How Are We Still Having This Conversation?

 

Speaking of children working in inhumane conditions, how much did he pay the 5-year-old who created that sign?

 

Sometimes, avoiding the first-person voice on this blog is impractical. But we try, and will continue to. Here’s a recent conversation with a Lexus-driving business owner who lives in one of the ritziest gated communities in town, if not the ritziest:

Him: You shop at Walmart? (harrumph)

Yes, he harrumphed. An onomatopoeic expression that sums up his indignation with our choice of grocery purveyor far more effectively than any words could. Our relationship will never be the same.

It doesn’t matter what the low-cost provider is. Could be WinCo, Food4Less, or whichever discounter in your town sells in bulk and doesn’t waste money on décor. But Walmart gets most of the notoriety, and will serve as our example. It’s notorious because it isn’t unionized, and was founded in a part of the country that some people equate with a punchline. Boiled down to their essence, the reasons most commonly given for not buying groceries at Walmart (and passing judgment on those who do) are:

  1. The people who shop there are comically unfashionable, which should make it obvious to you that the food itself is awful.
  2. The company exploits workers, somehow.
  3. It runs mom-and-pop stores out of business.

 

Grocery shopping is not a social statement, or at least it shouldn’t be. It’s simply something you do to avoid starvation.

Given that Walmart has the most employees of any corporation in the United States, and doesn’t keep any of them shackled, is there any chance that maybe the employees don’t feel they’re being exploited?

You could argue that they’re too dumb to know it, as many a wag does. At that point it becomes less about the principals and more about the observer.

Day-to-day buying and selling of goods and services in a relatively free economy like the United States’ is a series of voluntary exchanges. Ideally, the cheapest provider not only ought to win (in a logical sense), but should win (in a moral sense). You take possession of whatever it is you wanted regardless of whom you buy from, but when patronizing the lowest bidder you end up with more money in your pocket. You’d think this is so obvious that it doesn’t warrant mentioning, but it does. Again and again and again. In the same respect, when selling something – and what most of us sell is ourselves, on a regular schedule 5 days a week – we’re looking for the opposite and will only do business with the highest bidder.

When buying anything, and we used groceries because they’re as much of a necessity as anything, you’re welcome to pay a premium for proximity, for perceived quality, or even for guilt. But the sensible thing to do is to buy as cheaply as possible. When operating as a seller (see above), you’re again welcome to offer a discount. But you’d need a compelling reason to. Two jobs with the same requirements, equidistant from your home, but you’d choose the one that pays less? Maybe if your ex-spouse sits by the door at the better-paying one, but it’s hard to think of many other reasons why you’d refuse an opportunity to make more money with no incremental effort.

Back to the buying side. Clearly, the Cheerios and celery at Safeway are of much higher quality than those sold by the Bentonville Bruiser. And the canard about running family businesses out of operation doesn’t stand up to any kind of scrutiny. How Kroger, SuperValu, and the Delhaize Group stores (Food Lion, et al.), each multibillion-dollar concerns, managed to avoid that same accusation is a mystery. The “mom-and-pop” grocery store is, to almost all of us, laughably inapplicable and obsolete. Family-owned food merchants are as much a part of 2012’s landscape as dry goods stores and blacksmiths are.

There are trillions of ways to waste money, and future generations will find further ways that we could never conceive of. But with respect to gambling, smoking, drinking, taking out permanent life insurance, and incurring credit card debt, it’d seem that paying extra just for the sake of paying extra would be an easy one to omit. For many, it isn’t.

Speaking out of self-interest, we can make an argument that that’s good: when other people are willingly spending more than they need to, it makes it easier for the rest of us to make offers on assets. After all, there are now fewer viable bidders in the marketplace. On the other hand, a society full of financial dimwits is a weak one. There are two major reasons why China went from economic wasteland to powerhouse in barely a generation. One is a government policy of economic liberalization, the other is a cultural propensity to bargain and save. (Cf. Mark Steyn, “Culture trumps economics.” When you’ve got both on your side, seismic shifts occur.) Westerners who do dumb things with their money indirectly hurt all of us, their cumulative effects making our society that much weaker.

Maybe the economic truths that we hold to be self-evident, aren’t. Buying an item at Store X when Store Y sells it more cheaply means putting your own financial interest in a position of relative unimportance. Caring about the plight of the non-unionized Walmart employee is a job for…the non-unionized Walmart employee. Respect that, and we won’t tell you to eat your vegetables and straighten your tie.

This article is featured in:

**The Totally Money Blog Carnival #62-Easter Edition**

Carnival of Wealth, Overrated Product Edition

We played with these side-by-side at Best Buy and couldn't tell them apart

 

An extra $100 for quadruple the pixels? Maybe, but we seem to have reached the point of diminishing returns with regard to display resolution. You need to be a great horned owl to appreciate the difference.

