Sunday, May 01, 2005

Andrew Cassel is off his rocker

May is Buy Local Month in Philly. Sounds pretty cool: A month where we support our local business owners, and take stock of all that we have here. Why, well, as Jeff as at America's Hometown points out, a great reason is that:
...for every $100 spent at a locally owned business, $45 goes back into the community while only $14 comes back when that same $100 is spent at a chain store?
Generally, it is better to have local stores, with local concerns, owned by people with local interests, and far more responsible to local concerns, in our cities.

But, according to Andrew Cassel, the Inquirer business columnist, this is a bad idea. Hell, not even a bad idea, a "bogus" idea.

Apparently, Cassel doesn't feel the need to use facts to support himself, just BS neo-classical economics scare words. For example:
SBN offers economic-impact studies to bolster its position. Produced for activists battling "big-box" chains in Maine, Texas and elsewhere, the studies assert that money spent at such places "leaks" out of the region, enriching faraway stockholders, managers and suppliers.

By contrast, the studies say, money spent at "local" firms tends to be recycled locally, supporting home-town producers, workers and governments.

It's an attractive notion, particularly if you already find shopping at chains and big-box stores distastefully plebian.

But it's almost certainly bogus.
OK, so, the Sustainable Business Network has put forth the notion that the money from locally-owned businesses is recycled more locally. And, Cassel responds by saying that argument is "bogus." Yet, when you read the article, you see he does not once back up that claim. Instead, he simply moves the goal posts, saying economists would not call it "efficient." But, SBN never talks about "efficiency," they talked about the economic impact our dollars have.

And, because he cannot argue with the the fact that more money stays locally when business are owned locally, Cassel twists the arguments, in some bizarre ways, and changes the goal posts.

For example:
A community that truly practiced SBN's idea of "local exchange" would be a very poor community indeed.

In fact, no matter where you look, the healthiest, richest cities and nations are those that do precisely the opposite: Open commerce and investment, and connect with the rest of the globe as much as possible.

To economists, favoring a city's "local" firms over others is no different than a nation discriminating against foreign imports through tariffs or other trade barriers. Both tend to reduce competition, which inevitably leads to higher prices or lower-quality products for consumers.

Whatever benefits come from recycling dollars through a community are exactly matched by what consumers save when they buy the best-priced or best-made product in the market. If you save $1 buying at Home Depot rather than your corner hardware store, that's $1 you can use to help the local economy in other ways. You needn't feel guilty about it.
So, according to Cassel, big national chains, such as Wal-Mart, are what Philly needs more of? We should be, instead of trying to cultivate our own entrepreneurial class, trying to clear more and more lots for Wal-Mart? Maybe so they can bring their wonderful labor practices and wages here? So that their profits, instead of coming back through Philly, can be moved into some Arkansas tax shelters for the Waltons?

And, "favoring" local firms leads to less competition? Really? I think it is exactly the opposite, as those with local knowledge of markets and tastes, with personal relationships with their cities and customers, can provide real competition with their national behemoth friends.

And, of course, the SBN is not telling people to pay more for their goods, or buy inferior products. They are simply saying that when you think of the cost/benefit of your purchase, as we each inherently do, remember that certain purchases have a far better effect on Philly than other purchases do. I would certainly rather profits from my shopping go to someone invested in Philadelphia than a multi-national corporation who is constantly pushing the envelope of tax-cuts, and whose economic profits are as likely to go through a tax-loop than go towards Philadelphia.

Oh, and um, I think California, with an economy roughly the size of France, is a pretty vibrant place, don't you? Well, they have constantly been fighting Wal-Mart. So has New York City, that awfully struggling little village. Maybe Cassel should step in and help them out a little bit.

Efficiency. What a great sounding word. Too bad it is economist bullshit. Yeah, it would be more efficient in an neo-classical economic sense if we opened the doors to big box stores, and helpd them get rid of local competition. Of course, it would also be far more "efficient" if we eliminated the minimum wage, and let every poor person work for as much as they could bargain for. It would also be more "efficient" to eliminate overtime, and the 40 hour work-week. And, of course, the conversion of public schools into a pure voucher system, where the market truly determines everything, would be far, far more "efficient." Finally, with that, we should also eliminate that inefficient redistributive crapola we call social security, Medicare or Medicaid.

An economist's vision of efficiency has a few problems. Namely, it does not seem to have met a few concepts: Reality, humanity, common sense, or intelligence.

Then, there is this wonderful nugget:
I'm frankly also troubled by the idea of singling out certain firms for promotion based on who their owners are. What makes SBN's campaign so different from one urging people to patronize businesses owned by Christians, or heterosexuals, or white people?
Yeaaaaah. Buying a book from a local store, as opposed to the fiercely anti-union Borders, is the same as being racist. Nice logic on that one!

Buy local this month, and every month. Support local businesses, help Philly grow, and piss off Andrew Cassel.

2 Comments:

At 12:41 PM, Anonymous Anonymous said...

Cassals is usually a pretty fair-minded - even liberal-leaning - business columnist, but I have to agree that his Sunday column missed the mark. Personally, I try and shop with local merchants every day of the year, not just one month out of it.

 
At 7:13 PM, Anonymous Anonymous said...

No he's not. He consistently writes articles laced with opinions not backed up with facts. Facts are like kryptonite to Cassel. I have emails exchanges with him to prove it.

 

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