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Rich Karlgaard, publisher of Forbes, was in the Journal with concerns about whether Wal-Mart’s February numbers might indicate the next recession.
• The expiration of the payroll-tax cut will continue to hurt. Wal-Mart’s customers aren’t thriving, and they will sorely miss that $80 lost per month. The average American family of four earns around $50,000 in annual income. The income of Wal-Mart households is thinner yet, with analysts typically pegging it around $45,000. Incomes in this range have stagnated and lost ground to inflation in 2011 and 2012.
• Food prices are rising faster than overall inflation. Inflation is the great hidden tax, especially when it hits essentials like food. Core inflation is running at about 2%, but the U.S. Department of Agriculture predicts that food prices will be up 3%-4% in 2013. This will nip at Wal-Mart customers and Wal-Mart itself, which now gets half of its U.S. revenue from groceries.
Will Wal-Mart eat the inflation and hurt its profit, or will it pass it onto its customers and risk driving them away? Food inflation presents no good choices.
• Gas prices are up 30 cents a gallon in 2013. History says that gas hikes always hurt Wal-Mart (and other big-box stores such as Lowe’s). Back in spring 2011, Wal-Mart’s sales slumped for several months as gas prices rose to nearly $4 a gallon. Here’s an obvious fact that isn’t always obvious to pundits who live in large cities: To get to nearly all of Wal-Mart’s more than 4,000 American stores, one must drive—usually several miles to the edge of town or outer suburb.
• Wal-Mart shoppers have a higher unemployment rate than the national average. An Advertising Age study from 2003 showed that only 23% of Wal-Mart shoppers had a four-year college degree. The degree-less are suffering in today’s economy. As of January, their unemployment rate was 8.1%, while the national average was 7.9%. Worse, the employment-to-population ratio among this group is only 54%, as compared with 62% in the general population.
Robert Samuelson writes on the true national debt.
How big is the national debt?
You’d think this would be an easy question. Surely we know how much the government owes. Unfortunately, it’s not that simple. The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning. The differences mostly reflect explicit and implicit “off-budget” federal loan guarantees. In another economic downturn, these could result in large losses that would be brought “on budget” and worsen already huge deficits. That’s the danger.
My purpose is not to scare or sensationalize. It’s simply to illuminate the problem. Broadly conceived, the national debt covers all debts for which the federal government assumes final responsibility. For politicians, the appeal of “off-budget” programs is that they allow the pleasure of spending without the pain of taxing. But they also create massive exposure for government.
Let’s see why. …
And Jennifer Rubin on our lack of fiscal leadership.
The president’s hysteria may have reached a point of diminishing returns. His parade of horribles is like his Hollywood friends’ movies — too many catastrophes, too much yelling and zero common sense.
House Majority Leader Eric Cantor (R-Va.) criticizes the president:
“The President continues to put forward a false choice on the sequester. Today, the President’s Homeland Security Secretary insisted we will have to cut vital homeland security functions if we don’t go along with another tax hike. This is clearly a false choice. There are smarter ways to cut Washington spending that will protect our national security and keep our economy growing. That is why I sponsored, and the House twice passed, legislation to replace the President’s harmful sequester cuts with smarter, more responsible savings. Many of these ideas were drawn from some of the President’s own proposals, which he now rejects unless they’re coupled with more tax hikes”
He is not alone in his frustration with a president egging on panic. The Post editorial board recognizes the nub of the problem: “From the start, and increasingly in his second term, Mr. Obama has presented entitlement reform as something he would do grudgingly, as a favor to the opposition, when he should be explaining to the American people — and to his party — why it is an urgent national need.” …
Joel Kotkin with population growth figures for economic regions.
Since 2000, the Intermountain West’s population has grown by 20%, the ThirdCoast’s by 14%, the long-depopulating Great Plains by over 14%, and the Southeast by 13%. Population in the rest of the U.S. has grown barely 7%. Last year, the largest net recipients of domestic migrants were Texas and Florida, which between them gained 150,000. The biggest losers? New York, New Jersey, Illinois and California.
As a result, the corridors are home to most of America’s fastest-growing big cities, including Charlotte, Raleigh, Atlanta, Houston, Dallas, Salt Lake City, Oklahoma City and Denver. Critically for the economic and political future, the growth corridor seems particularly appealing to young families with children.
