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The Walmart model

innomen
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9/19/2011 3:09:58 AM
Posted: 5 years ago
I know that my position on Walmart is not popular among libertarians, but I'll stir the pot anyway.

If we were to point to a single entity that was responsible for hurting the American economy it would, in my opinion, be Walmart. Walmart is the largest corporation in the world, and has stronger buying power than any other retailer on earth, and as such has had the ability to control, create and destroy it's suppliers by naming the prices they are to be charged. They have forced more outsourcing to China and elsewhere, and are responsible for more closures of American manufacturing than any other single company in the world.

I fully understand the benefits of being able to provide products at prices that were not previously available at such an aggressive price, and I enter that benefit into the mix, but still conclude that Walmart is a massive net negative to the US economy. I also acknowledge the large number of low paying, unskilled, jobs Walmart makes available, but would further conclude that they have displaced more American workers, particularly manufacturing jobs, than created.

It is important to know that i don't propose any sort of restriction upon, or action to be taken against Walmart; although I wouldn't shop there, nor recommend anyone shopping there for more reasons than i illustrated above.
darkkermit
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9/19/2011 3:33:02 AM
Posted: 5 years ago
Stating that walmart is "taking jobs from Americans" is committing the make-work fallacy. Both parties benefit from comparative advantages. Those who "lost" their manufacturing jobs should be able to find new jobs. Since Walmart makes goods and services cheaper it allows others to be larger disposal income and create other jobs.

The monopsony power could be a conern, but I don't think Walmart is big enough to be considered a "single seller". Single-payer healthcare programs and military contractors operate under the monopsony model, yet very few people complain about that.

Walmart actually pays its workers above minimum wage, so I don't understand the whole "underpaid workers". In a free society, workers have the freedom to choose their own occupation. It's not as If there aren't other options. If a person doesn't have any, then Walmart is doing a valuable service through hiring someone who would be unemployed.

But yea, I'm surprised that a libertarian like yourself is against Walmart. Although you recognize its right to exist.
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innomen
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9/19/2011 4:39:05 AM
Posted: 5 years ago
At 9/19/2011 3:33:02 AM, darkkermit wrote:
Stating that walmart is "taking jobs from Americans" is committing the make-work fallacy. Both parties benefit from comparative advantages. Those who "lost" their manufacturing jobs should be able to find new jobs. Since Walmart makes goods and services cheaper it allows others to be larger disposal income and create other jobs.

That's not how it works though. Spending less money on a product does not create a job. The jobs that are being displaced are generally higher paying jobs, that's why they were outsourced in the first place, and are being given the opportunity for a lower paying, lower skilled job, like a Walmart greeter.

The monopsony power could be a concern, but I don't think Walmart is big enough to be considered a "single seller". Single-payer healthcare programs and military contractors operate under the monopsony model, yet very few people complain about that.

Really? I think there are people actually do complain about a lack of competition, nor do I think those are adequate analogies. The model is different.

Walmart actually pays its workers above minimum wage, so I don't understand the whole "underpaid workers". In a free society, workers have the freedom to choose their own occupation. It's not as If there aren't other options. If a person doesn't have any, then Walmart is doing a valuable service through hiring someone who would be unemployed.

I don't remember saying minimum wage, I said low paying wages, and are you asserting that they are paying on par with the industry jobs that they have displaced? I am speaking in terms of net benefit/cost, and the cost to the American economy is a net negative.

But yea, I'm surprised that a libertarian like yourself is against Walmart. Although you recognize its right to exist.

Because I think they employ shi++y business practices that have permeated the rest of corporate America. I'm all for high profits, and I think they are actually not achieving that in the overall scheme of things, nor do I think that their singular control over a collection of vertical markets is conducive to a free market.
darkkermit
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9/19/2011 11:11:59 AM
Posted: 5 years ago
Would you be willing to debate the following resolution "On balance Walmart does more harm then benefit to society"? I will be CON, you will be PRO
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Greyparrot
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9/19/2011 11:21:07 AM
Posted: 5 years ago
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.
Greyparrot
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9/19/2011 11:24:34 AM
Posted: 5 years ago
Also, stating Walmarts position from supply side only, does not take into the balancing effect of a more attainable standard of living multiplied by millions of consumers, most of which would have just gone without. That is a huge benefit to the overall economy.
Ragnar_Rahl
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9/19/2011 11:26:10 AM
Posted: 5 years ago
Spending less money on a product does not create a job.
Spending less money means you need less money means you need less pay in your job. If tomorrow all prices halve and all salaries halve, nothing bad has happened. And many people are in lower tax brackets. :P

