Carpe Diem

The District of Columbia city council’s hostility to capitalism and Wal-Mart as an ‘economic death wish’

In the video above, Milton Friedman discusses a theory put forth by a Russian dissident mathematician, who made the following argument in an essay published in the book “From Under the Rubble:” just as Freud pointed to the death wish in individuals as a fundamental psychological propensity, the appeal of socialism and the opposition to capitalism is really a form of an “economic death wish” for society on the part of intellectuals. Or recently in Washington, D.C., on the part of city council members, as the example below illustrates.

On May 25, 2011, the Washington Post reported that D.C. Mayor Vincent Gray delivered an ultimatum to Wal-Mart officials when he met with them at the annual convention of the International Council of Shopping Centers in Las Vegas:

If the retail chain wants to enter the District at all, it had better commit to opening at Skyland Shopping Center, the long-delayed redevelopment project in Gray’s home ward that he considers the most important development project in the city. Wal-Mart had announced four sites in D.C. where it wanted to open stores and had been meeting with residents, community groups and members of the D.C. Council to build support.

At the Las Vegas meeting, Gray, the deputy mayor, and five members of the city council made it clear that they would not support Wal-Mart’s efforts to open any stores in the city without a Skyland store, and issued an ultimatum:

“They’re interested in developing four stores,” Gray said. “All of us said, ‘What about a fifth store?’ They hemmed and hawed, and it ultimately came down to — you have a choice. You can do five stores or you can do no stores. We had five council members and the mayor and the deputy mayor sitting in the room at the meeting . . . so it was a pretty compelling argument. They have to get building permits, don’t they?” he said.

So what did Wal-Mart do when faced with the ultimatum from Mayor Gray? According to yesterday’s Washington Post:

Wal-Mart, the world’s largest retailer, complied. The company signed a commitment to serve as the top retailer in Skyland Town Center, a mixed-use project with a town square and 476 apartments. Skyland, which could break ground next year, would be the largest project built in a D.C. neighborhood east of the Anacostia River, and the city has put up $40 million in subsidies and spent $28 million on other expenses to advance it.

Wal-Mart actually has plans now to open six new stores in the District of Columbia, including one at the Skyland location. You would think that the mayor and city council would throw out the welcome mat to the retail giant, and be thankful for the 1,800 new retail jobs that will be created at the six Wal-Mart locations, the 600 new construction jobs in the city to build the stores, and the affordable groceries that will be available in the District, especially at the several proposed Walmart stores that are located in areas of the city that are officially designated “food deserts.” And of course there are Wal-Mart’s “everyday low prices” including $4 prescriptions that will save District residents collectively millions of dollars every year. All in all, it would seem like a great deal for a city with a jobless rate of 8.5%, almost one percent higher than the 7.6% national average, and in neighborhoods with large African-American majority populations, whose 13.5% average jobless rate is almost double the overall rate.

But that doesn’t account for the “economic death wish” of the district’s city council, which according to Sunday’s Washington Post, voted 8 to 5 last week to impose a “super-minimum wage of $12.50 an hour — well above the District’s regular $8.25 minimum — on retailers reporting at least $1 billion in annual corporate revenue and operating in spaces of 75,000 square feet or more.”

In other words, retailers exactly like Wal-Mart for example. Here’s more of the Washington Post report:

In public statements, Wal-Mart has declined to say how the legislation would affect its plans, other than to warn that it would have “negative consequences.” Several city officials who have been briefed by company representatives say the retailer has not [yet] threatened to cancel stores.

But real estate executives familiar with Wal-Mart’s plans say that if the measure becomes law, the company would shelve plans for the three stores not under construction. That would include the one at Skyland Town Center, a project near to the mayor’s heart and his home in Southeast Washington.

The council’s vote puts Gray (D) under considerable pressure because he has made economic development of underserved areas — particularly in the eastern half of the city — a priority. But vetoing a bill that would give a leg up to low-income workers could be uncomfortable for Gray, who might seek reelection next year.

Gray said Friday that he had not decided whether to veto the legislation, as Wal-Mart called on him to do last week. But he acknowledged that the Skyland project and two others will influence his thinking.

MP: The reality is that the District of Columbia needs six Wal-Mart stores a lot, lot more than the giant retailer, with almost 11,000 stores in 27 countries, needs those six new stores in the business-hostile nation’s capital – especially if it is faced with city-mandated wages that are 50% above the District’s regular minimum wage. But I guess we should never under-estimate the “economic death wish” documented by Milton Friedman above, that afflicts liberals, intellectuals, city council members, and politicians everywhere – and maybe especially in the nation’s capital. And the “economic death wish” concept explains a lot of the attempts to over-tax, over-regulate, and smother the very businesses that create the wealth, jobs, and prosperity that raise our overall standard of living when they are allowed to thrive and expand.

7 thoughts on “The District of Columbia city council’s hostility to capitalism and Wal-Mart as an ‘economic death wish’

  1. thankful for the 1,800 new retail jobs—Perry.

    Actually, I would hope that Wal-Mart reduces net retail jobs.

    Why?

    Wal-Mart, I hope, is a more-efficint retailer than small shops. It is able to deliver goods to market for lower amounts of labor. I hope the people of DC can buy what they need, serviced by a smaller number of retail workers. I like efficient businesses.

    But!

    Then D.C. buyers have extra money, and can spend it on, say, local services, such as hairdressers, or fancier weddings etc.

    So Wal-Marty does not wipe out net jobs—but we can hope it wipes out retail jobs.

  2. The Skyland Town Center is next to the city of Anacostia. Here’s what Wikipedia says:

    Anacostia

    “Anacostia’s population is 92% African-American, 5% Non-Hispanic White, and 3% other…High crime rates, associated with drug trade, reached a peak in the 1990s. In 2005, 62 of the 195 homicides in Washington, D.C. occurred in the 7th District of the Metropolitan Police Department. This figure is down from…133 homicides in 1993.”

    My comment: Normally, politicans of poor black communities try hard to attract businesses, like Walmart. However, most of them avoid those areas like the plague.

  3. DC doesn’t need to be rational because its industry never shrinks. Without Uncle Sam DC would make Detroit look like Zurich.

  4. The left only has an economic death wish for the Great Unwashed masses, not themselves as individuals. Witness Lord Almighty Obama yday admonishing the poor African mud hut dwellers that a car and air conditioning for everyone would be a planet killer. I bet that went over well as he shuffled off to his own personal luxury jumbo jet.

    http://www.theblaze.com/stories/2013/07/01/obama-in-africa-the-planet-will-boil-over-if-everybody-has-a-car-air-conditioning-and-a-big-house/

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