This week’s edition of the Carnival of Wealth, like all its predecessors, showcases the least average personal finance blog posts from around the world. If you fancy yourself worthy of submission, click here. Keep it on topic, of a decent length, and correctly spelled and punctuated. Send us dross and we reserve the right to mock it. Which we will. The safe thing to do is just read. So let’s do exactly that:

You see what we were talking about 4 sentences ago? Here’s an example. “Francine Ersery” at 2009Taxes.org has some tips for us on how to avoid getting audited. Given the timely title of her site, we should point out that in only 4 years the IRS can’t go after you for your 2009 taxes anyway. Also, Ms. Ersery claims to be “an accountant in the windy city”. (Uncapitalized, so it could be any city that has wind.)  It took 2 seconds to Google Ms. Ersery and find out that she’s also “a full-time writer and blogger with a passion for the web world and technology” and “a college student who enjoys spending Spring break in Florida.”

Look, we understand that honestly is optional online. But if you’re going to create multiple identities under which to write your unreadable link bait, can you at least come up with a different name for each one? Then once you’ve done that, don’t make your pseudonyms so generic that it’s obvious you’re lying (“Jane Smith”), but also don’t make them so particular that we can expose you for the fraud you are. Try something in the middle, like “Betty Kincaid”.

Laura Edgar at Nerd Wallet is the antithesis of this. She gives us practical and useful advice, this week for Wells Fargo customers who don’t fancy having to pay fees for the privilege of letting the bank use their money. Depending on what state you live in, Laura recommends you bail out and try one of the other banks and credit unions she lists.

Did you know the filth-ridden layabouts of the Occupy Wall Street movement have something resembling a formed opinion on credit scoring? We didn’t say a “well-“formed opinion, just a formed opinion. Private enterprise being the devil incarnate, the Occupy Wall Street Alternative Banking Group wants credit scoring taken out of the hands of Experian, Equifax and TransUnion and placed in the hands of a body that never spends money unnecessarily, never treats people unfairly, and is renowned for its fast and efficient service – the federal government. Odysseas Papadimitriou at Wallet Blog has a better idea, one that turns credit scoring from a closed oligopoly into something closer to fair.

Liana Arnold at CardHub lists the best credit cards for every life stage. She’s largely in step with what we’ve been arguing for years – rewards are more important than interest rates. In fact, nothing is less important than the latter.

Madison Du Paix at My Dollar Plan reviews a $50 book by Jim C. Otar, Unveiling the Retirement Myth. You’ll be paying for content, because Mr. C. Otar clearly doesn’t spend much money on cover design. (By the way, The Greatest Personal Finance Book Ever Written still sells for $7.)

Barbara Friedberg tells a wonderful Schaudenfraude story about a timeshare developer who got overextended and ended up on the hook for 9, maybe 10 digits. See, they’re a bad investment for everyone! That’s not the crux of Barb’s post, just a delightful aside. She wants to know why people can have large incomes yet little wealth.

Dividend Growth Investor lists this year’s additions to the list of Dividend Achievers – stocks that trade on one of the 3 biggest American exchanges, have increased dividends each year for the past decade, and have an average daily cash volume of at least half a million dollars. We love his utter refusal to edit:

NIKE, Inc. (NKE), together with its subsidiaries, engages in the design, development, marketing, and sale of footwear, apparel, equipment, and accessory products for men, women, and children worldwide.

Thanks.

Roger the Amateur Financier reviews 1996’s The Millionaire Next Door.

Canada lets you hold your mortgage in your retirement savings plan? From the land of stubby beer bottles and ketchup-flavored potato chips come Boomer & Echo, who also give you the fine print. You need to hold sufficient cash or liquid assets, and direct the savings plan yourself.

What are better- actively managed mutual funds or index funds? Free Money Finance preaches the benefits of the one over the other.

No wait. Exchange-traded funds are what you want. That’s according to Teacher Man at My University Money, who wrote (and is giving away) an e-book about that very topic.

“Carrie Smith” (boy, there are a lot of people named “Smith” who write articles) at Ready For Zero lists ways to save on rent, if you’re the kind of person who doesn’t like owning a home. Her suggestions are…original, that’s for sure. Yes, becoming the building supervisor will almost certainly knock a few bucks off your rent. As will paying 6 months’ advance rent. If you’ve already got that money, why you’d put it towards rent instead of a down payment on a house is anyone’s guess.

In our “faced deadline and pulled 800 words out of his” category, Tim from Faith & Finance lists 5 business lessons he learned from playing Monopoly®. Except his comparison makes no cents.

Get it? “Cents”? A homonym for “sense”, which Tim couldn’t resist using. Here’s lesson #2:

2. No Such Thing as Free Parking

Landing on Free Parking can be nice, especially if everyone contributes to the pot every round.  But guess what…there’s no free parking in life.

First, doesn’t Monopoly teach the exact opposite? “There’s no free parking in life” sounds like a lesson you’d learn playing chess or mumblety-peg, rather than the one game that actually has a feature called “Free Parking”. Second, there’s plenty of free parking in life, both literal and figurative. Third, that thing about anteing up and someone collecting when they land on Monopoly’s Free Parking space isn’t in the rules. It’s just a stupid convention.

But no, his post was awesome. If you don’t believe that, just read the comments.

Ben Bernanke says inflation is at 3.1%, which is about average. Darwin’s Money says inflation is at 8%, which is awful. Who are you going to believe? We’ll take the guy who doesn’t have a professional history of lying and dodging questions.

Brief, but intense. Like a heroin high. Join us tomorrow for another Anti-Tip of the Day, Wednesday for another post, Monday for another CoW. Adios.