On Wednesday, Walmart stock went down by over 10%. And over the following two days, it has slowly gone down another 3%. Walmart did announce that earnings for the next year will be 6% to 12% less. But as Michael Hiltzik pointed out, this is primarily due to investments that the company is making. In particular, Walmart is raising wages and improving its ecommerce capabilities. To offset this, the company is going to do a $20 billion stock buyback, which should increase shareholder value. But that was apparently not good enough. And clearly, this wasn’t an impetuous reaction from Wall Street — the slide continues.

What the whole thing shows is how American finance is razor focused on short term profits. The things that Walmart is doing are undoubtedly good for its long term profitability. In fact, this has traditionally been the point of having stocks. It is a way for businesses to raise money so that they can invest in their infrastructure. But today, it seems the only point of stocks is to have a quarterly return. The stock traders figure that they can always buy back into Walmart after it is done with its worker and capital improvements. They don’t need to be part of the process, because actual business investment is scary.

As I write this, the total value of Walmart stock is down over 12%. Supposedly, this means that the company is worth that much less than it was Wednesday morning. You know: the perfection of markets and all. But this just shows that Wall Street doesn’t actually reflect the value of companies. It is some kind of sick and twisted notion of wealth where companies are worth only what they can bring in immediately. It is this kind of thinking that never would have gotten us to the Moon or even to civilization.

Although I think this is a particular dysfunction of modern Wall Street, this has actually always been the problem with capitalism. It really is great at doing the minutia of production and distribution. If you need to produce and distribute disposable diapers, capitalism is absolutely the best way there is for getting them to new parents. When it comes providing prenatal care for mothers, capitalism is a particularly bad system. So that ought to be settled. But as a society, we seem incapable of looking objectively at capitalism, and see it rather as a law of the universe that can’t be questioned.

But it is very disturbing that as proven a moneymaker as Walmart can’t look out for its long term interests without being savaged. Investors would rather use their money to get certain immediate profits than do the work of actual investment. There are only two possibilities in the Walmart case. It’s either that the investors are panicking over nothing — they care only about profits in the next year and not at all about Walmart’s long term profitability. Or it is that investors greatly overvalued it before based only on short term considerations, not calculating its need to continue to invest in order to grow.

This is a great example of the failure of capitalism. And part of it is that the rich understand that they don’t need to worry about the long term. If things go wrong, the government — which they spend so much time complaining about — will be there to bail them out. So they base everything on a three month time frame. Squirrels plan further ahead.

I heard from Jonathan Chait that, The New Conservative Argument to Ignore Climate Change Is Even Dumber Than the Old One. It seems that National Review came up with a “clever” question they wanted the Democrats asked at Tuesday’s debate, “Do you support President Obama’s EPA restrictions on emissions even though science reporters at The New York Times admitted in a recent story that restrictions will do nothing to combat climate change by themselves?” Chait noted what should come as no surprise to readers here: that’s not actually what the Times article said.

But what I thought was interesting was the idea that we should do nothing about climate change if that thing all by itself doesn’t fix the problem. It’s kind of like they took Zeno’s Paradox as a proof: if you add up a bunch of small thing the end result is nothing! I know, I know: because National Review started in large part to push back against the stupidity of the conservative base, you think it still ought to do that. But those days are gone and the most you can expect of conservative elites is a resigned acceptance of the way things are. After all: how else are they going to get their regressive tax cuts?

So I present you with a few of my own examples of things that are not worth doing because they alone will not fix a problem. Chait offered this own: calling 911 when you have a heart attack and buying groceries to feed your children. In addition, I offer the following, which I’m sure National Review (actually, Stephen L Miller) obviously thinks (because consistency is the cornerstone of conservative thinking):

• Why work out in the gym when that one work out isn’t going to make you stronger?
• There’s no point of driving on the right side of the street, because that alone is not going to keep you safe.
• Why practice a musical instrument when that one session isn’t going to make you a good musician?
• There’s no point of starting a diet, because that first day of eating less isn’t going to make you thin.
• Why put on the brakes when it is clear you are going to hit the car in front of you? In fact, why not hit the accelerator?

There are obvious political cases too: we shouldn’t enact any healthcare reform because nothing will fix all of the problems. Basically National Review would make that case since they want the government to do nothing other than those things it does now that funnel wealth from the bottom of the economy to the top. Of course, with global warming, it’s clear that addressing the problem would be a good thing even if it didn’t fix the problem. The National Review position reminds me very much this cartoon:

As Chait noted, “The new talking point rests on grade-school-level sophistry.” You would think that conservative thinking would have nowhere to go but up. Instead, they always find a way to go down.

