July 17, 2015 By Nicole Desautels
WISCONSIN — Scott Walker delighted the suburbanite crowd with his folksy, oft-repeated (even Jimmy Fallon had fun with it) “Kohl’s Curve” speech during his presidential campaign kick-off event at the Waukesha Expo Center on Monday. If this president thing doesn’t pan out for him, he has a bright future ahead of him selling Croft & Barrow shirts at Kohl’s Department Store in Brookfield (hey, they pay their sales associates a whopping $8.70/hr.).
Walker was on fire Monday evening — perspiring, gesturing, and throwing his whole body into the story as he described how he and his wife, Tonette, shop for deals at Kohl’s:
“Over the years, I’ve learned if I’m going to go buy a shirt, I go to that rack that says it’s $29.99… and now it’s $19.99. And then we go up to the cash register and we get out the insert from the Sunday newspaper, you know, the little scratch-off one there, or maybe we get the flyer we got back at home, right?… where you get 15 or 20, or if you’re really lucky, you get 30% off, right? You know what I’m talkin’ about.”
The crowd erupts into orgiastic approval. They know exactly what he’s talking about.
“And then as the clerk is ringing it up, Tonette scoops into her purse and pulls out some of that ‘Kohl’s Cash’… and the next thing you know, THEY’RE paying ME to buy the shirt!”
“So how does a great company like Kohl’s make money? They make it off of volume, right?… See, they can charge that higher price to the few of you WHO COULD AFFORD IT, but they lower the price, broaden the base, and they make more money off of volume.
“That’s what I think about your money… the taxpayers’ money. See, the government could charge you a higher rate, and some of us COULD AFFORD IT, but if you lower the rate, broaden the base, we expand the volume of people who can participate in the economy.
“Years ago, we used to call that… a similar plan — a successful one under President Ronald Reagan — back then we used to call it the ‘Laffer Curve.’ Today, I call it the ‘Kohl’s Curve,’ because I believe you can spend your money far better than the federal government… and when you do, the economy will get a whole lot better.”
The only problem is, Walker’s “Kohl’s Curve” analogy makes no earthly sense.
But that didn’t matter to the crowd of “hardworking taxpayers” (code for wealthy, white Walker supporters) who showed up to the small venue to anoint Him their Chosen One. (Don’t forget, God consecrated him.) They were captivated.
Come to think of it, Walker’s pitch almost sounded like he was promoting the Affordable Care Act — which broadens access to health care so even low-wage earners can participate in it. Except in Walker’s scenario — where he “expands the volume of people who can participate in the economy” — the “opportunity” he’s giving those low-wage earners is to pay higher taxes, which in turn funds tax breaks to the wealthy, who can (as Walker himself points out) actually afford to pay their fair share of taxes.
So what is Walker getting at with his “cheap shirt” analogy? How does one break it down? For help I turned to my friends, Timothy, Sue, and Ryan:
Timothy R.: “There is no proper analogy between Walker’s tax policies and Kohl’s retail sales methods. His is a tax policy that favors only the rich at the expense of the many. It is not the same as a discount retailer offering a shirt at a price that even those suffering in Walker’s economy can afford. Although the analogy fails, and is, frankly, nonsense, the Laffer Curve he references is simply another term for ‘trickle down’ economics, the ‘all for the rich and none for the rest’ economic theory so beloved by the Republican Party since the days of Reagan. It is the very economic policy practiced by George W. that nearly led to a second worldwide depression. Walker’s adherence to these policies has yielded large deficits, low wages, defunding of public education and environmental protections, the worst job growth in the Midwest, and a disappearing middle class.”
Sue B.: “The plan is nonsensical, and Walker gives no clue as to how it would work outside of a retail setting. It’s all catchphrases and happy talk designed to appeal to the wealthy suburbanites who make up his base. Let’s put aside the fact that Walker, who has been in political office his entire adult life, has no idea how the retail business works — the shopping deal he describes is a ‘loss leader’, something the store uses to get people into the store and spend money on other things along with the spectacular bargain. A ‘great company like Kohl’s’ does not ‘make money’ by selling only loss leaders.
