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Corporate Campaigns: Wal-Mart

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The Battle Against Wal-Mart:

Bankers Box Store?:

In "Piggy Banker" (2/12/06) the Washington Post reports that Wal-Mart is poised to use a legal loophole to enter banking "and potentially do in that arena what it has done to nearly every other consumer product and service it has touched."

"What's really at issue is the nature of the American economy," says Rep. Jim Leach (R-Iowa), who has fought efforts by industry to lift the ban for over two decades. "If such concentrations are allowed, you could have our largest banks combined with our largest retail companies and high-tech companies and create questions about how credit is allocated. It has enormous consequences for competition, and I think America would become less competitive in the world."

In one of his final actions, Federal Reserve Chair Alan Greenspan warned Congress that industrial loan corporations (ILCs) should be placed under supervisory requirements of the Banking Holding Act, as required by The Financial Safety and Equity Act of 2005 (H.R. 3882). The bill was introduced after a GAO report on ILCs called for Congress to revamp the regulatory oversight of ILCs. (See Leach's summary of the GAO's findings, as well as a related CRS report.)

Congress debated whether or not to allow commerce and banking to merge before passing the financial modernization act that bears Leach's name -- Gramm-Leach-Bliley. The bill stipulated that there be no merging of commerce and banking. (See Leach's letter to Alan Greenspan, 1/20/06)

For further information see Jonathan Brown, "The Separation of Banking and Commerce," Essential Information (1991).

Link to hearings held by House Financial Services Committee, July 12, 2006.

Wal-Mart's proposal is another example of the total failure of antitrust policies to prevent the formation of new conglomerates. The blind ideological drive towards corporate deregulation has freed some companies from traditional regulatory restraints that limited them to particular industrial sectors.

High-profile examples of the emergence of new corporate conglomerates have affected media ownership (GE/NBC, Westinghouse/CBS and Disney/ABC), tobacco accountability (Altria/Philip Morris) and other issues.

Aggressive deregulation of key sectors has also been fueled by deal-fee-driven mergers and acquisitions that later turn out to be inefficient (and often have to be unwound), or turn out to have destructive consequences for markets, investors and, for consumers, the consistent delivery of essential services.

Enron is a good example of what can happen. After gaining certain exemptions from the Public Utilities Holding Company Act from the SEC, Enron entered into new sectors outside its core areas of competence, including broadband services and water, where the company took a bath. The company's failure in these new areas was a significant trigger-point along the way to the company's collapse. Once returns from these new business divisions were not what they had been projected, top company executives began to "cook the books" to please Wall Street, especially by setting up "special purpose entities" to hide the company's increasing debt off-shore. Deregulation was key to allowing Enron to wander outside its core line of business (energy), as explained in this report by Public Citizen.

It is time to put strong structural restraints on cross-sector ties.

One way to do this is to restore the sector-specific provisions established under PUHCA and other New Deal-era statutes, including the Glass-Steagall Banking Act. Another approach would be to place direct limits on corporations through either federal or state charters.

Further information:
"Freeing Markets from Corporate Control," chapter 4 of The People's Business.
Taming the Giant Corporation (explores the history, pluses and minuses of federal chartering) by Mark Green, Joel Seligman and Ralph Nader
The Bigness Complex by Walter Adams and James Brock
"The Price of Consolidation," by James Brock, Multinational Monitor (Jul./Aug-2005).


Last Year Wal-Mart started a food fight with egg on its face. CEO Lee Scott said British authorities should investigate Tesco, whose share of the UK food market increased to a record 30.5% over the past three months. But what about here in the U.S., where Wal-Mart controls 24% of the American grocery market, more than double its next closest competitor and more than the next three competitors combined? Read more.

A new analysis reveals that "Mr. Sam" paid CEO Lee Scott 871 times what it pays an average Wal-Mart "associate" in 2004. For more on what can be done about CEO greed, go HERE.

Did Wal-Mart Union-Busters Use Bribes to Infiltrate a Union?

When former Wal-Mart Vice Chairman Tom Coughin was forced to resign and his benefits were frozen after unexplained personal expenses were revealed, he claimed that the money was spent to benefit the company -- i.e. to bribe union activists as part of anti-union activities. The United Food and Commercial Workers union has responded by calling upon Wal-Mart to release related documents. On April 15, the Union filed a complaint against the company.