Last year, I wrote an article that got quite a lot of attention thanks to a tweet by Max Blumenthal, News Bias Is a Choice to Lack Diversity. The article was about the implicit bias in the press because the reporters are all of the upper-middle and upper classes — cut off from the worlds of middle and lower class workers. I wrote, “This is why business reporters seem to only find news about the management side of business interesting. They don’t have any friends who are in labor unions.” The article got enough attention that Matt Yglesias read it and responded that reporters do known people in unions because most newspapers are unionized. Note the change from “are friends with” to “know.”

It’s a telling comment. I like Yglesias’ work very much. But he is blind to the interests of lower class workers who were so very well represented by unions in the decades before he was born. And he’s very much typical of a particular group of “data journalists” most symbolized by Vox. Again, I read Vox every day — they put out great work. But despite the publication’s claim that it is all about data, it is constrained as much by ideology as every other news outlet. It is just that their brand of soft neoliberalism is easily mistaken for the truth.

Erik Loomis over at Lawyers, Guns & Money has been on this beat for a while. I first noticed it with an article earlier this month, What Does Dylan Matthews Think The Worst New York Times Article Published in the Last Decade Is? It turned out that it was article by Paul Theroux, The Hypocrisy of “Helping” the Poor. Basically, the Vox senior correspondent thought that it was wrong — Really wrong! — to complain about globalization hurting poor people in America when it was helping poor people in Bangladesh.

Matthews original complaint was just a tweet. Now, two articles have been published attacking the original article. Loomis has all the details, More on Paul Theroux, the Greatest Monster in Known History for Caring About American Workers. And he dives pretty deeply into the subject of the Washington data journalists’ ideological dysfunction. It is a mindless acceptance of globalization as a Good Thing™. We all know that, all things equal, more trade is a good thing. Thus, any given worker complaining about their troubles should just shut up.

This is almost literally true of Annie Lowery. A woman in Theroux’s article was complaining about how the Clinton Foundation did all this work in Africa, “Don’t they realize our people need help?” To which Lowery responded, “Not in the way that people in Zimbabwe do, lady. Not even close.” It’s a shocking display of class based disdain. As if a paraplegic can’t complain so long as there are quadriplegics in the world. And as Loomis points out, it shows that they approach the problem of poverty “from 30,000 feet.” They have no connections to these people, just as their analyse of Uber is all about them getting more convenience in their urbane lives and not about struggling low-middle class drivers.

Jeff Spross at The Week provided a far more expansive view of the issue, Us against them? Why Globalization Doesn’t Have to Pit American Workers Against the World’s Poor. Basically, he’s making a Dean Baker kind of argument: globalization hurts the poor in America because our government has made it that way; we can have globalization that works for everyone. But what I want to focus on is Spross’ criticism of the “American preference for ‘absolute’ poverty measures.”

The reason I bring it up is because of this great lecture by Richard Wilkinson, where he looks at economic inequality. Between countries, inequality doesn’t seem to have much effect on broadly defined health measures. But it has a clear and large effect within countries. Clearly, this is a study only of advanced economies, and Zimbabwe is seriously messed up. But the idea that poor people in Mississippi should just shut up because other people are doing worse outside the country 10,000 miles away misses the whole point.

My takeaway from this is just how callous we all are. I don’t believe that the Vox crowd really cares any more about the people in Zimbabwe than they do the people in Mississippi. They certainly don’t have any experience with the people who are suffering there. But it is really the fact that having a callous disregard for the suffering in Mississippi and a deep concern for the suffering in Zimbabwe pushes their existing belief that globalization is a Good Thing™. All of the neoliberal data journalists should listen to Lowery’s own inadvertent wisdom, “The reality, you’ll be surprised to hear, is more complicated.”

Afterword

After I wrote this, I noticed that the brilliant Matt Bruenig wrote, The Muddled Globalization Debate. He looks at the issue in an economic way and notes, “The fact that goods cost 10% less than they would in the alternative doesn’t help someone whose income is 30% less than the alternative.” It gets to the same issue, which is just that Lowery and company are clueless about the effects of globalization on actual people. They can wave a hand and say that there are things we could do to minimize the harm, but the fact remains that we don’t. It’s like I wrote earlier this year, No Trade Deals Until Our Economy Is Fixed. I’m not interested in trade deals even if they do increase GDP as long as the vast majority of the gains all go to the top.