteen months now. I have no knowledge of who the biggest donors are (or whether anyone in particular has earmarked money for my position), and noone has ever vetted anything I've written to ensure that it is consistent with a the position of a donor (or, indeed, the positions of other scholars, who I haven't hesitated to contradict when I've disagreed with them). And on matters like asbestos reform and patent reform where the business community has conflicting positions, it's quite likely that some of our donors disagree with other of our donors, though I have no idea whether that is actually the case. Moreover, the minute someone at AEI tells me that I can't write something because it conflicts with a donor's wishes is the minute I quit my job and double or triple my salary at a law firm, because if I'm going to write for clients rather than for academic research, I sure as heck want the market rate, which is why I find it ludicrously silly when people accuse me of being bought and paid for.
9.8.2006 4:50pm
Dilan Esper (mail) (www):
The New York Times' story missed the point. The real question is contained in Bernstein's assumption-- that free market groups would "quite naturally" defend the largest business in the US. This wasn't always true, because at one time, monopolies and monopsonies weren't considered to be products of a "free" market.

This is still true with respect to monopsonies in the labor market-- the defenders of free markets are virulently anti-union, even though a union can be defended just as a large corporation can as nothing more than an agglomeration of workers organizing together for common benefit.

The point is, at some point, free market advocates changed their definition of the free market so as to be broad enough to include markets where corporations-- but not where organized labor-- have the inordinate power as the sole or major buyer or seller of something.

Why did this happen? And why was it limited to corporations?
9.8.2006 5:31pm
DavidBernstein (mail):
I didn't say that free market organizations naturally support corporations, I said they naturally support a successful business against government regulation. And how is Wal-Mart a monopoly or monopsony? Not by any economic definition I'm aware of.
9.8.2006 5:35pm
triticale (mail) (www):
Any town where Wal-Mart can hire checkers for minimum wage is a town where the local economy is so depressed they wouldn't open a store. Around here they have to offer more than the $7.00 per hour which is starting pay for burger flippers (some of whom end up restaurant managers) in order to find qualified people.
9.8.2006 5:38pm
Ted Frank (www):
Wal-Mart pays more than minimum wage. In fact, they've lobbied to raise the minimum wage to drive out mom-and-pop competitors who can barely afford the minimum wage and pay less than Wal-Mart.
9.8.2006 6:28pm
Brian Garst (www):
I see quite a few commentators here are content to lash out at AEI and others who believe in free markets iwth no more signifacant evidence that they've received donations from groups that their work supports. Is it really surprising that organizations would give donations to groups they agree with? Is that somehow shady? Do commentators such as Commenterlein have anything other than ad hominems to offer, such as criticisms on the actual merits of AEI's arguments?

Some of you seem to have missed the point that Bernstein made quite clearly. Unless AEI is taking a position on Wal-mart inconsistent with its free market beliefs (which it is not), there is no reason to suspect undo influence.
9.8.2006 7:06pm
Luke 1152 (mail):

I'm an AEI scholar, and just yesterday the Washington Post published an editorial I wrote that criticized Wal-Mart

This was two sentences buried in the usual recycled propaganda about too many lawsuit, the out of control plaintiff's bar, etc.

And to claim that corporate shills over at the American Enterprise Institute are "scholars" is just a bit much, don't you think?
9.8.2006 7:15pm
BobDoyle (mail):
Brian, of course, we all know they see Bernstein's point, but they will never admit it because it would interfere with promoting their agenda, which in this case, is to attack successful examples of capitalism, especially when it is a company or industry that has managed to avoid the extortion of organized labor, the left's strong-arm division.
9.8.2006 7:18pm
Adam (mail):
Well, wait a second: regardless of whether the contributions create a conflict of interest, reflect a confluence of influence or just happen to be fortuitous, is there anyone who'd argue that such funding shouldn't be disclosed more rigorously than it is now?
9.8.2006 7:30pm
Luke 1152 (mail):

especially when it is a company or industry that has managed to avoid the extortion of organized labor, the left's strong-arm division.

I just love to see stuff like this. Especially when it is written by puffy guys sitting at a desk somewhere.

Why don't all of those companies just hire some pinkertons and go back to the good old days of cracking skulls of anyone who tries to unionize. I guess that is the theory.
9.8.2006 7:31pm
Dilan Esper (mail) (www):
Professor Bernstein:

Wal-Mart has monopsony power (i.e., its only competitors are too small to matter) in many markets. The latest example is its refusal to sell DVD's unless studios promise not to sell content at lower prices to Apple for use on i-pods. The studios have to go along, because Wal-Mart controls such a large percentage of DVD sales.

I am not saying that this means that automatically free market types should necessarily oppose Wal-Mart. But it does mean that-- if they are still concerned about monopoly and monopsony power-- they shouldn't "quite naturally defend the largest, most successful business in the U.S", which is what you actually said.