Of course, the impacts of Wal-Mart, or any other company, are unevenly distributed, but so be it.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
innomen
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9/19/2011 11:54:17 AM
Posted: 5 years ago
At 9/19/2011 11:11:59 AM, darkkermit wrote:
Would you be willing to debate the following resolution "On balance Walmart does more harm then benefit to society"? I will be CON, you will be PRO

Specifically American, and specifically the economy.
innomen
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9/19/2011 11:55:42 AM
Posted: 5 years ago
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.
Greyparrot
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9/19/2011 1:11:05 PM
Posted: 5 years ago
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

That does not necessarily mean they pulled efficient components out of the AMERICAN economy to achieve their efficiency.
Greyparrot
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9/19/2011 1:14:40 PM
Posted: 5 years ago
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

I say that statement pertaining to the whole economy. For example: you can say a company "X" that rewards people for not working and not producing is quite an inefficient allocator of resources for the entire economy.

So what exactly is it about Walmart's business practices that makes allocation of resources for all of AMERICA inefficient?
innomen
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9/19/2011 4:05:00 PM
Posted: 5 years ago
At 9/19/2011 1:14:40 PM, Greyparrot wrote:
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

I say that statement pertaining to the whole economy. For example: you can say a company "X" that rewards people for not working and not producing is quite an inefficient allocator of resources for the entire economy.

So what exactly is it about Walmart's business practices that makes allocation of resources for all of AMERICA inefficient?

I'm not sure where you're getting this word inefficient from. I didn't use it to describe Walmart.
darkkermit
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9/19/2011 4:08:02 PM
Posted: 5 years ago
At 9/19/2011 4:05:00 PM, innomen wrote:
At 9/19/2011 1:14:40 PM, Greyparrot wrote:
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

I say that statement pertaining to the whole economy. For example: you can say a company "X" that rewards people for not working and not producing is quite an inefficient allocator of resources for the entire economy.

So what exactly is it about Walmart's business practices that makes allocation of resources for all of AMERICA inefficient?

I'm not sure where you're getting this word inefficient from. I didn't use it to describe Walmart.

So why are you against a business that allocates resources effectively?
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innomen
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9/19/2011 4:25:41 PM
Posted: 5 years ago
At 9/19/2011 4:08:02 PM, darkkermit wrote:
At 9/19/2011 4:05:00 PM, innomen wrote:
At 9/19/2011 1:14:40 PM, Greyparrot wrote:
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

I say that statement pertaining to the whole economy. For example: you can say a company "X" that rewards people for not working and not producing is quite an inefficient allocator of resources for the entire economy.

So what exactly is it about Walmart's business practices that makes allocation of resources for all of AMERICA inefficient?

I'm not sure where you're getting this word inefficient from. I didn't use it to describe Walmart.

So why are you against a business that allocates resources effectively?

Against.....hmmm, i'm not sure i even said i was against this business per se, but i find that their business practices are on the whole detrimental to the American economy.

You're from Rhode Island right? You know there was a small Umbella factory in southern RI. This company sold their umbrellas to Walmart, and Walmart told them they must reduce their prices. The company cut pay and reduced it's work force in order to make the pricing more competitive, but Walmart told them that their price was still too high, and this is where they had to be.....The umbrella company said they couldn't make them at that price they'd go out of business, and Walmart said fine and got their umbrellas from China. The umbrella company went out of business. Now i understand your point, - good that company should have gone out of business because it wasn't efficient enough to compete.

I've also been to RI and it would seem like your entire state is filled with these sorts of umbrella companies. The net result is RI.
Greyparrot
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9/19/2011 4:34:56 PM
Posted: 5 years ago
Do you think taxpayers have an obligation to subsidize inefficient producers? We do that now. Should we expand on this practice?
darkkermit
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9/19/2011 4:38:59 PM
Posted: 5 years ago
At 9/19/2011 4:25:41 PM, innomen wrote:
At 9/19/2011 4:08:02 PM, darkkermit wrote:
At 9/19/2011 4:05:00 PM, innomen wrote:
At 9/19/2011 1:14:40 PM, Greyparrot wrote:
At 9/19/2011 11:55:42 AM, innomen wrote:
At 9/19/2011 11:21:07 AM, Greyparrot wrote:
to Innomen:

I just want to know exactly what it is about Walmart that you think contributes to an innefecient allocation of resources.

