Ghosts of America Past

'The Ghost of America Past'

BY CHRIS PETHERICK

The holiday season is here, and for weeks now we have been hearing it is our patriotic duty to go out and spend, spend, spend in order to keep the country from falling into another great depression. You may be asking, how could anyone say with a straight face that squandering your hard-earned money is a way to show patriotism? Before you answer, take a trip back 20 years with the ghost of America past to see how it is we reached the point where our patriotism could be gauged by how much Americans spend at the mall.

Go back two decades, before the time of the North American Free Trade Agreement and the World Trade Organization, and before the days when massive international chain stores, like Home Depot, Lowes, Target and Wal-Mart, dotted the countryside. It was a time before globalization had changed the face of America from a country built on small businessmen, who worked hard, owned their businesses and produced what Americans purchased, to one that now teeters on outsourced industry, a small number of super-wealthy, stock-holding, absentee bosses and massive debt.

In a telling report on the state of the mega-retail economy, Stacy Mitchell, the author of Big-Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses, laid bare the new service economy, which lives and dies by the retail sale of junk brought in on massive container ships from Asia.

“We assume that the chains represent economic progress, but in fact they take far more out of our economy than they contribute,” wrote Ms. Mitchell. “As the chains have expanded, tens of thousands of independent retailers have lost their livelihoods and laid-off hundreds of thousands of employees. A study by David Neumark at UC-Irvine found that every new Wal-Mart store eliminates many more retail jobs than it creates.”

As for helping local economies by making cheap goods available to consumers, Ms. Mitchell points to a study by Maine’s Institute for Local Self-Reliance, which reports that small towns hemorrhage money when big-box stores set up shop there. The institute estimates that only 14 cents of every dollar spent at mega-stores remain in the local economy. On the other hand, more than half of the money spent at independent, locally owned stores remained in the state. That’s because local storeowners and workers do their banking at local banks, they hire local accountants, they buy locally and they generally pay higher wages.

Given this information, it should come as no surprise that, throughout the 1990s as these mega stores spread, U.S. manufacturing fell precipitously as a percentage of the country’s gross domestic product. Likewise, imported goods rose dramatically and exports declined. As a result, writes Ms. Mitchell, more than three million U.S. manufacturing jobs have been wiped out since the early 1990s, which she attributes in part to massive chain stores pressuring manufacturers to cut costs by outsourcing to foreign-owned companies, which make cheap products and pay slave wages.

To make matters worse, between 1980 and 2000, household debt tripled, with more and more Americans maxing out their credit cards and tapping into home equity loans to maintain their consumption-based lifestyles. So now, Americans are left with the horrifying realization that if no one buys the junk that these megastores peddle, they could close their doors and put tens of thousands of Americans out of work.

But, like Ebenezer Scrooge in Charles Dickens’s classic, A Christmas Carol, it’s not too late for Americans to repent for their greedy ways and embrace change in the spirit of Christmas. The ghost of America past has shown us true patriotism and what once made this country great: hard work, private ownership, individual responsibility, morality and economic thriftiness. Let’s hope that Americans get the message and do not need the ghost of America yet to come to reveal to us where this country is headed if they refuse to change. And God bless us, every one.

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