In this issue:

World's Biggest Speculators Shorting Dollar

L.A. Times on the 'Wal-Mart Effect'

Wal-Mart Gobbles Up Rubbermaid Jobs

Wal-Mart Demands Huge Tax Cuts from Cowed Communities

Pennsylvania, N.J. Towns Face Extinction as Industry Vanishes


From Volume 2, Issue Number 48 of Electronic Intelligence Weekly, Published Dec. 2, 2003

U.S. Economic/Financial Digest

World's Biggest Speculators Shorting Dollar

Rumors are rife, according to the London Independent Nov. 28, that Warren Buffett and George Soros, described as the world's most famous speculators, are betting that the U.S. currency will plummet. One unnamed hedge fund manager is quoted as saying: "I have heard that both Soros and Buffett are shorting the dollar. There's a growing belief on Wall Street that the dollar is looking like a one-way bet downwards." A spokesman for Soros said he never commented on speculation. Buffett was also unavailable for comment.

L.A. Times on the 'Wal-Mart Effect'

The Los Angeles Times echoes Lyndon LaRouche on the job-devouring Wal-Mart, in an article in the Nov. 23 edition by Abigail Goldman and Nancy Cleeland. Blasting the "empire built on bargains," for the loss of U.S. manufacturing jobs, the collapse of towns, and the impoverishment of the workforce, the Times reflects the impact of LaRouche Youth Movement organizing in California. In the first of a three-part expose on "The Wal-Mart Effect," the Times charges, that Wal-Mart's rapid growth, based on "cutting prices relentlessly," ironically "exacts a heavy price" on both the U.S. economy, and global economy overall.

"By squeezing suppliers to cut wholesale costs, the company has hastened the flight of U.S. manufacturing jobs overseas," the article notes, adding, "By scouring the globe for the cheapest goods, it has driven factory jobs from one poor nation to another."

As the world's largest corporation—with sales nearly twice those of General Electric—and "a global economic force," Wal-Mart is driving down wages and working conditions, the article declares, "from the shopping centers of Las Vegas to the factories of Honduras and South Asia." Indeed, "Its business is so vital to developing countries that some send emissaries to the corporate headquarters in Bentonville, Ark., almost as if Wal-Mart were a sovereign nation."

Wal-Mart's wages for its own 1.2 million U.S. employees are so low, the article notes, that a full-time worker is not be able to support a family on a Wal-Mart paycheck—unlike General Motors, a company that "brought prosperity to factory towns and made American workers the envy of the world." "With a high-wage union job, an assembly-line worker could afford a house, a decent car, maybe even a boat by the lake."

The article attacks Wal-Mart for increasing the ranks of the unemployed, and impoverishing cities and towns with its low-wage policy. It is "causing upheaval" in the grocery sector. "When a Supercenter moves into town, competitors often are wiped out, taking high-paying union jobs with them." Each Supercenter eats about 200 union grocery jobs, by one estimate. In Las Vegas, for example, California-based Raley's closed all 18 of its grocery stores in the area last December, laying off 1,400 workers, when Wal-Mart invaded.

Small towns are left with "boarded-up commercial centers," the article charges. Meanwhile, cities such as Las Vegas see a sharp increase in the number of employed, but uninsured people, who use emergency rooms for routine medical care, because Wal-Mart's low wages make health insurance unaffordable.

As an example of Wal-Mart's role in the loss of U.S. manufacturing jobs, the article cites the case of Carl Krauss, who owns Chicago-based Lakewood Engineering & Manufacturing Co. He was forced by Wal-Mart to outsource the company's box-fan factory to Shenzhen, China in 2000, where workers earn 25 cents an hour, compared with $13 in Chicago, to meet Wal-Mart's low-price demands. The box fans are now only assembled in Chicago. A staggering 40% of Lakewood's products now are made in China, including most heaters and desktop fans.

Wal-Mart Gobbles Up Rubbermaid Jobs

More than 100 employees were laid off from their jobs at the Rubbermaid manufacturing plant in Winfield, Kansas on Nov. 24, as part of the company's plan to "consolidate" factories, the Winfield Courier reported Nov. 24. The company denied that it plans to close the plant. Four days earlier, Rubbermaid said it will eliminate nearly 300 jobs as it shuts down its factory in Cleburne, Texas (near Fort Worth) by April, claiming it will shift production to Greenville, Texas.

Rubbermaid sells most of its consumer products through Wal-Mart. Since January 2001, under Wal-Mart pressure, Rubbermaid has shut down 69 out of its 400 facilities, and fired 11,000 workers.

Wal-Mart Demands Huge Tax Cuts from Cowed Communities

Wal-Mart is suing the Wyoming County, Penn. Board of Assessment for a 58% reduction in its property taxes in 2004, according to the Tunkhannock New Age-Examiner. The background is this: In January 1993, Wal-Mart purchased 17.5 acres in Eaton Township, located in Wyoming County, Pennsylvania. The Wyoming County Board of Assessment, which assesses taxes, as a matter of procedure, added the Wal-Mart property to the tax rolls for 1994. In September of this year, Wal-Mart demanded a 58% decrease in property taxes from the Board. When it refused, Wal-Mart sued. This is an example of Wal-Mart, the world's largest corporation, bringing throws its enormous weight around to force communities to capitulate to its demands. Were Wal-Mart's suit to be successful, the Tunkhannock Area School District would lose $30,680 annually, Wyoming County would lose $9,186, and Eaton Township would lose $2,922.

Pennsylvania, N.J. Towns Face Extinction as Industry Vanishes

Former thriving "Main Streets" of small towns across the United States, which have been closing down over the past 50 years, are now facing extinction, the Philadelphia Inquirer cautioned Nov. 23: Now, dozens of "older towns teeter on the brink," with vanishing tax bases, due to the industrial blight which surrounds them. More and more "depressed" older towns and boroughs throughout the suburbs, are "buckling" under rising poverty and budget deficits, to such an extent that they threaten even "well-off" communities located miles away.

Every part of the nation is dotted with "deteriorating towns and small, decaying cities," the paper warns, with two of the worst cases being the suburbs around Philadelphia and Camden. These seven counties contain "a ring of decline unusual for its depth and severity," says the Inquirer's Myron Orfield.

According to an Inquirer analysis of the region's 339 municipalities, some 35 are economically "distressed," while an additional 63 are "at risk" of becoming distressed themselves. The total population of the 96 ailing communities is almost 1 million (not including Philadelphia and Camden)—nearly one-third of all suburban residents.

The paper points to the disastrous impact of the collapse of the industrial Northeast, including lack of Federal investment in railroads that "had kept towns hopping as commuter hubs." For example, "Once a thriving industrial center on the Schuylkill, 251-year-old Pottstown has never recovered from the cataclysmic closings of the Bethlehem Steel plant in 1975, and Firestone's tire factory in 1980. In a population of 21,000, more than 3,000 were thrown out of work."

As a consequence of deindustrialization, the "once solidly middle-class" trio of townships comprising Delaware County's eastern end, has declined into "one of the suburbs' largest economic trouble spots." In just 17 square miles are a dozen distressed and at-risk municipalities with a total population of 157,000.

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