Obama vs. Romney: How Costco, Staples and Walmart Are Voting
For years, Barack Obama's critics have positioned him as the scourge of big business, claiming that the he has excessively regulated Wall Street, tried to unfairly raise taxes on corporations, and generally undermined the foundations of capitalism with a collection of ill-conceived, "socialist" policies. Last week, however, the co-founder of one of America's biggest companies offered a rebuttal to the Obama-as-villain argument, arguing that the President's economic policies offer a roadmap for long-term growth and stability.
Last Wednesday night, Jim Sinegal, co-founder of Costco, took to the floor at the Democratic National Convention. While not as well-known as Michelle Obama or Joe Biden, Sinegal's position as a captain of industry put him in an ideal position to rebut the attacks on Obama's economic policies.
Job Creators and Entry-Level Workers
Sinegal began by referencing a popular Republican touchstone: job creators. Pointing out that Costco (COST) has created 116,000 American jobs and plans to create another 7,000 within the next year, he carefully positioned his company as a force for sustainable job creation -- and, consequently, an expansion of the middle class. Citing Costco's relatively high wages and impressive benefits for the retail industry, he argued that "we're not just giving Costco people jobs, we're empowering them to build careers and support middle-class families."
This notion that companies should be concerned with the economic stability of their lower-level employees flies in the face of conventional wisdom: last year, the average CEO made 380 times as much money as the average worker. Similarly, Sinegal's dismissal of executives who focus on short-term profit laid the groundwork for a defense of Obama's economic planning. "At [Costco], we recognize that job creation requires time and investment and commitment to the long term," Sinegal told the DNC audience. "It requires companies that plant and grow, not executives who reap and run."
As for business-friendly policies that could encourage long-term growth, Sinegal's investment suggestions read like an Obama wish-list. Noting the need for investment in education, transportation, and sustainable energy, he pointed out that "these are the investments that businesses want. These are the building blocks of President Obama's plan for the future. And that's why I'm proud to stand with him."
Staples Sticks It to Obama
Sinegal's speech was a clear rebuttal to last week's RNC address by Tom Stemberg, co-founder of Staples (SPLS). Like Sinegal, Stemberg was quick to establish his company's position as a job creator, noting that Staples employs "nearly 90,000" people, and "helps entrepreneurs and small businesses get started on their own."
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But while Stemberg noted Staples' benefit to other entrepreneurs, his real focus was on his own company's story, and on Mitt Romney's part in its success. Stemberg painted the former business consultant and private investor as a man who "really got excited at the idea of saving a few cents on paper clips," and was involved with Staples almost from the beginning. Drawing a distinction with Obama, Stemberg asked the audience, "Who would make a better president: Someone who knows how to save a dollar on pens and paper or someone who knows how to waste $535 million on Solyndra?"
Clever budgeting aside, Romney's business experience has been a mixed blessing on the campaign trail. On the one hand, it has given him a great deal of experience with managing companies. At the same time, however, Bain Capital's many decisions to shutter factories has sometimes placed Romney in an uncomfortable position when he discusses his plans to build American businesses.
Stemberg hearkened back to Romney's experience as a business builder, noting that Bain Capital worked for five years with Bright Horizons Day Care, a company that now "employs over 19,000 people," and Steel Dynamics, which "employs 6,000 people." Ultimately, Stemberg argued, Democrats "don't get it because they don't believe in the spirit of the entrepreneur. They don't understand what it means to risk money to create something new."
Walmart Weighs In
While the founders of Costco and Staples both offered interesting angles on the presidential candidates, the biggest retail influence in this election season may come from a company whose owners have largely remained mum. The Walton family, owners of Walmart (WMT), have eschewed public statements in favor of private contributions.
In addition to significant contributions to a variety of Republican congressional campaigns, the Walton heirs have lined up behind Mitt Romney. Jim Walton, chairman of Arvest Bank and son of Walmart founder Sam Walton, has given $200,000 to Mitt Romney's PAC, Restore Our Future, and $2,500 -- the maximum allowable direct contribution -- to Romney's campaign. His sister, Alice Walton, has done the same.
It isn't hard to see why a Romney presidency would be attractive to the Waltons. The former Massachusetts governor has proposed abolishing the estate tax, which is currently pegged at 35% but will rise to 55% in 2013. Moreover, he has suggested maintaining the current 15% capital gains and dividend tax rates; Obama, on the other hand, has proposed raising both to 20%-35%.
As a family, the Waltons are worth an estimated $60 billion -- more than the bottom 41.5% of all American families combined. Christy Walton, the youngest of the bunch, was born in 1955, and it seems likely that all six are contemplating the eventual need for estate planning. Based on the estate tax alone, a Romney presidency could save them billions -- an amazing return on their relatively modest $405,000 investment.
Bruce Watson is a senior features writer for DailyFinance. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.
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