Quote of the Day:
Mr. Obama spent much of his State of the Union address insisting that the U.S. is not a failing state. He’s right: Anyone would rather have our problems than Europe’s or Japan’s or China’s. Looking at our political leadership, though, you wouldn’t say we’ve done much lately to earn our luck.
–Holman Jenkins in today's Wall Street Journal
Patrice addressed the economic conditions behind those announced Walmart closures yesterday, and today Holman Jenkins of the Wall Street Journal takes up the subject.
Jenkins specifically takes up the matter of Walmart's having decided not to build two stores in poorer Washington, D.C. neighborhoods. The city had allowed Walmart (Jenkins calls attention to the verb "allowed") to open three outlets in more affluent neighborhoods in exchange for promising stores in two poorer neighborhoods.
Facing additional headwinds were the long-planned D.C. stores, and not just due to the regulatory hurdles and lobbying fees the company endured before being permitted to enter the market. Since then, a ballot measure seeks to boost the local minimum wage to $15 from $11.50, and the city has proposed legislation to mandate minimum hours for part-time workers and impose new family- and medical-leave requirements.
So Wal-Mart told city officials that the stores couldn’t be profitable and it was nixing them.
To the politicians who serve as gatekeepers to opportunity, which first requires erecting obstacles to opportunity, the company has become unfit for citizenship in their republic of rent-seeking. “I’m blood mad,” Mayor Muriel E. Bowser told a news conference. “This is devastating and disrespectful to the residents of the East End of the District of Columbia,” former Mayor Vincent Gray told the Washington Post.
The proverbial Martian would wonder why politicians are surprised by a shortage of jobs for their constituents, when they continually promote policies that drive jobs away.
President Obama has lately taken up the call against state and local occupational licensing, a job-killing protection for vested interests. Yet his administration is being sued for blocking the Keystone XL pipeline, which would have created high-paying construction and refining jobs.
In theory his administration recognizes the need for tax reform to correct the huge disincentive to U.S. companies to bring home their foreign earnings, which can then be reinvested. Yet most of his administration’s daily activities increase the determination of U.S. companies to move their headquarters offshore in search of tax codes more congenial to investment, employment and growth.
Over the weekend, a professional money manager—i.e., paid by clients to decide where their money will be invested and create jobs—told Barron’s: “We can’t change demographics. We should restructure debt, reduce regulation, and pursue sounder policies. But none of these issues is being discussed or addressed. That’s why secular stagnation will linger.”
Jenkins argues that it does no good to explain this to politicians. Why? Because they already know it and adopt job-killing policies anyway. Politicians have good job stability. They get it by promising these job-killing policies that sound good but aren't.
Interestingly, Jenkins does not think real estate mogul Donald Trump gets the nature of our economic problems. Trump talks about China and Mexico as competitors but the real issue is not other countries but our own domestic policies that cause economic stagnation.
Finding Ted Cruz off-putting, Jenkins nevertheless praises Cruz's apology for his famous New York values jab at Trump. In apologizing, Cruz gave a brilliant explanation of the policies that have made so much of the Empire State an "economic wasteland" compared to next door neighbor Pennsylvania.