Walmart- The High Cost of Low Prices

Not surprisingly, the contemplation of the film, Walmart-The High Cost of Low Prices, has brought to my mind images of a science fiction film. Bill Pullman, in his character of President Thomas J. Whitmore in Independence Day, is addressing the nation concerning the onslaught of Walmart upon unsuspecting small towns as their downtown areas lay in waste, with scenes of carnage, and then the eventual desertion of all living beings. He tells a troubled public, "They're like locusts, moving from planet to planet. After they've consumed every natural resource, they move on-and we're next!" The nation panics. The military is called out to defend a dying Main Street, along with enlisting top scientific minds to formulate a plan to bring down the invading alien forces of Walmart.

While the comparison of Walmart to an invading alien race, bent on the destruction of every small town in America may have a stinging ring of truth, there is another sad truth to the lure of super-low prices. Despite being sympathetic to the cost to laborers and small business owners, Walmart has become invaluable to both my daughter and I as our family faces tough economic times. Prior to my divorce, it wouldn't have occurred to me to shop anywhere else other than my local pharmacy in Summit to obtain my monthly medication. However, now that I lack prescription drug coverage as I'm no longer eligible to be on my ex's policy, I cannot pass up the chance to get my medication at a drastic discount from Walmart. The cost at the local pharmacy is nearly $30.00 per month as opposed to $10.00 for a 90-day supply. That's a savings of over $80.00 in a three month period. How can a small pharmacy compete with that? Although most of the residents of Summit aren't flocking to the nearest Walmart (several miles away) and I don't anticipate the upscale shops of the area succumbing to their clientele deserting them in favor of cheaply priced plastic trinkets, if the economy continues to stall, even the wealthiest will start to seek out bargains for everyday items (albeit incognito) to save money.

The same issue of needing to keep within a drastically reduced post-divorce budget applies to my daughter, who, while away at college, depends on the Walmart near to her school to make grocery and school supply shopping affordable. She's dismayed to support Walmart's questionable business and ethics practices, but, at this point, simply doesn't have the luxury of choosing to spend more money by patronizing local markets and shops.

What is the answer? Walmart offers nearly impossible to resist low prices, yet leaves destruction in their wake as the continue to be the dominant retailer on the planet. How can they be stopped? Or, at least, how can they be forced to treat their workers around the globe humanely by offering competitive wages, good health benefits, and far better working conditions for their overseas factory employees? I, for one, would be willing to pay a bit more, if necessary, to facilitate those changes, despite the subsequent pain to my wallet.

Independence Day. Dir. Roland Emmerich. Perf. Will Smith, Bill Pullman, Jeff Goldblum and Randy Quaid. Centropolis Entertainment. 1996. DVD.

Wal-Mart-The High Cost of Low Prices. Dir. Robert Greenwald. Perf. Lee Scott, Don Hunter, Jon Hunter, et. al. Brave New Films. 2005. DVD.

Dear Diary- How I Spent My Spring Break- PART II

WEDNESDAY-
It's official- my spring break has been declared the most boring, uneventful, spring break since the advent of spring breaks. Check CNN for details.

"Marty," with Ernest Borgnine and Betsy Blair is one of my favorite movies. The year it was released, 1955, it won four Oscars, including Best Picture and Best Screenplay. The main character, Marty, lived with his 50-something mother, who had a 56 year-old sister. His mother and her sister complained bitterly throughout the movie how once the children are grown, and your husband is gone (in their instance, they were widows), your life ceases to have meaning because no one really needs you anymore. I used to think they were so old-fashioned for such young (by today's standards) women and that feeling of despair would never apply to me. When I first fell in love with this picture, my life was a whirlwind of PTA meetings, shuttling the kids to and from activities and friend's houses, maintaining a home, taking care of the dog and other assorted pets, working part time, etc, etc, etc.

And now, the house is quiet, the children are grown, the husband is gone, and the dog is old. I feel as if I was at a carnival filled with music, food, laughter, and excitement. Then, suddenly, the carnival shut down, the music stopped, and I was left standing alone.....among the empty rides and the scattered debris. The only thing I hear is Marty's Aunt Catherine lamenting, "So, I'm an old garbage bag put in the street, huh?... These are the worst years, I tell you...I'm afraid to look in a mirror. I'm afraid I'm gonna see an old lady with white hair, just like the old ladies in the park with little bundles and black shawls, waiting for the coffin. I'm fifty-six years old. And what am I gonna do with myself? ...These are terrible years, Theresa, terrible years... Where's all the children playing in all the rooms? Where's the noise?"

