Falling Sears

[courtesy Google Images]

Four years ago, about Christmas, I stopped in at a Sears store at Dallas.  I was shocked.  The carpets were dirty.  The shelves were only partly stocked and what was there was mostly junk. There were only a few employees, but almost no customers.  The store was grubby.  It was clearly a corporation headed for bankruptcy.

Today, I read an article in DealBook entitled “For Once-Mighty Sears, Pictures of Decay”.  The article chronicled the author’s visits to several Sears stores–all of which were as shabby as the Dallas store I’d seen four years ago:

When Brian Sozzi, the chief executive of Belus Capital Advisors, visited Sears locations in New York and New Jersey this month, he said, he found barren shelves, haphazard displays and badly stained carpets.

Also missing: customers.

“It’s just badness throughout,” Mr. Sozzi said in an interview. “Every store has something fundamentally wrong with it.”

What’s wrong with Sears?  Why has this one-time corporate giant fallen on bad times?

Gross mismanagement by the Sears corporate officers?  Probably.

But I suspect that to understand the fall of Sears we might compare and contrast that business to another similar business that has thrived:  Walmart.

Why did Walmart thrive?  Because it sold products manufactured in China and imported into the United States.

Why did Sears fail?  Because it sold products primarily manufactured in the USA.

Viewed in that light, the fall of Sears is a troubling sign of what’s happened to America:  we’ve lost much of our capacity to build our own products and we’ve sent profits that should’ve been kept at home to foreign producers like China.

In many regards, Sears is a metaphor for the USA.  Just as Sears has fallen on hard times, so will America.

Why?  Because our government committed to Global Free Trade and therefore lowered our tariff barriers.  Without the protection tariffs provide, Sears succumbed to Walmart’s inexpensive Chinese-made products.  Without the protection tariffs provide, the USA will certainly lose the American dream and hope of an ever-increasingly prosperous people.

The fault is not merely government’s but also that of human nature.  Sears prices were always higher than Walmart’s, so we abandoned Sears to buy at Walmart. It’s human nature to buy low.

But Sears prices were higher because their products were made by Americans.  As a result, we might pay more at Sears, but the excess costs went to our neighbors and other Americans who worked for Sears.  We paid higher prices at Sears, but we also received higher wages.  As a nation, we prospered.

Now, we pay lower prices at Walmart, but we also have fewer jobs, more unemployment and reduced wages.  By buying at Walmart, we may be individually enriched by our savings.  But by buying at Walmart, we are, as a nation, also impoverished.

When we bought American, we all prospered.  When we buy foreign, we may individually seem to prosper, but as a nation we are diminished.

There is something about being “our brother’s keeper” that should cause us to buy American rather than foreign goods.  Buying American is a kind of welfare.  We pay more for our goods and services, but we also keep our brothers employed and prosperous.  In doing so, we also tend to be more prosperous.  By buying foreign made goods, we cut some of our “brothers” out of employment.  Result? They–and we–become increasingly impoverished.

It’s not an accident that Sears went down while Walmart went up.  It’s not an isolated incident, either.  And it’s not a coincidence that Sears’ decline coincides with the elimination of tariffs.  So long as we can purchase inexpensive, foreign made goods, we will not only do so–we will continue to cause higher and higher rates of American unemployment which will eventually impoverish all but the upper 10% of Americans.

Solution?

It’s human nature to buy the least expensive products of comparable quality.  Nothing will change that.  No amount of moral lecturing will persuade people to pay more than they have to.  No matter how ultimately self-destructive it may be, we’ll continue to buy at Walmart instead of Sears.

Therefore there’ll be no individual solution to the “problem” of low, foreign prices–nor to the correlative rising rate of US unemployment and falling wages.

But, if no individual solution is possible, there could still be a national solution.  We could lean on the treasonous whores in the cathouse on the Potomac and compel them to restore high tariffs. Being treasonous whores, they’d scream and shout that we must have low tariffs for Global Free Trade.  But our politicians are, finally, just as self-serving as those of us who shop at Walmart.  If preventing high tariffs could cost them their jobs, they’ll vote for high tariffs.  If we lean on ‘em hard enough, they’ll restore high tariffs.

With sufficiently high tariffs to protect us all from cheap, foreign labor, overseas factories would be forced to relocate into the USA, restore American jobs, reduce American unemployment and restore high, American wages.

Yes, if we restore tariffs, we’ll cause store prices to rise.  But we’ll cause employment and wage rates to rise, too. With higher tariffs, America won’t be as lucrative for the top 10%, but it’ll be a whole lot more prosperous for the bottom 90%.

Restore tariffs and Sears will prosper and so will the whole USA.  Keep low tariffs and this country will come to look like one giant Sears store–devoid of products, devoid of customers and grubby.