Wal-Mart Links and Resources:

Wal-Mart Watch is the new campaign to put the company's policies at the center of a national debate.

Organizations:
American Independent Business Alliance
American Rights at Work
Good Jobs First
International Labor Rights Fund
New Rules Project's Retail/Big Box Store Page
National Labor Committee
National Organization of Women
Oligopoly Watch Wal-Mart Page
Reclaim Democracy's Wal-Mart Page
Sprawl-Busters
United Food and Commercial Workers (UFCW)
Wake-Up Wal-Mart
Wal-Mart versus Women

News and Media Reports on Wal-Mart:
Against the Wal has a huge cache of Wal-Mart stories.
Welcome to Wal-World by Andy Rowell, Multinational Monitor (10/03)
Frontline Special: "Is Wal-Mart Good For America?"
"Store Wars" Independently-produced PBS special
Wal-Mart's Use of Undocumented Workers (CNN story, 10/23/03)
Interview w/Al Norman of Sprawl-Busters, Multinational Monitor, 1/04
Wal-Mart Ratchets up Political Contributions (USA Today, 2/04)
Lawsuits a Volume Business at Wal-Mart (USA Today, 8/13/01)
The Wal-Mart Manifesto by Tim Noah (Slate, 2/24/05) deconstructs the Wal-Mart mythology.
Wal-Mart's Sweetheart Deal by Jonathan Tasini, TomPaine.com (2/05)
Wal-Mart and the Economic Destruction of Black Communities by Margaret Kimberly
Wal-Mart, a Nation Unto Itself by Steve Greenhouse (NYTimes, 4/17/04)
Nathan Newman labor blog
Wal-Mart's Culture of Crime and Greed by Jonathan Tashini (TomPaine.com)
New Maryland Law Targets Wal-Mart for Healthcare Costs (WashPost, 4/10/05)

Reports on Wal-Mart:
"The Hidden Cost of Wal-Mart Jobs" by U. of Cal. Center for Labor Research and Education (8/2/04)
U.S. House Committee on Education and Workforce (Dems)
"The Hidden Price We All Pay for Wal-Mart" report by staff of Rep. George Miller (D-CA), 2/04
"Shopping for Subsidies" report by Good Jobs First documents $1 billion in local/state subsidies for Wal-Mart.
"Labor Market Effects of Wal-Mart Expansion" U. of Missouri Study, 1/04
"Selling a Cheaper Mousetrap: Wal-Mart's Effect on Retail Prices" by Prof. Basker, U. of Missouri (3/05)
Report on Impacts of Mega-Retail Chains, by Prof. Ed Shils of Wharton School of Business, 2/97.
"Impact of The Wal-Mart Phenomenon on Rural Communities," by Prof. Ken Stone, Iowa State U. (1997)
"Impact of Wal-Mart Supercenters on Existing Businesses in Mississippi" by Prof. Ken Stone (SETA)
Wal-Mart: Template for 21st Century Capitalism? (password required - conference proceedings, 2/04)

Books:
How Wal-Mart is Destroying America And What You Can Do About It by Bill Quinn (Ten Speed Press)
The Case Against Wal-Mart, by Al Norman (Sprawl-Busters)
The Hometown Advantage by Stacy Mitchell
Selling Women Short by Liza Featherstone
"Wal-Mart: Rise of the Goliath" by Liza Featherstone, Multinational Monitor, 1/05
Featherstone: a review by Stephanie Luce (Monthly Review, 4/05)
How Superstore Sprawl Can Harm Communities National Trust for Historic Preservation
In Sam We Trust by Bob Ortega (1998)
Nickel and Dimed by Barbara Ehrenreich
"Inside the Leviathan" by Simon Head (review of related books, NY Rev. of Books, 12/04).

Movies and Videos:
Wal-Mart: The High Cost of Low Price by Robert Greenwald
Justice Vision recorded the 2005 UCLA Conference on Wal-Martization (order online)
Frontline: "Is Wal-Mart Good for America" (watch online or order video)

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