“His analogy seems to be that you grow the economy by having a significant portion of the population working at the bottom — the base he wants to broaden. Many people are too poor to pay taxes (Republicans often criticize this population as not having “skin in the game”), and rather than being concerned that people aren’t making enough money, Walker sees the problem as their not paying taxes. He admits the rich could pay more on shirts and in taxes, but why should they? He wants a regressive flat tax (or maybe no tax — it’s not clear what his point is). That he uses Kohl’s loss leaders as a model for tax policy shows how little he understands business or economics. This model would not work for a business — no business can survive if all it sells are loss leaders — and it does not work for an economy. Wisconsin has seen this sort of austerity economics play out to disastrous effect. Taxes on people in upper income brackets have been cut while taxes for people at the bottom have been effectively raised by the elimination of various credits and programs. This has helped send Wisconsin to the lower realms in economic indicators, including stagnating wages and the greatest decline of middle-class incomes of any state.“
Ryan W.: “Interesting that in Walker’s mumbo jumbo breakdown of Friedmanomics 101, he makes a terrible analogy of how lowering a fixed price on a shirt (equivalent of a regressive tax like sales tax where everyone pays the same price, regardless of income or ability to pay) so more of us can afford it is somehow the equivalent of lowering income tax rates (progressive tax where everyone pays percentages of income based on ability to pay). And yet, while the practical Kohl’s portion of that nonsensical analogy could loosely be considered to be making a case for tax fairness by limiting regressive taxes and maintaining progressive taxes that we can all afford, the dude wants to eliminate income tax and send the poor-fucking sales tax skyrocketing. Economically absurd…ideologically tasty.”
How can Walker be both FOR and AGAINST sweatshop labor?
Midway through his hour-long “I’m running for president” announcement, just moments after he’s seen bobbing his head and patting himself on the back for being savvy enough to know how to buy cheap shirts with Kohl’s Cash, Walker is onto railing against China for its abysmal human rights record.
“We need to stop China’s cyber attacks, stop their territorial expansion into international waters and speak out about their abysmal human rights record.”
But where does Walker think those cheap Kohl’s shirts are manufactured? Kohl’s earned a D+ on a Retailer Scorecard put out by Green America, an organization that tracks sweatshop abuse. And it’s not just human rights China has a problem with, it’s animal rights. Kohl’s was caught last year selling coats lined in real animal fur. “Raccoon dog fur, the animal used in Kohl’s parka, is generally low quality and is actually cheaper than the fake material. The breed is also often skinned alive for its fur.”
And what about this “Kohl’s Cash”?
In Walker’s story, “Kohl’s Cash” is the equivalent of coupons to billionaire donors redeemable for tax breaks (spend $50 at Kohl’s, get $10 in Kohl’s Cash). For example, Jon Menard, who has reportedly donated more than $1.5 million to Walker through the Wisconsin Club for Growth PAC, was awarded “up to $1.8 million in special tax credits” by the Wisconsin Economic Development Corporation (WEDC), a quasi-public-private entity headed by Walker. Kohl’s has also been the recipient of some of Walker’s WEDC “cash giveaways to billionaires.” As was reported in the Chippewa Herald, “In July 2012, Kohl’s Department Stores secured up to $62.5 million in state tax credits to keep its headquarters in Menomonee Falls. Three weeks later, the company began threatening layoffs, according to the U.S. Labor Department. Then in August 2013, the company notified the federal government it would be cutting 67 jobs and outsourcing its Milwaukee-based accounts payable and sales audit functions to India.”
Although Walker’s die-hard fans may have thought he hit his “Curve” ball out of the park on Monday, this illustrates that under even the most modest scrutiny, his entire economic analogy/argument fails miserably. They are being hornswoggled.
Somewhere in a Brookfield strip mall parking lot there’s a stall with Walker’s name on it.