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Walmart stockholders are food-stamp junkies
Posted By John Rocker On 03/24/2014 @ 7:53 pm In Commentary,Opinion | No Comments
As a conservative and businessman, I believe there’s nothing better than our capitalist system. Hard work, dedication and perseverance generally mean you’ll be rewarded for your efforts.
Few things are as exciting as seeing a big return on investment for a project you’ve worked long hours to put together and finally see the fruits of labor bloom into monetary reward.
That’s the America dream, isn’t it?
Work hard. Invest your money. Save your money.
Sacrifice today, so later in your life you’ll be able to enjoy your investments after maturation. (Let your money work for you.)
Well, what if one of America’s – scratch that, the entire world’s – largest corporations, touted as a beacon of capitalism, is using your money to work for them?
For those fiscal conservatives worrying about the ballooning costs of welfare assistance like food stamps, the social costs of cutting back taxpayer-funded entitlement programs have finally been qualified by Walmart’s annual report.
The International Business Times is reporting the world’s largest retailer disclosed just how much it relies on food stamps as a portion of its operating revenue, and as a way to ensure it can pay dividends to stockholders.
All publicly traded companies are required to provide the public a list of factors that could harm profitability in the future as part of securities regulations. It’s a way for potential investors to gauge risk factors within the company by disclosure of risks that could hamper their investment’s health.
Walmart doesn’t make anything, producing only a large store with inventory arriving via a just-in-time system of distribution. So, it would make sense that the company would disclose as risks to future earnings such things as a natural disaster, inclement weather or even civil unrest.
But it’s what the International Business Times reported that should cause all conservatives in America to question their support of a company that is blurring the lines into socialist waters:
A couple of items stand as newcomers to Walmart’s menu of risks. Here’s what the annual report released on Friday says:
“Our business operations are subject to numerous risks, factors and uncertainties, domestically and internationally, which are outside our control … These factors include … changes in the amount of payments made under the Supplement[al] Nutrition Assistance Plan and other public assistance plans, changes in the eligibility requirements of public assistance plans, …”
In other words, Walmart for the first time in its annual reports acknowledges that taxpayer-funded social assistance programs are a significant factor in its revenue and profits. This makes sense, considering that Walmart caters to low-income consumers. But what’s news here is that the company now considers the level of social entitlements given to low-income working and unemployed Americans important enough to underscore it in its cautionary statement.
So Walmart is now admitting its stockholders are benefiting from the unparalleled growth in the amount of food-stamps users, and any attempts to reinstitute any personal accountability for Americans represents a risk to the overall fiscal health of the company.
Something smells rotten in Bentonville, Ark., and Washington, D.C.
A taxpayer-funded program like food stamps should only be considered a last resort for American citizens down on their luck and in need of a short-term helping hand as they search for new employment.
Today, the continued growth in recipients of food stamps under Barack Obama has become a huge source of revenue for so-called private companies like Walmart that the executives of the company label potential cuts to the program a “risk” for investors.
This isn’t the first time Walmart has admitted its reliance on government-entitlement programs being an integral part of its business model. The Wall-Street Journal reported back in 2010 comments by Walmart CEO Bill Simon that foreshadowed the risk acknowledgement by the company that cuts to the food-stamp program would have disastrous for stockholders:
Bill Simon, CEO of Wal-Mart’s U.S. business, at a Goldman Sachs conference last week, on behavior at a Walmart store around midnight at the end of a month:
“The paycheck cycle we’ve talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.
“And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when electronic – government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.
“And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours – come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason.”
The company Sam Walton spent his entire life building no longer represents the ideals that helped build America.
Hard work and sacrifice take a backseat to short-term profits that taxpayer funded entitlement programs bring to the Walmart stockholder. The growth in such programs has allowed Walmart managers to become, like the welfare abuser, addicts for even more entitlement programs.
As the risk assessment Walmart released shows, like a drug addict, any such cuts to food stamps will cause the stock price to go into withdrawal.
Our nation is in a lot of trouble, and few stories illustrate this fact better than the incestuous relationship between corporate profits at Walmart and the growth in food-stamp users in Obama’s America. I’d suggest that’s a powerful metaphor to the long-term risk entitlement programs pose to our nation’s health.
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