Cities such as Raleigh, Charlotte, Austin, Dallas and Houston enjoy among the country’s fastest growth rates in the under-15 population. That demographic is on the wane in New York, Los Angeles, Chicago and San Francisco. Immigrants, too, flock to once-unfamiliar places like Nashville, Charlotte and Oklahoma City. Houston and Dallas already have more new immigrants per capita than Boston, Philadelphia, Seattle and Chicago.
Coastal-city boosters suggest that what they lose in numbers they make up for in “quality” migration. “The Feet are moving south and west while the Brains are moving toward coastal cities,” Derek Thompson wrote a few years ago in The Atlantic. Yet over the past decade, the number of people with bachelor’s degrees grew by a remarkable 50% in Austin and Charlotte and by over 30% in Tampa, Houston, Dallas and Atlanta—a far greater percentage growth rate than in San Francisco, Los Angeles, Chicago or New York.
Raleigh, Austin, Denver and Salt Lake City have all become high-tech hubs. Charlotte is now the country’s second-largest financial center. Houston isn’t only the world’s energy capital but also boasts the world’s largest medical center and, along with Dallas, has become a major corporate and global transportation hub.
The corridors’ growing success is a testament to the resiliency and adaptability of the American economy. It also challenges the established coastal states and cities to reconsider their current high-tax, high-regulation climates if they would like to join the growth party.
Peter Wehner has a good example of why The New Yorker magazine is not worth reading anymore.
In his piece about the Academy Awards, the New Yorker’s David Denby wrote this:
“I can’t give up my feeling that people are approving of their own tears when they respond to “Les Misérables.” After all, Michael Gerson, George Bush’s principal speechwriter, wrote an entire column in the Washington Post about how much he cried at “Les Mis.” But how much did the Bush Administration do for the downtrodden? I can’t think of a better definition of sentimentality—an emotion disconnected from what one actually is and does—than effusions like Gerson’s.”
This is a sneering ignorance. Even a liberal film critic should be familiar with President Bush’s 2003 announcement of the President’s Emergency Plan for AIDS Relief (PEPFAR), the largest program in history to fight a single disease. The plan included a massive increase in funding–$15 billion over five years–to promote prevention, treatment, and compassionate care, mainly in Africa. Many were skeptical that large-scale AIDS treatment was even possible in the developing world. But studies show that PEPFAR is estimated to have saved 1.2 million lives between 2003-2007. The most recent data show that the number of AIDS-related deaths in sub-Saharan Africa has fallen by about a third.
“The substantial life expectancy afforded by widespread access to cART [combination antiretroviral therapy] underscores the fact that HIV diagnosis and treatment in resource-limited settings should no longer be considered a death sentence,” according to Dr. Edward Mills, who helped oversee a large-scale analysis of life expectancy outcomes in Africa for HIV patients. “Instead, HIV-infected people should plan and prepare for a long and fulfilling life.”
“PEPFAR is changing the course of the AIDS epidemic,” according to Dr. Peter Piot, former executive director of the Joint United Nations Programm on HIV/AIDS (UNAIDS).
The President’s Emergency Plan for AIDS Relief was among George W. Bush’s finest hours–and for the record, Michael Gerson was one of the main advocates for PEPFAR in the Bush White House.
It takes a particularly confused and cynical individual to dismiss as “sentimentality” one of the most humane and effective enterprises in our lifetime. PEPFAR is certainly a more unambiguous success, and has saved many more lives, than the War on Poverty.
I can’t think of a better example of moral idiocy–of words disconnected from what reality actually is and what people have done–than columns like Denby’s.
He should stick to movie reviews.
Andrew Malcolm has late night humor.
Conan: The fifth Die Hard movie was No. 1 at the Box office last weekend. It features Bruce Willis trying to rescue people from a Carnival Cruise.
Letterman: The Academy Awards were on Sunday. ‘Les Miserables’ has so many nominations. It’s a musical about a Carnival Cruise.
Leno: Gas is so expensive even Lindsay Lohan can’t afford to drive anymore. She needs three friends to push her car into somebody else’s …