The more impressive strike came, however, earlier this morning, when Citibank downgraded Wal-Mart's stock from a "buy" to a "hold" on fears that passage of EFCA could force the company to unionize which would in turn decrease shareholder profits as more of the company's worth was distributed to employees.
There are two things worth saying on this. The first is that it's a useful moment when the interests of the stock market and the broader economy diverge. Citigroup's analyst is right to worry that shareholders would see smaller gains if Wal-Mart were unionized. Conversely, it would probably be a stimulative thing for the economy if Wal-Mart's massive low wage workforce suddenly enjoyed a quick boost in take-home pay. The interests of shareholders are not the same as the interests of workers, and the various sides in the argument would happily talk your ear off about how the interests of the broader economy align.
The second is that it's hard to recall another time when an analyst actually downgraded a stock on fears of legislation that few expect to pass. Indeed, many on the Left are arguing that this is more about generating a controlled stock market panic that will convince wavering senators to vote against EFCA than about accurately pricing Wal-Mart's stock. "When I see upgrades to the stocks of Wal-Mart's already-unionized competitors (grocery stores like Safeway who will gain back market share if easier unionization results in higher Wal-Mart labor costs) specifically pegged to the specter of EFCA, then I'll admit that Citi is engaged in good-faith prognosticating here," e-mails Josh Bivens at the Economic Policy Institute. "Otherwise, not so much."
This is going to be a fight to the death, one I expect cannot get past the Senate and those self-described Democratic "moderates", whose sole function it seems is to hamstring their party's president and enable the foaming-a- the-mouth rabid dogs of the right, as they have for decades.
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