And I don't think you can deny that many economic libertarians express less concern about large concentrations of corporate power than was traditionally the case. Again, I ask, why is that?
9.8.2006 7:43pm
BobDoyle (mail):
Well, Luke, you managed to respond to my comment with ad hominem (not that there's anything wrong with that) while also avoiding, and thereby confirmming, my main point about the critics seeing Bernstein's point, but never admitting it, because it would undermine their agenda.
9.8.2006 7:50pm
Bottomfish (mail):
To Dilan Esper:

Without any malice aforethought, could you tell me just what the "large percentage" of DVD sales from Wal-Mart is, and where you obtained it? In a contest between Wal-Mart and Apple, why should I favor Apple, which with its overpriced iPod seems to be something of a monopolist itself?
9.8.2006 8:18pm
Perseus (mail):
None of the money is specifically earmarked so there is absolutely no reason to believe that any of those "think tanks" (more often holding pens for washed out academics and wanna be under secretaries of commerce) tailor their position papers to match what their funders want.

The only difference that I can discern between my fellow academics in political science and Washington think tanks is that many of the former suffer from the comical illusion that their research is untainted by the vulgar political bias that characterizes the latter.
9.9.2006 12:15am
Happy-lee (mail):
Walmart has been on the NYT hitlist for a long time now. Accordingly, one should give the same level of credence to any NYT article on Walmart as one would give to pre-1989 Pravda article on the USA.

As for "monopoly" problems, there is no official barrier to entry into retail, hence there cannot be a monopoly, unlike, say, the official barriers into opening medical schools or other such services that are in high demand and face an artificially restricted supply. (If walmart could enter the medical market my doctor friends would have to trade in their Hummers and multiple country club memberships for mere Honda's and one solitary club membership -- the HORROR.)

There is, however, a unofficial barrier to effective entry into the retail jumbo store market. This barrier arises from the various taxes, regulations, import controls, labor laws, environmental laws, zoning laws, etc, that make it very hard for a young man with ambition, brains and work ethic to challenge Walmart. The only competitors to Walmart all existed before it got big. They all have huge legal departments to fend off interference with the state. They all benefit from laws that FORBID small stores to pool resources. These entities, such as Target and KMart, offer plenty of competition, but, sadly, Walmart is faster and better.

I just bought a bunch of groceries at Walmart. And I am so happy it exists. Hurray for Walmart!! (For snobs out there: We buy our meat, fruits, wine and mineral water at WholeFoods, but that's cause we city critters have dem dar high falutin' tastes...)
9.9.2006 2:09am
DDR:
A general Democratic attack on Wal-Mart is on, supported by the NYT. They would add a lot of credibility to their campaign if they could get left-oriented columnist Paul Krugman to weigh in against Wal-Mart. Krugman is a professional economist, so his opinion would presumably be based on objective economic theory. He probably won't oblige them, though, because in modern economic theory, exploitation basically doesn't exist in the economy. The reason is that an exploited class of workers is an under-priced factor of production. A business that has access to such under-priced resources can make a lot of money. But to attract those workers, you have to raise their wages just a little, to seduce them away from their present employers. But when you've done that, you're still vulnerable to someone else doing the same thing to you. The final result is that the class of workers gets its wages bid up to their true value (what they contribute to the economy). This is a part of the so-called "Theory of Marginal Productivity".

In fact, Krugman has explicitly come out against the "Living Wage" movement. Krugman advocates "after-market" solutions to the problem of "redistributing" income. In other words, despite a lack "exploitation", some people can't hack the system, and to those the government is to make money payments. It's a simpler approach. It certainly has nothing to do with specific businesses such as Wal-Mart. The Democrats are probably making a major blunder in attacking Wal-Mart, a position that even leftist economists are going to have to repudiate.

So, you've got the left claiming "exploitation" and the right declaring its innocence. Then you've got the people who study economics as a profession declaring that they can't find any exploitation.
9.9.2006 3:46am
Ted Frank (www):
Wal-Mart has monopsony power (i.e., its only competitors are too small to matter) in many markets. The latest example is its refusal to sell DVD's unless studios promise not to sell content at lower prices to Apple for use on i-pods.

If every company that asked for and received a standard "most favored nations" clause is a monopsonist, the term loses all meaning. One finds it hard to believe that the movie studios are really powerless in negotiating with Wal-Mart and Apple; it's also difficult to believe that the movie studios object too greatly to being "forced" to explain to Apple that they can't provide a discount to a buyer sufficiently powerful that the Europeans seem to consider it a monopoly threat. Are these MFN clauses really a Wal-Mart monopsony problem or a problem of content-provider market power? If these MFN clauses are really Apple-targeted, the biggest effect I see is that Wal-Mart is effectively preventing Apple from using its market power to create barriers to entry to the market for middlemanning downloadable content.
9.11.2006 3:06am