Quick Hits on the Economy

Thought these things were interesting:

• Not a lot of people really get the benefits of free trade. They think it only leads to jobs going over seas and that it's only detrimental to our economic machine. It's not. This post at Carpe Diem helps illustrate this point. Really what it does is allow for a larger marketplace, which means more types of good, a greater supply of each of those goods which all helps to lower the equilibrium price between supply and demand.
  
• Jay Leno mentioned on his show the other night: According to the government, GM's Rick Wagoner was forced to resign because of poor performance. That’s embarrassing. You run an organization that loses billions of dollars and then get fired by a guy who heads up an organization that loses trillions of dollars.
• I liked this post also over at Carpe Diem. I was going to make the point that the post illustrates its own separate post, but I can't remember what else I was going to include, but the point I wanted to make was the power of a free press. When it acts as it should and expresses the voice of the people, and not just a particular segment of the people, it is such a powerful tool that helps protect the citizens from their government. What's pictured at right is a protest by one of the newspapers of Zimbabwe against the hyper-inflation that they're expressing because of government policies.
  
• Earlier this week some Israeli politicians were hailing Palestinian leaders as being better than their own, and some other writers used those comments to make the point about what an amazing political system has managed to become - a country so free that their own leaders can praise the actions of other people who are ultimately committed to their destruction. You'd hope that people would exercise better judgment, but that is the benefit of the country we live in. You can have any opinion you want, even if it's an idiotic one.
• And one last post from Carpe Diem talking about Walmart. One guy I know that travels a lot was excited because Southwest airlines finally started flying direct to Denver. He doesn't even use Southwest that often, but he talked about the "Southwest Effect," which happens whenever Southwest adds a particular destination, all competing prices for airfare automatically decrease by 10% or more just by virtue of the low-cost travel that Southwest provides. It is the same thing that Walmart allows for. Some interesting bits from the article:
  

  This week, Wal-Mart announced that it: Stepped up charitable giving globally from February 1, 2008 through January 31, 2009 with more than $423 million in cash and in-kind gifts, an $85.6 million increase over its global giving in the previous year. Last year, Wal-Mart and the Wal-Mart Foundation gave millions of dollars to numerous national and local charities including the Institute for Higher Education Policy ($4.1 million), YouthBuild ($5 million), Children’s Miracle Network ($4.7 million), The Salvation Army ($3 million), Special Olympics ($3.6 million), the National Urban League ($1 million) and the National Fish and Wildlife Foundation ($3.4 million).
  
  Wal-Mart offers the opportunity for a career: More than 75% of Wal-Mart's store managers started as hourly associates.
  
  In 2007, independent research from Global Insight shows that the reduction in the price level due to the presence of Wal-Mart translates directly into savings for consumers amounting to $287 billion in 2006. This corresponds to savings of $957 per person and $2,500 per household, regardless of where consumers choose to shop. That is, even consumers who shop at Target, Best Buy or Office Depot save money from the presence of Wal-Mart, due to the competitive pressure of Wal-Mart's "Everyday Low Prices."

People who hate Walmart or think its an evil company are morons. I read somewhere that Walmart only hires something like 1/20 applicants because so many people want to work there, and the average wait time to hear back from them is at least a month out from when the application is turned in. Crazy, right? Walmart is a good thing for the world. Deal with it, Dave.

• In this post, Larry Kudlow writes about the new era of government controlled business. In the post he says:
  

  Remember, as bad as Wagoner’s performance has been over the years, it was the federal government — not shareholders or the board of directors — that threw him under the bus. (By the way, GM’s board is being thrown under that same bus.) And I’m not arguing in favor of Wagoner or his board; they’ve made a zillion mistakes. But I am wondering if we’ve officially entered a new era of government-controlled business...
  
  Incidentally, most of the big bankers who met with President Obama in the White House last Friday want to pay back their TARP money, not take more of it. But the Treasury is conducting stress tests that could stop the TARP pay-downs and force the banks to take more taxpayer funds in return for even more federal control...
  
  As for Detroit, the carmakers should have been in bankruptcy months ago. And it is a bankruptcy court that should have fired GM’s Wagoner and his board. Along with some serious pain for bondholders, bankruptcy would have broken the high-cost labor contracts with the UAW as well as carmaker contracts with dealers across the country. That’s what bankruptcy courts are for. They’re part of the free-market capitalist system.

Just thought those were some interesting points.