I didn't say that, actually i would say that they are so good at it that they have pulled major components out of the AMERICAN economy to acheive their efficiency.

I say that statement pertaining to the whole economy. For example: you can say a company "X" that rewards people for not working and not producing is quite an inefficient allocator of resources for the entire economy.

So what exactly is it about Walmart's business practices that makes allocation of resources for all of AMERICA inefficient?

I'm not sure where you're getting this word inefficient from. I didn't use it to describe Walmart.

So why are you against a business that allocates resources effectively?

Against.....hmmm, i'm not sure i even said i was against this business per se, but i find that their business practices are on the whole detrimental to the American economy.

You're from Rhode Island right? You know there was a small Umbella factory in southern RI. This company sold their umbrellas to Walmart, and Walmart told them they must reduce their prices. The company cut pay and reduced it's work force in order to make the pricing more competitive, but Walmart told them that their price was still too high, and this is where they had to be.....The umbrella company said they couldn't make them at that price they'd go out of business, and Walmart said fine and got their umbrellas from China. The umbrella company went out of business. Now i understand your point, - good that company should have gone out of business because it wasn't efficient enough to compete.

I've also been to RI and it would seem like your entire state is filled with these sorts of umbrella companies. The net result is RI.

Again, your just seeing the seen, and not seeing what isn't seen. If Walmart sells cheap goods and services, then it gives consumers more money, which increases demand for other goods and services. Chinese workers also receive a salary and can use it to create investments or buy American products. You can see the "harm" of Walmart, but you can't see the benefit. Its the classic broken window fallacy.

Come on innomen, your just using leftist economic reasoning. I thought you were better then that.
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Greyparrot
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9/19/2011 4:46:17 PM
Posted: 5 years ago
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

No, you MUST assume they have no choice but to work there.

That is really the one that makes me shake my head.
darkkermit
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9/19/2011 4:50:50 PM
Posted: 5 years ago
At 9/19/2011 4:46:17 PM, Greyparrot wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

No, you MUST assume they have no choice but to work there.

That is really the one that makes me shake my head.

are you being sarcastic? If its assumed true that they have no choice but to work there, the Chinese people are better off then say starving. If the job didn't improve their quality of life, they wouldn't take it.
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innomen
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9/19/2011 4:53:20 PM
Posted: 5 years ago
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?
Greyparrot
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9/19/2011 4:54:11 PM
Posted: 5 years ago
At 9/19/2011 4:50:50 PM, darkkermit wrote:
At 9/19/2011 4:46:17 PM, Greyparrot wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

No, you MUST assume they have no choice but to work there.

That is really the one that makes me shake my head.

are you being sarcastic? If its assumed true that they have no choice but to work there, the Chinese people are better off then say starving. If the job didn't improve their quality of life, they wouldn't take it.

I am talking about being forced to work there to their own detriment.
innomen
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9/19/2011 4:54:51 PM
Posted: 5 years ago
At 9/19/2011 4:34:56 PM, Greyparrot wrote:
Do you think taxpayers have an obligation to subsidize inefficient producers? We do that now. Should we expand on this practice?

Don't be ridiculous. I haven't proposed any sort of involvement at all.
darkkermit
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9/19/2011 4:55:54 PM
Posted: 5 years ago
At 9/19/2011 4:53:20 PM, innomen wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?

That's quite the zero-sum game fallacy. The US produces what were good at producing, and the Chinese produce what they have are good at producing. The result is better products for both parties.
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Ragnar_Rahl
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9/19/2011 4:56:10 PM
Posted: 5 years ago
The sum is greater than zero.
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
Greyparrot
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9/19/2011 4:57:59 PM
Posted: 5 years ago
At 9/19/2011 4:54:51 PM, innomen wrote:
At 9/19/2011 4:34:56 PM, Greyparrot wrote:
Do you think taxpayers have an obligation to subsidize inefficient producers? We do that now. Should we expand on this practice?

Don't be ridiculous. I haven't proposed any sort of involvement at all.