Marty. Dir.Delbert Mann. Perf. Ernest Borgnine, Betsy Blair. Hecht-Lancaster
Productions. 1955. Film. 17 March 2010.

THURSDAY-
Samantha is going home today. I'll miss the little cuddle-bug, but Buddy is counting down the minutes.

FRIDAY-
Spent two hours with my Algebra teacher, Professor Pijuan, at the Elizabeth campus of UCC this evening. It was so nice of him to take the time to tutor me one on one and I realize now a lot of the mistakes I've been making were due to lack of understanding of basic algebraic operations. Hopefully, I won't be as lost after this session. Professor Pijuan even brought a traditional Filipino dessert for me to try. It's a solid custard that looks a bit like flan with coconut topping. Yum. If I ever get around to dinner tonight, I'll enjoy the dessert.

I have two appointments for potential buyers to see the house tomorrow after a week of not one request. One Realtor tells me that the clients she's bringing are ready to buy, really want Summit, and particularly liked my house from the online photos. Bah....they always say they're ready to buy. F%@#$!*g Realtors will say anything they think you want to hear. If I never see another Realtor or lawyer once all this is over, it will still be too soon.

SATURDAY-
First day of Spring and the weather is spectacular! Buddy had a fun morning....a little walk, a ride in the car, a biscuit from the bank teller, a peanut butter sandwich on whole wheat bread, and now a nice long nap. Lucky dog.

SUNDAY-
Last day of Spring Break and another beautiful day to enjoy. Have a few errands to run and will stop for a chai latte. What used to be a daily event has now decreased to just a few times a week as Starbucks prices continue to rise. There's no replicating a frothy cup of spicy chai at home (I've tried), but at nearly four bucks for a grande, and over three dollars for a tall, it's getting too expensive to go every day anymore. The worst offenders are the Starbucks along the New Jersey Turnpike. The last time I stopped at one on my way down to visit my daughter at college, they charged me over five dollars for a grande chai! Over five dollars for a cup of tea! Now I know where the term "Highway Robbery" comes from. I suppose that for my next trip, (which will be in a week) my caffeine fix for the long drive will have to be obtained at a local store before hitting the road.

That's all.

Dear Diary- How I Spent My Spring Break- PART I

SATURDAY-
Rain, rain go away........another Saturday...another day of visits from potential home buyers and their Realtors. Will this finally be the one that makes a viable bid? Or, am I once again running out of the house, Buddy in tow, in the pouring rain, for someone who is either looking out of their budget, or will complain about the lack of a garage? Today, they will probably just be put off by the smell of an old, wet dog. Maybe I'll put a "FREE" sign on the front lawn and just get it over with already.

It's now later in the day....rain is still relentless. Friends tell me via Facebook that their power is out and their basement is flooding. Crazy weather this winter. The Weather Channel blames it on El Nino, and it reminds me of the Chris Farley sketch from SNL where he is dressed in Mariachi-type garb and claims he is "EL NINO," and is all-powerful. Anyway...clocks get turned back tonight, and, so far, no scheduled showings tomorrow. Off to bed.

SUNDAY-
Dark clouds. Relentless rain. Thunder and lightening. Blah. It's mid-afternoon, and, so far, no requests for showings. It's a double-edged sword. While it's nice not to have to run out of the house with the dog in the rain, it's yet another weekend gone by without the hope of an offer as the court date looms nearer. (See The Buddy Diaries, Buddy Goes to Court for the complete update.) To paraphrase Rose in Titanic, "The inertia of my life is frightening." The Sword of Damocles hangs heavy over my head in the form of a seemingly unsellable house, while I'm unable to move forward with my life as I'm bogged down in a mire of mounting debt, lawyers, and an irate ex, whose anger toward me is actually starting to be alarming. The story of our stormy marriage was always the same, whatever went wrong was always my fault, regardless of the circumstance. All blame could be traced directly to me. As it turns out, divorce has not rendered this tried-and-true formula useless. The ex's re-marriage plans have gone south, and he and Boobs no longer live together. Who's to blame? Me, of course. It's my fault that the house hasn't sold yet, therefore upsetting Boobs because she wanted him to be more secure financially (of course, I heard this third-party), and next thing I know, I'm being dragged into court while support checks arrive crinkled and maimed....just to let me know how angry he is because I've once again ruined his life. Karma is really kicking my ass, and I'm not entirely sure why.

