In 1953, Charles Wilson (President of GM) was asked whether or not there was any conflict between his job and becoming Secretary of Defense. His answer was:
“I cannot conceive of one because for years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big.”
That may or may not have been the source of the phrase:
“As GM goes, so goes the country.”
Since GM failed big time that phrase hardly seems relevant anymore. Ford is actually bigger than GM today, but Wal-Mart is bigger than both of them combined. Wal-Mart has revenues of $421.89 billion, which would rank it as the 25th largest country in the world. Perhaps the more accurate phrase today would be:
“As Walmart goes, so goes the nation.”
Well, Wal-Mart had a really bad awful start to February. According to Bloomberg, internal e-mails at Wal-Mart describe this as the worst start to a month in over seven years:
Walmart is the nation’s largest retailer. It is also famous for low prices. 100 million customers visit Wal-Mart in a week. It has more than 2 million employees. There are some economists who think Wal-Mart is great. There are others who think Wal-Mart is destroying the country. But everyone agrees that Wal-Mart is a major factor in our economy. If people have stopped shopping at Wal-Mart they have probably stopped shopping everywhere. In other words, if this report is true, the economy may have just hit the proverbial wall.
Perhaps this was just a glitch and sales at Wal-Mart will start to rebound. But I suspect that this is not a temporary trend. One could make the argument that this should have been anticipated. Taxes went up on every American on January 1, 2013. Most people did not understand the damage to their pocketbooks until they got their first paycheck either in mid-January or at the end of the month. Suddenly, people started looking at their paychecks and realized that they had less money. They also realized that tax refunds are going to be delayed and gas is back up over $4 a gallon again. And, by the way, health care costs are going through the roof. So, they all did the only thing they could do. They looked for ways to cut expenses. Since a lot of them shop at Wal-Mart, Wal-Mart sales dropped like a stone.
If the economy has hit a wall, then Obama better enjoy his boys’ only golf outing in Florida, because he is in for a rough ride.
