Wal-Mart Blames Poor Profits On "People Running Out Of Cash"

So Wal-Mart is blaming its disappointing profits on “customers running out of cash”. No surprise there, since stores like Wal-Mart are part of the problem. Yea, I know they have cheap stuff, but that’s because it’s all made in China. Socks, toys, electronics, underwear, all used to be manufactured here in the USA. Back then people earned a living wage and shopped at neighborhood stores. They bought many of the goods they and their neighbors made. They could afford to.

Ship those jobs overseas, and you do get bigger profit margins since the labor in countries like China work for pennies on the dollar. That allows you to sell the good a reduced prices and still make big profits. The problem is, eventually the lower income people who shop at those stores have no jobs and run out of money. Why does nobody in big business get this very simple supply and demand equation?

Even Henry Ford knew that if he didn’t pay his workers a living wage, they couldn’t buy the cars they were manufacturing. It was simple then and it’s simple now. The problem is we have a lot of Harvard MBAs running around preaching global economic theory and looking at the big picture without ever thinking about the market for the goods that global economy is producing.

America is headed toward Third World status if we don’t turn this thing around. We have a class of Super Rich (about 1%) and the rest of us who if we are not among the working poor already will be soon. Big business is shipping as much overseas as they can and sacrificing American jobs at the altar of profit. It’s time someone slowed this down. Otherwise, the run on the people running out of money will be all of us.