On a lighter note, I'm in the process of making plans to have a reunion with two of my best friends from my middle school days. We found each other on Facebook recently and it will be so nice to spend an evening with them to catch up on the last umpteen years!

Off to work on my Communications Lab project that's due tomorrow. The initial work has been done for days, but putting it together in the form of presentable paper has been the challenge because of my inability to concentrate lately.

MONDAY-
Guess who's coming to dinner? My daughter's unruly, one and a half year old, Rottweiler-Shepard Mix, that's who. Time to gird your lions.....and your feet. Samantha's idea of good time is to bite your feet while you're walking. The faster you walk, or more upset you get, the more her herding instinct kicks in. My son and his friends have made a game of it and don workboots or snowboots, stomp around, and let Samantha go wild. At least it tires her out a bit.

My daughter is in Boston for Spring Break, and her friends at college who were supposed to be dog- sitting Samantha can't handle her anymore, so she's being shipped off to my house until Thursday. Buddy will not be pleased. Samantha actually adores Buddy and wants nothing more than to just walk beside Buddy as he shuffles along, or lie next to him on the floor while he lounges on his comfy, orthopedic bed. But, the cranky old man will have none of it, and constantly growls and snaps at her. He's a terrible host to his house guest. Samantha is usually very dominant and aggressive with other dogs (true to her Rottweiler heritage), yet is very respectful and gentle with seniors. It's amazing how she understands that Buddy is not a threat to her and needs to be handled with care. My daughter muses that maybe dogs have "old people smell" and that brings out the respectful side of younger dogs. I tend to agree with her because sometimes Buddy smells like somebody's grandmother and it ain't pleasant!

TUESDAY-
Samantha kept me up most of the night. She slept for hours once she arrived and wanted to walk around all night. She's really a little cuddle-bug, even though her Rottie-Shepard Mix makes her look fierce, and she wants constant petting and reassurance. Going to try to go back to sleep and then work on more schoolwork today. Getting caught up will reduce some of the stress I've been under, except for Algebra....I don't know if there's any hope for me, but I don't have a choice and have to pass, or face taking it again.

Breaking the Bank- Dude, Where's My Bailout?

In the fall of 2008, it became apparent that the housing bubble had finally burst and financial investment giant, Lehman Brothers was poised to go under after heavily investing in bad mortgages. Then Federal Reserve Bank Chairman, Ben Bernanke and U.S. Treasury Secretary, Henry (Hank) Paulson gathered the CEO's of the nation's largest and most powerful banks one fateful weekend in September to attempt to stop other investment firms from toppling behind Lehman like dominos.

One of the strategies to emerge was for Ken Lewis, CEO of Bank of America (BOA) to buy out Merrill Lynch for 50 billion dollars. (Why do I get an image of Dr. Evil, pinky in mouth, as I write that?) Lewis would later claim that he was strong-armed into the purchase under threat of dismissal from his post at BOA. The following Monday morning, Lehman fell and BOA began proceedings to acquire Merrill Lynch. However, the hope that this merger would stop other institutions from falling was soon dashed once the news broke of Lehman's failure and Merrill's needed rescue. The markets began to plunge, credit markets froze, and banks stopped lending, effectively putting the economy at a standstill.

Henry Paulson then presented to Congress that if the government didn't bail out failing banks and investment houses, the economy would plunge to the level of The Great Depression. And, T.A.R.P. was born. In October, 2008, President Bush passed the T.A.R.P. bill, despite taxpayer protests (big surprise). This bill would grant $700 billion in bailout money in exchange for ownership stake in the banks. Some banks protested, but Ken Lewis wanted to accept the proposal, as he was poised to get a double influx of funds for both BOA and Merrill Lynch. According to Breaking the Bank, the US nationalized the banks that day and Henry Paulson was now the puppet master.

