The current administration is hell bent on destroying success, as we are evil people. I know some of you folks don’t believe that, but look at the facts, and they speak very clearly to me. There is no will in Washington to promote self reliance, and they will not stop spending our great grand kids money. It is a disgrace, that congress acts like they do, in order to keep their cushy jobs, while we are trying to figure out ways to survive. Yes, there are some large corporations sitting on some money, but they will continue to do business overseas, as we get hammered more and more with ridiculous mandates to conform to government demands. I have worked my whole life, and there are folks out there who refuse to lift a finger to do anything and expect a check for just breathing, and this mentality has grown dramatically in the last 30 years. Go ahead and blast me for my thoughts, I can take it. But until I see real changes in OUR… Read more »

This whole story (Walmart’s, not yours George) is utterly disingenuous, since apparently, beyond all the noise about poor sales, the company announced higher than expected EPS.

Guess why? LOWER CORPORATE TAXES (yes, that’s a quote as one of the 3 reasons why the EPS were up).

I now believe I understand why the company leaked that internal memo. It distracted from that “situation” which was presented to shareholders. The stock won’t take a dip.

That said, I have been unable to understand why the company would be so suddenly and dramatically affected by the higher payroll tax rate in any case. After all, that should drive other consumers to trade down INTO Walmart.

Of course, I also don’t understand why gas prices have gone up 40 cents in less than 30 days. These days when it’s time to get gas, I feel like a commodities broker—if I think prices will rise, I buy more, if I think they’re going to fall, I buy less. That level of volatility has to be unhealthy for the economy as a whole.

The economy is always good all the time for good people and good businesses. One variable a person can control is their income. A person can always go out and make more money if they want to. All those things like payroll taxes, gas prices, and the timing of tax returns sound small and petty and should not have a significant impact on the economy as a whole.

The price of gas goes up, it goes down…I think we need to be careful to pin the blame for Walmart’s issues during the first two weeks of February on this or any other external issue. Who knows whether a succession of storms (vs. an unusually mild and dry February 2012) affected their business? What sorts of changes to their promotional calendar? Did they simply buy the wrong goods in some cases? It usually pays to look in the mirror before blaming others…and that goes for blaming one political party or the other. More broadly, there is continuing evidence that money parked on the sidelines (especially by banks loaning to businesses) is finally being put into action. An article in yesterday’s Wall Street Journal touched on this, and I had a conversation with a manufacturer of steel and wire who found banks much more willing to fund a recent factory acquisition compared to six months ago. Along with the resurgent housing market, increased lending at low interest rates will help move the economy forward at… Read more »

Tony Orlando summed up his case very well.

The government is not that of my parents, nor would it be nearly as effective if it were. The breakdown in the family as the teaching unit of our society, its values, truth and honor is a tragedy. And we have to pay more and more taxes for that socio-political transformation.

The government is encouraging our dependence upon it by trying to micro-manage the economy with endless new regulations control from Washington and its continued failed stimuli. That’s killing the self-determination spirit that built America’s fiscal greatness.

To government, I opine, get out of trying to rule the economy. Go on a diet! Politics just fouls up a free economy because it takes away our “freedom of individual will.”

Consumer spending and the economy will rebound if the government stops trying to manipulate it.

No major political debate from me. I am with Tony. My kids in their 20s tell me about many people they know that are doing nothing and collecting government money. One son in retail tells me about how some of the new employees they have only last a week. They quit, claiming it is too much work. Oh, and they live with their parents.

Go Tony.

Hey, I shop Walmart, but due to some political lobbying groups and the social network world others won’t set foot in a Walmart. At my Walmart, a majority of the associates love the store. My service desk pro has been at the store for 20 years and loves it.

Want to survive this economy? Shop Walmart!

…Go Tony!

With some rebound in consumer confidence, I think we, as a people, have become cautiously optimistic. Spending will continue to go up and down as we exercise this cautious optimism, but we will keep shopping.

The leading issue for the long-term health and future of the economy is the national debt that is nearly $17 trillion. If not dealt with, it will crush the dollar and bankrupt the country. It is simply a matter of math. The current path is unsustainable.

Congress may be divided, but Congress is not the problem. Presidents Reagan and Clinton sat down with both houses of Congress and came up with economic solutions. By following that model, President Obama has an opportunity to create a worthwhile economic legacy. But if he leaves office with a $20 trillion national debt, the country will be in serious trouble.

The primary impact of the payroll tax is exactly as we should expect—although far from what we were told. It hurts the lower income worker disproportionately. It is, in fact, a regressive tax.

That said, the impact of the increase is not to drive shoppers into Walmart. Smart middle and upper incomers are already there, and they did not go away just because we had two straight quarters of positive reported GDP.

The real impact is to drive shoppers OUT of Walmart and IN to the dollar channel, Aldi and other extreme discounters.

The impact of fiscal policy fidgeting (and especially taxes) is always greater on the lower income group and on staples. It takes something fundamental in the markets to move upper incomers’ activity in the luxury markets.

