http://www.jsonline.com/story/index.aspx?id=400638

Wal-Mart, China and Wisconsin
By JOSEPH GECK

Do commentators and politicians realize the true complexity of the issues about which they complain? If what they support and what they attack is examined in a wider context, there are many inconsistencies.

Every time Wal-Mart hits the news, the conservative talk show hosts and columnist thought-police cry "liberal attack on free enterprise." Wal-Mart is a business success story and has found a way to bring goods to the consumer cheaply. But the conservatives' defense of Wal-Mart is contradictory in light of other information.

Some conservatives do not like China because it is a non-democratic, controlled economy that has become a drain for U.S. manufacturing and a military threat to Taiwan.

Two years ago, I was at a conference where two of Wal-Mart's Wisconsin suppliers remarked that Wal-Mart had told them that they had to source their product in China. They were not told to take the cost out or go anywhere in the world to get the product cheaper. Wal-Mart only told these companies to stop making their product locally and source it in China.

Sourcing in China means a big labor cost savings, but when the cost of transportation, inventory lead-time, insurance and duties are added, the average total savings for sourcing in China is only about 25%.

Some U.S. companies achieve that kind of savings here by using new technology and process improvements. If U.S. suppliers with unique technology are forced to go to China by the Wal-Marts of the world, they will find their technology copied.

Some conservatives dislike the flood of illegal immigrants. Wal-Mart has been caught employing illegal immigrants. Wal-Mart has claimed it was an honest mistake.

If local hardware stores get caught hiring illegal immigrants, it might be an honest mistake since they do not have the resources to research Social Security numbers. But when Wal-Mart, with its world-class computer systems, gets caught and claims a mistake, skepticism is in order.

Conservatives complain that China manipulates its currency. They don't seem to have the foggiest notion how China does this. Don't they realize that the huge deficits created by the Bush administration allow China to take excess dollars and pile them into U.S. treasuries?

If we balanced our budgets, China would have no place to put their dollars and the Chinese currency would appreciate, creating a level playing field for struggling American manufacturers. Wisconsin especially is negatively affected because a large part of our economy has been based on manufacturing.

Right now, we see a shift to leftist governments in Latin American countries. Conservatives see this as a problem. I agree that it is a problem for the future of the collective economies of the Americas.

For years, the United States has been preaching fiscal responsibility and conservative democracy to Latin America. Most of these countries have seen their economies stagnate while China's non-democratic, controlled economy grows at a torrid pace. Latin American countries have attempted to balance their budgets to the detriment of their own economic growth while the U.S. has had huge government deficits.

So now, these countries are shifting to the left and are following the example of the most successful Third World economy: China. Latin Americans are poor, but they are not stupid. They want to emulate China's success.

Every one of our international competitors gives some kind of government policy support to industries that they want to protect and nurture. What industries will we support and nurture because they are critical to our future as a world power?

How long can we continue to generate huge debts and allow other countries to use that debt to their trade advantage? Why is the highest priority of some conservative groups making the tax cuts permanent when we are creating a mess for our children and ruining manufacturing companies with the current deficits?

None of these problems will be addressed if politicians and commentators oversimplify issues.

Pogo continues to be right, "We have met the enemy, and they are us."

Unfortunately, Wisconsin is at the tail end of current administration policies and conservative priorities.

Joseph Geck of Waukesha is a self-employed international consultant. His e-mail address is geckj@execpc.com