Retail Politics

Yes, politics matters. But in the end, the macroeconomic climate matters a lot more. Wal-Mart's success ultimately depends on whether the lower-income and middle-income customers on whom it depends are doing well or getting eaten up by stagnant incomes and rising costs for health care and gas. Here, again, the last two decades offer a pretty good contrast. In the 1990s, when a Democrat was in the White House, the rising economic tide lifted all boats (though not all boats equally), and Wal-Mart benefited. In this decade, the rising tide lifted only the yachts. The Bush years have been something of an economic disaster for people on the lower rungs of the income ladders. Census data show that household income in 2006 was below its 1999 peak and that the uninsured rate has steadily risen throughout the decade. Layer on soaring energy prices in the past couple of years, and you've got trouble. It's not all the fault of Bush or congressional Republicans, of course. But it's pretty clear that the dominant fiscal and economic policies of the past eight years—massive tax cuts for the wealthy, economic royalism, hostility to labor, and neglect on health care—haven't made things better for Wal-Mart customers.

Instead of asking whether a particular candidate or political party will be favorable to Wal-Mart's labor-relations policies, the executives in Bentonville, Ark., should be asking whether the candidate or party will be good for Wal-Mart's customers.

© 2008