Meanwhile, the marriage of BOA and Merrill Lynch was an unhappy one from the start and the mega-bonuses that Merrill Lynch employees expected quickly became an issue with Ken Lewis. Taxpayer-funded bailout money that was used to supply these bonuses drew loud and fierce opposition from the taxpayers, who were facing their own financial crisis due to the downturn. "Where's my bailout?," became a mantra of the common man.

In December 2008, Merrill Lynch's 4th quarter losses were devastating. Merrill held too many toxic assets. However, Ken Lewis did not tell the stockholders of these losses until the merger of BOA and Merrill was approved. Lewis would also later claim that he was unaware of the massive losses until it was too late to stop the merger, and even tried to invoke M.A.C. (material adverse change clause) to halt the process. This move by Lewis has been called the Lewis Ostrich Defense. When Lewis balked after learning of Merrill's heavy losses, Ben Bernanke and Henry Paulson claimed that cessation of the merger would surely collapse the banking system, and, according to Lewis, forced him to move forward.

Paulson offered Lewis an additional $20 billion to cover the losses (And we don't have money for education or to rebuild New Orleans because........?), but they both kept that offer secret for weeks. (And most Americans don't trust government or big business because.......?) When the news broke in January 2009 of Merrill Lynch's $15 billion dollar losses, the already wounded stock market began to tank. Ken Lewis placed the blame squarely on the shoulders of John Thain, then CEO of Merrill Lynch, citing mega-bonuses and irresponsible spending. Lewis was desperate to deflect the heat away from himself and threw Thain right under the speeding bus of the economy's downfall. (Insert image of political cartoon here.) Thain was fired, but Lewis' troubles were just beginning.

The new boss, President Barack Obama, was displeased with the former regime's handling of the banking crisis (there's a surprise) and not only demanded a change in way banks do business, but called for an accounting of how the bailout money was allotted.

On February 2, 2009, Lewis and other bank CEO's were grilled before Congress and held accountable for the billions of dollars handed to them. Ken Lewis was defiant throughout the proceedings, but eventually was stripped of his chairmanship by BOA and has since claimed that he regretted ever taking T.A.R.P. funds.

The long saga draws on, foreclosures are still high, and taxpayers, who suffered the greatest in this debacle are still crying out, "Dude, where's my bailout?"

Breaking the Bank- Understanding Terms

The Troubled Asset Relief Program. (T.A.R.P.):
On October 3, 2008, President Bush signed T.A.R.P. into law. This bill provided $700 billion dollars in bailout money to the top banks in the nation, as they were poised to fail due to risky investments in bad mortgages brought on by the bursting of the housing bubble.

The Housing Bubble:
Housing prices saw tremendous growth starting in 2000, and peaking around mid 2005. Houses that were worth, say, $200,000 in 1999, were now valued at as much as $450,000 by 2005. Many homeowners were using the equity in their homes as a bank, taking out huge second mortgages to finance everything from the college education of their children to major renovations and additions to their homes. The banks were happy to oblige the homeowners by allowing them to refinance their homes for up to 100% (or even higher) of their home's perceived value. Mortgages were readily available for buyers and "20% down, no doc" mortgages were popular (a buyer only had to put down 20% of the asking price and the banks didn't even trouble to see if the perspective buyer was employed). Not all finance gurus were in on the party and some warned of the housing bubble bursting. When it finally burst, it almost took the whole financial system in America down with it. Now millions of homeowners owed more on their homes than their houses were worth as home values plummeted. Mortgages began to default and the financial crisis began that was addressed in "Breaking the Bank."

Toxic Assets:
Assets without a buyer, so they hold little to no value. (If Dave Barry were writing this blog, he would say The Toxic Assets would be a good name for a rock band.) Defaulted loans are often cited as toxic assets, leading to the housing bubble burst and the subsequent financial crisis, followed by the Big Bailout. Many homeowners who were now in danger of losing their homes to foreclosure wanted to know, "Where's my bailout?" The banks were delivered from their toxic assets with money from T.A.R.P., while the taxpayers were allowed to drown in their own sea of debt.