Tag Archives: CostCo

Ending One Area Of Government Interference Into Private Enterprise

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On Sunday, Townhall posted an article about an attempt by Biden-Harris FTC, Chair Lina Khan to prevent manufacturers from giving better prices to companies that bought their products in bulk. She is now the co-chair of Zohran Mamdani’s mayoral transition team. Communism has its rewards.

The article reports:

She loved using a little-known Great Depression law, called the Robinson-Patman Act, to crack down on companies that offered bulk pricing discounts to their customers.

For example, in December 2024, Khan’s agency sued Southern Glazer’s Wine and Spirits, an alcohol distributor, for giving better deals to national chains like Costco, Total Wine, and Kroger while charging independent liquor stores more for the same products.

Then, on January 17, 2025 — just days before President Trump’s inauguration — her FTC filed a similar suit against PepsiCo over promotional terms that she claimed favored Walmart and other giants over smaller grocers.

These companies weren’t raising prices; they were lowering them. But they still got sued by Biden’s administration through the Robinson-Patman Act.

Robinson-Patman wasn’t written to stop companies from competing on price. That, after all, is the entire point of free enterprise. The act was written to stop companies with real market power from rigging prices with the intention of squeezing out competitors unfairly.

Yet neither of these two Biden administration Robinson-Patman Act cases pointed to a single direct harm consumers faced from this price-cutting.

At the time, then-Commissioner Ferguson called this egregious Biden abuse of power out for what it was. In his January 2025 dissent on the PepsiCo case, he labeled the filing “purely political,” accusing the outgoing Democratic majority of “march[ing] staff into court with no evidence to support the most important allegations in the Complaint.” He called it an “insult to the Commission’s credibility, its hardworking and talented staff,” and “a waste of taxpayer dollars.”

Ferguson was right on target — and when he took the FTC’s reins from Khan once Trump was sworn into office, he dismissed the PepsiCo case.

The article concludes:

Which raises the question: How could the Biden team be so tone-deaf in filing these cases?

Perhaps they have never done their own grocery shopping and thus didn’t understand how we all shop or what we prioritize.

Or — and I fear this might be more likely — perhaps they know exactly what we all do, but they didn’t take that into consideration when filing the cases, because shaping the world to more closely resemble their progressive, anti-capitalist worldview was more important to them than protecting consumer welfare.

Maybe the Biden holdovers tried to take away your Costco deals because they truly hate capitalist business efficiency that much. But Chair Ferguson and the rest of the Trump administration are making sure they won’t succeed. 

If that’s not grounds for a free lifetime Costco membership, then I don’t know what is.

This is very real example of the reason elections matter.

Walmart and Tariffs

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President Trump announced his tariff plan yesterday. Generally speaking, liberals are crying, “The sky is falling.” The stock market is down today, but will probably be back up in a week or so after the impact of the tariffs is calculated. One indication of how things might go is what is happening with Walmart.

A friend of mine summed it up:

“U.S. retailing giant Walmart,” Reuters reported, “is continuing to push Chinese suppliers to cut prices to offset President Donald Trump’s tariffs.” In other words, to stay competitive, foreign governments must cut their prices, to stay competitive. They must cut prices to precisely offset the tariffs. That is why foreign suppliers actually pay for tariffs, and not Americans.

To put it differently, it is true the tariff is charged at the port of entry. But if Chinese factories want to keep selling here, they must lower their prices to absorb the hit, because consumers won’t pay. Foreign producers indirectly pay the tariff through lowered prices, or they lose market share.

It’s that simple.

Here’s how it works in real life: If a Chinese plasma TV costs $1,000 and there’s a 10% tariff, the U.S. government collects $100. Walmart tells the Chinese supplier, “We’re not eating that cost. Cut your price to $900 or we’ll stop buying.” So the Chinese factory promptly cuts its price to stay in business.

The result is that the U.S. Treasury gets paid, Chinese exporters take the loss, and American consumers barely notice.

On Wednesday, Yahoo Finance reported:

Walmart is reportedly standing firm in its demands that Chinese suppliers absorb the costs of U.S. tariffs.

Bloomberg, citing sources with knowledge of the situation, said Walmart (WMT) is asking suppliers to reduce prices by up to 10% for every new round of tariffs, effectively shifting the financial burden onto manufacturers. Last month, Chinese officials met with Walmart executives to discuss the request, calling it irresponsible and unfair. Despite this, Walmart appears unfazed and has doubled down on its demands.

…Walmart isn’t alone in pushing suppliers to absorb some of the tariff costs. Other major retailers, including Target and Costco, are following suit. Target (TGT), for instance, asked a supplier of hairpins and claw clips to take on “half the costs of the tariffs.” The supplier said the failed negotiation led to delayed orders, eventually losing the business. Target has not responded to Quartz’s multiple requests for comment.

Tariffs are a very efficient way to deal with uneven trade practices and with import/export imbalances.

 

We Have Reached Peak Ridiculousness

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On November 11th, Breitbart posted an article about a recent recall by the Food and Drug Administration.

The article reports:

The U.S. Food and Drug Administration (FDA) ordered the recall of nearly 80,000 pounds of butter produced in Texas for Costco. The agency ordered the recall because the product packaging contained no “Contains Milk” allergy statement.