Yet you lament for businesses that have failed due in large part to the efficiencies of Walmart. Would you rather see Walmart erased? That would be close to the same effect as subsidies for those RI umbrella makers, although subsidies would generate amazing amounts of redtape waste.
innomen
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9/19/2011 5:00:32 PM
Posted: 5 years ago
At 9/19/2011 4:55:54 PM, darkkermit wrote:
At 9/19/2011 4:53:20 PM, innomen wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?

That's quite the zero-sum game fallacy. The US produces what were good at producing, and the Chinese produce what they have are good at producing. The result is better products for both parties.

The Chinese are now good at producing EVERYTHING, and getting better.

What will happen is the price of Chinese labor will begin to increase so that companies will look elsewhere, but they don't see that happneing until 2025.

So tell me Dark, how are the streets of Cranston or Warwick these days? From what I've seen there must be something to account for that.
Greyparrot
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9/19/2011 5:00:32 PM
Posted: 5 years ago
At 9/19/2011 4:53:20 PM, innomen wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?

When a country sells a hi tech fertilizer to another country that enables a 400% increase in food production, where is the displacement? I do not see this cause and effect relationship in many of these types of exchanges.
darkkermit
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9/19/2011 5:00:52 PM
Posted: 5 years ago
At 9/19/2011 4:54:11 PM, Greyparrot wrote:
At 9/19/2011 4:50:50 PM, darkkermit wrote:
At 9/19/2011 4:46:17 PM, Greyparrot wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

No, you MUST assume they have no choice but to work there.

That is really the one that makes me shake my head.

are you being sarcastic? If its assumed true that they have no choice but to work there, the Chinese people are better off then say starving. If the job didn't improve their quality of life, they wouldn't take it.

I am talking about being forced to work there to their own detriment.

Explain.
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darkkermit
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9/19/2011 5:06:41 PM
Posted: 5 years ago
At 9/19/2011 5:00:32 PM, innomen wrote:
At 9/19/2011 4:55:54 PM, darkkermit wrote:
At 9/19/2011 4:53:20 PM, innomen wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?

That's quite the zero-sum game fallacy. The US produces what were good at producing, and the Chinese produce what they have are good at producing. The result is better products for both parties.

The Chinese are now good at producing EVERYTHING, and getting better.

If they had an absolute advantage then they would of already surpassed the US in terms of GDP. Clearly the United States has better capital resources and produce other goods and services.

What will happen is the price of Chinese labor will begin to increase so that companies will look elsewhere, but they don't see that happneing until 2025.

China becomes a developed nation. What is your point?

So tell me Dark, how are the streets of Cranston or Warwick these days? From what I've seen there must be something to account for that.

Corruption and unionized pension funds tend to suck up the state budget :).
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innomen
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9/19/2011 5:12:57 PM
Posted: 5 years ago
At 9/19/2011 5:06:41 PM, darkkermit wrote:
At 9/19/2011 5:00:32 PM, innomen wrote:
At 9/19/2011 4:55:54 PM, darkkermit wrote:
At 9/19/2011 4:53:20 PM, innomen wrote:
At 9/19/2011 4:43:21 PM, darkkermit wrote:
Also, forgot to mention that walmart improves the lives of chinese people.

That is exactly true. The Chinese standard of living is increasing year over year by 17%, that's a massive increase. Now things aren't working in a vacuum here, they must be gaining at the expense of someone else right? Even if there was mutual benefit, such a number is probably not done without some displacement right?

That's quite the zero-sum game fallacy. The US produces what were good at producing, and the Chinese produce what they have are good at producing. The result is better products for both parties.

The Chinese are now good at producing EVERYTHING, and getting better.

If they had an absolute advantage then they would of already surpassed the US in terms of GDP. Clearly the United States has better capital resources and produce other goods and services.

It is true they haven't surpassed the US yet, but we are now feeling the effects of where they are in the game and where they will be soon enough.

What will happen is the price of Chinese labor will begin to increase so that companies will look elsewhere, but they don't see that happneing until 2025.

China becomes a developed nation. What is your point?

Well, my point is that then there will be a labor cost that will cause manufacturing to start looking for a new market.

So tell me Dark, how are the streets of Cranston or Warwick these days? From what I've seen there must be something to account for that.

Corruption and unionized pension funds tend to suck up the state budget :).

And all those manufacturers? I think even Hasbro outsourced a huge number of jobs to stay afloat. I know your state pretty well, and although the union hacks, and state hacks have sucked out the state, the manufacturing base of RI is pretty much decimated.