Wal-Mart Boss Talks Sustainability, Congress Talks Pay Caps

Less than two weeks after the transition in Washington D.C., there’s been another leadership transition and a new boss for an enormous economy. That is, Wal-Mart Stores Inc. got a new CEO, Mike Duke, on Sunday. Duke, a Georgia native, has been with Wal-Mart since 1995, and before that spent nearly a quarter-century with Federated Department Stores and May Department Stores.As Wal-Mart goes, so goes the retail business. Last week, Duke told a meeting of Wal-Mart employees, in a presentation that was also webcast, that “sustainability is now even more critical than ever… eliminating waste is more important than ever, reducing energy consumption is more important than ever. Being more efficient is more important than ever because it’s important to our customers.”Among other specific goals recently announced by the retail behemoth, the company says it will reduce phosphates in laundry and dish detergents in the Americas region by 70 percent by 2011 and also reduce packaging by 5 percent in the same region by 2013. The Americas region of Wal-Mart has about 2,300 stores in 10 markets. Other initiatives the company is pursuing worldwide include the installation of solar panels — over 1,000 panels, for example, in a single store in Mexico to generate 20 percent of the store’s energy needs — and its purchases of wind energy.Just in time for the weekend, the U.S. Department of Commerce let the country know that it’s the early ’80s all over again, at least in terms of the gross domestic product, The U.S. GDP was down 3.8 percent annualized rate in the fourth quarter of 2008. That was short of the 5 percent that many economists had predicted, but still was the worst quarter since the first quarter of 1982, when the economy suffered an annualized 6.4 percent contraction.In his weekly radio and Internet address on Saturday, President Obama acknowledged these dismal numbers, and took another slap at Wall Street as well: “We learned this week that even as they petitioned for taxpayer assistance, Wall Street firms shamefully paid out nearly $20 billion in bonuses for 2008. While I’m committed to doing what it takes to maintain the flow of credit, the American people will not excuse or tolerate such arrogance and greed. The road to recovery demands that we all act responsibly…”Sen. Claire McCaskill (D.-Mo.) is going one better by proposing a $400,000 pay cap for execs of companies receiving federal bailouts (which just happens to be the salary of the President of the United States at this time). Since it’s likely that no companies would take federal money under such terms, Sen. McCaskill is probably grandstanding on the issue. But what better way to get attention than to hit that particular hot button?The recent excesses in executive pay are a familiar part of any economic bubble, said Michael C. Aronstein, portfolio manager of the Marketfield Fund, to a packed luncheon audience in downtown Chicago on Friday, an event organized by Chicago-based Lake Effect Communications L.L.C. “If managers can’t demonstrate some moderation in their lives and lifestyles, their companies aren’t going to come to a good end when the bubble bursts,” he said. “Private airplanes, palatial mansions, huge headquarters buildings — it never fails that they appear toward the peak of a cycle, and they’re indications that an organization has a distorted view of itself.”Aronstein is, however, guardedly optimistic that credit markets in the United States and Europe are beginning to thaw. But going forward, business plans have to no long assume “an limitless supply” of cheap credit.”That model is invalid throughout the economy, including homebuilding and commercial real estate,” he told CPN. “But the healing process for the economy, and the creation of new business models not dependent on limitless cheap credit, is going to take time.”