Food & Wine reported that the FDA issued a Class II recall on November 7 for 79,200 pounds of Kirkland Signature Sweet Cream Butter (salted and unsalted). The FDA claimed the butter packaging lists “cream” as an ingredient but does not bear the “Contains Milk” allergy statement.

The American Heritage Dictionary defines butter as follows:

People who are allergic to milk are generally allergic to cream. People who are allergic to milk have probably learned to read labels in order to avoid setting off their milk allergy.

The article includes some interesting screen shots:

As someone who is lactose intolerant (someone who has problems digesting milk), I think this is the dumbest recall ever. People who have the problem have learned to read labels.

What Results Look Like

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During the final weeks of the mid-term election campaign, you will hear Democrats say, “The tax cuts were only for the rich–they didn’t help anyone else.” A misinformed friend of mine posted that on Facebook recently. So let’s look at the facts.

The Conservative Treehouse posted an article yesterday about the impact of the Trump Tax Cuts on average Americans.

The article quotes a Business Insider article that reports the following:

  • Walgreens Boots Alliance announced that it will make investments around $150 million to boost mainly its in-store wages in fiscal 2019 in the light of favorable tax reforms.
  • Walgreens CFO said Thursday that the increase in store wages was “in light of the favorable tax reforms in the US.”

…The pharmacy-chain owner Walgreens Boots Alliance announced Thursday that it will make investments of about $150 million to boost mainly its in-store wages in fiscal 2019 in wake of  President Donald Trump’s tax reforms.

The announcement marks a 50% increase in company’s investment towards wages which was announced in March. At the time, Walgreens said it would invest around $100 million per annum to increase wages beginning later this calendar year.

“We will be making select incremental investments of around $150 million in fiscal 2019, mainly in store wages, but also to fuel our new community health care initiatives, and you can view these in light of the favorable tax reforms in the US,” Walgreens CFO James Kehoe said Thursday, on the company’s fourth-quarter earnings call. 

The article at Business Insider explains how the tax cuts have impacted the average worker:

In December 2017,  the Trump administration slashed the federal corporate tax rate from 35% to 21% and allowed a one-time repatriation of overseas cash. The bill also allows companies to bring overseas profits back home to invest in domestic projects or repurchase of shares.

Kehoe said the investments will result in a headwind of approximately $0.12 a share, or two percentage points of earnings-per-share growth for the coming fiscal year. 

US retailers are scrambling to keep workers as they look for opportunities with higher pay and attractive benefits. The US unemployment rate fell to a 48-year low of 3.7% in September. According to the Bureau of Labour statistics, there were 757,000 retail-job openings across the United States in July, which is about 100,000 more than a year ago.

The surge in the number of retail jobs has allowed workers the opportunity to move around within the industry. As a result, companies are raising wages to try and retain workers. Earlier this month, Amazon hiked its minimum wage to $15 per hour, effective November 1. That followed wage hikes from places like Target and Costco. 

That is significant.

The Conservative Treehouse concludes:

Back in January 2017 Deutsche Bank began thinking about it, applying new models, trying to conceptualize and quantify MAGAnomics, and trying to walk out the potential ramifications.  They began talking about Trump doubling the U.S. GDP growth rate when all U.S. investment groups couldn’t yet fathom the possibility.

It’s like waking up on Christmas morning every day to see the pontificating Fed struggling to quantify analysis of their surrounding reality based on flawed assumptions. They simply have no understanding of what happens within the new dimension.

Monetary policy, Fed control over the economy, is disconnected and will stay that way for approximately another 12-14 months, until Main Street regains full operational strength –and– economic parity is achieved.

As we have continued to share, CTH believes the paycheck-to-paycheck working middle-class are going to see a considerable rise in wages and standard of living.  How high can wages rise?… that depends on the pressure; and right now the pressure is massive.  I’m not going to dismiss the possibility we could see double digit increases in year-over-year wage growth in multiple economic sectors in several regions of the U.S.

Remember, as wages and benefits increase – millions of people are coming back into the labor market to take advantage of the income opportunities.  The statistics on the invisible workforce varies, but there are millions of people taking on new jobs in this economy and the participation rate is growing.

Winnamins.  We’ll need lots of them…

Wow.

 

Why Taxing The Rich At Even A Hundred Percent Doesn’t Increase Revenue

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Yesterday’s Wall Street Journal reported that Jim Sinegal, head of CostCo and one of President Obama’s strongest supporters during the 2012 election, has taken steps to avoid the coming taxes that will impact the ‘rich.’

The article reports:

Specifically, the giant retailer announced Wednesday that the company will pay a special dividend of $7 a share this month. That’s a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year’s rate of up to 43.4%—an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge.

More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they’re taking on debt to do so.

Like it or not, this is a sound business decision. It is also representative of what companies around the country are doing as this year comes to a close.

The article concludes:

As it happens, one of those new stores opened Thursday in Washington, D.C., and no less a political star than Joe Biden stopped by to join Mr. Sinegal and pose for photos as he did some Christmas shopping. It’s nice to have friends in high places. We don’t know if Mr. Biden is a Costco shareholder, but if he wants to get in on the special dividend there’s still time before his confiscatory tax policy hits. The dividend is payable on December 18 to holders of record on December 10.

To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time.

If they had any shame, they’d send their entire windfall to the Treasury.

It will be the middle class that pays for President Obama’s taxes on the ‘rich.’ The rich have the accountants to avoid those taxes.

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