Walmart and the Dems--then and now

Sebastion Mallaby:

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To see the difference between then and now, just look at the Clintons. In the late 1980s and early 1990s, Hillary Clinton sat on Wal-Mart's board; and when Sam Walton died in 1992, Bill Clinton lauded him as "a wonderful family man and one of the greatest citizens in the history of the state of Arkansas.'' Campaigning in the New Hampshire primary that year, Bill Clinton came proudly to the rescue of a local company called American Brush Co. by helping it become a Wal-Mart supplier.

Times change. Last year Hillary Clinton returned a campaign contribution from Wal-Mart, even though she had no compunction in banking a check from Jerry Springer. The nation's most successful retailer, which has seized the opportunities created by globalization to boost the buying power of ordinary Americans, is now seen as too toxic to touch. But a trash-talking TV host is acceptable.

Clinton is not alone in this. The stiff-necked Joe Lieberman, who holds fast to his principles on the Iraq war, recently abandoned his centrist economic credentials by appearing at an anti-Wal-Mart rally. No matter that Lieberman once served as chairman of the business-friendly Democratic Leadership Council. Now he proclaims his determination "to wake up Wal-Mart and say, 'Treat your workers fairly.' "

After Lieberman, a senator from Connecticut, stepped down as chairman of the DLC, he was succeeded by Sen. Evan Bayh of Indiana. Well, Bayh recently showed up at an anti-Wal-Mart rally, too, as has Iowa Gov. Tom Vilsack, who is the current DLC chairman. The Wake Up Wal-Mart campaign bus, which is trundling across the country on a 35-day tour, ensnares prominent Democrats in almost every state it passes through. Harry Reid, the Democrats' Senate leader, appeared at an anti-Wal-Mart event on Saturday, and Sen. Joe Biden and Gov. Bill Richardson popped up at earlier stops. When the campaign bus reaches Washington state on Labor Day, both Washington's Democratic senators are expected to greet it.

How can supposedly centrist Democrats defend this betrayal of their principles? Some claim that their beliefs are consistent, but that the company has changed: The Wal-Mart of the early 1990s mainly bought American, whereas today's irresponsible monster buys cheap stuff from China. But this argument merely illustrates how far Democrats have come. Since when did the party's centrists believe that trading with China is evil? It was the Clinton administration that brought China into the World Trade Organization.

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The truth is that none of these Democrats can resist dumb economic populism. Even though we are not in a recession, and even though the presidential primaries are more than a year away, the DLC crowd is pandering shamelessly to the left of the party -- perhaps in the knowledge that the grocery workers union, which launched the anti-Wal-Mart campaign, is strong in the key state of Iowa.

For a party that needs the votes of Wal-Mart's customers, this is a questionable strategy. But there is more than politics at stake. According to a paper for the National Bureau of Economic Research by Jerry Hausman and Ephraim Leibtag, neither of whom received funding from Wal-Mart, big-box stores led by Wal-Mart reduce families' food bills by one-fourth. Because Wal-Mart's price-cutting also has a big impact on the non-food stuff it peddles, it saves U.S. consumers upward of $200 billion a year, making it a larger booster of family welfare than the federal government's $33 billion food-stamp program.

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It is clear that listening to unions has not made Democrats smarter. The campaign against Walmart has to be one of the biggest political mistakes of 2006 and probably 2008. It has replaced Haliburton and Enron as a Democrat boogy man, but unlike those two companies, many of the voters know Walmart is a place that has increased their standard of living and that the Democrats want to reduce that standard of living by making Walmart raise prices. How smart is that?

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