The economic downturn is and has been in full strength since fiscal year 2008. Proof of this exists in unemployment numbers, unemployment benefit drops/expiration, food stamp enrollment increases, and disability enrollment increases from the unemployed. When you factor in the number of homeowner mortgages that are foreclosed, short sold and “under water” along with businesses closing or filing for chapter 11 protection, one must conclude there is no recovery, stagnant or otherwise. Real estate agents are making money on short sales. The investment houses are making money on forced mergers and corporate buybacks. As for the banks, they are rewriting old bad loans and mortgages for newer bad paper. You will have to do some digging and calculating, but the real money numbers are there and when reviewed might bring a sudden shortness of breath. What is interesting is the relationship of the fuel costs to the economy. The unprecedented increases in fuel costs has almost solely wiped out all but the smallest amounts of individual discretionary spending and corporate lease hold improvements. Not only… Read more »

Tony Orlando is right on. The fact that very large businesses are doing well, and keeping their profits offshore, out of the reach of their crony Washington DC partners, means that class warfare, as usual, has worsened the problem.

The lower and middle classes are being incredibly savaged by Washington policies, and this can only be lied about so long in the press, before the facts become obvious. Unfortunately for them, the punished lower and middle classes aren’t noted for fact—based behavior, which may result in some untoward developments on that front.

Whether those untoward developments are part of the plan, “A crisis is a terrible thing to waste,” someone has apparently been studying and following the Alinsky playbook on class warfare: “The Prince was written by Machiavelli for the Haves on how to hold power. Rules for Radicals is written for the Have-Nots on how to take it away.”

Increased taxes and higher gas prices only decrease the consumer’s available disposable income. With many consumers still deliberating, large purchases will only be put off further in the future. Delay in tax returns will only delay purchases.

Every time Congress does something, it only makes things worst and that is not about to change. Even though we don’t have a budget thanks to the Senate, the estimated government expense is $3.8 trillion. Of that we are borrowing 42% for $1.6 trillion each year. A drop in spending of $85 billion will have little or no effect and the debt will continue to climb.

What is missing is inflation. Salaries have not gone up since 2008 for many, yet inflation has made products more expensive. For too many retailers we are seeing comp sales increases that are less than the inflation rate. So some talk about growth in sales when in fact, we are declining.

This represents the same things we are noticing in both our suppliers’ demand as well as with our retail partners. Only time will tell….

Each of the factors mentioned are essentially short-term problems. There are two others that will, without doubt, wreak incredible damage to the U.S. These are 1) the continually increasing federal debt (currently around $16 trillion and, 2) the printing of money by the Fed (referred to as Quantitative Easing) which is inflating the currency.

Currently the U.S. borrows over $2 billion a day from foreign sources with artificially low interest rates (see #2). Both of these phenomena are unprecedented in American history. When these bubbles pop, which they will, this country will go through something that will make the recent housing/stock market collapse look like a sunny day at the beach.

Will the current economy pick up this year? Maybe, as long as the Fed keeps printing money.

Of the factors noted, it is fuel, fuel, and fuel. The payroll tax simply returned to where it was. Consumers had a break. Lunch is over. Benefits aren’t free. The government has been positioning itself into the sky is falling, self-imposed crisis for decades. The public pays little attention. We have the economy and government we’ve asked for. It is by our own design. In 2008, just as now, consumers spent into $3.00 fuel. They stopped at near $4.00 fuel. It is the same now as it was then. It impacts everything—everything. There is nothing in the forecast that would indicate the economy will improve. Tony is absolutely right. It is by design. The problem now is that it is sooner rather than later. We’ve now surpassed the number of those dependent being greater than those that produce. The math doesn’t work. Yet, as a nation, we said this is what we wanted. All of the factors noted are in the hands of the consumer. They are all interconnected and in their control. We simply… Read more »

The unending printing of money, borrowing of foreign capital to pay debt, and the horrifying and ever spiraling national debt itself will be the undoing of a beautiful and needed bastion of freedom and success that many have taken for granted (The USA). It is really sad and disappointing to me that the “middle class” and especially young people can not see and realize what is happening around them and can not realize the endpoint of the indicators.

If you compare our financial situation with that faced by Canada in the ’90s, by this point in time—in retrospect to their situation—the Canadians were well on their way to correcting (and eventually resolving) the situation. We fail to have yet even faced it. We must be honest with our situation for our own good, our children, and their children.

If we continue on our current path then Wal Mart (and all of us) will definitely have a lot to worry about.

George Anderson points out four valid issues, each micro economic in nature, facing both retailers and consumers. He would do well to amend point #4 to properly make it the Obama Administration and Congress as the malaise that is impacting retailers and consumers. Unsettled health care issues, inflation that is real on food and other necessities, as well as excess regulatory uncertainty are paralyzing decision-makers. Add to these micro-economic points, some macro ones—we are all competing in a world economy. As I write this from Hong Kong, I am reminded that these points are impacting the U.S. retailer and consumer. 1. Weak U.S. Dollar – for the past 10 years, Washington and the Federal Reserve have continued to weaken the U.S. currency. This prompts those with jobs, who are deleveraged, and willing to spend, to make those purchases in hard assets first—that means real estate, commodities, and discretionary spend comes first. Positive Auto sales have been a reflection here. The weak dollar also significantly impacts oil prices. That black gold (and the yellow metal as… Read more »