Over the weekend, the Wall Street Journal ran an article about the impact that Wal-Mart and other big discounters have on the economy.  Contrary to most articles you’ll see on this topic, this is not another bashing. Eye-opening facts from the article:

• The U S has a $13 trillion economy.  Wal-Mart, Target, and other big discounters combined account for more than $400 billion.
• The Big Five discounters (Wal-Mart, Target, Sears (incl. K-Mart), Kohl’s, and J.C Penney) represent almost as significant a portion of the U. S. economy as does the housing sector—over $600 billion over the last year.

Yes, billion with B. The article goes on to say that "the rapid growth [of big-box retailers] over the past decade or so has kept prices throughout the country lower than they otherwise would have been–not only on plasma TVs and appliances imported from China, but also on basic items such as bananas and breakfast cereal."

As Dan Pink would say, we are living in an Age of Abundance. I saw it over the weekend when I was shopping at Kohl’s and found 800-thread count sheets in the bedding section. Ten years ago, not only would I not have been able to afford such sheets, but I wouldn’t have been able to find them without going to a luxury linens speciality shop in the best part of Manhattan.  That kind of household item was reserved for kings and queens (literally.) Now, I’m able to live like a queen, for the cost of a nice dinner out.

Back to the WSJ article. The amazing part of the article was this quote from Jerry Hausman, an economics professor at the MIT, whose former students include Fed Chairman, Ben Bernanke:

"In a recent study, Prof. Hausman estimated that the advent of Wal-Mart and similar superstores had shaved 0.75 percentage point off annual inflation in food prices in the four years ending 2001. "These guys have done much more than any antipoverty program," he says."

I doubt this will be picked up in the mainstream press. The public likes to have a bad guy in the story. Dan Pink was right.  The markets will rush to the part of the globe that can produce products most efficiently. And according to Professor Hausman, we are better for it.