Bloomberg View

Everything about Wal-Mart Stores (WMT) is enormous. Total sales, at $422 billion last year, exceeded the gross domestic product of all but 18 countries. Its 4,300 U.S. stores employ more than 1.4 million people, more than any other U.S. company. So the verdict handed down on June 20 by the U.S. Supreme Court in Wal-Mart v. Dukes was suitably outsized; it decided the largest workplace discrimination case in history. The decision, which was unanimous in one part and split 5-4 along ideological lines in another, was the correct one.

The lawsuit was brought on behalf of every woman who worked for Wal-Mart since late December 1998, more than 1.5 million in all. The female plaintiffs claimed that they had been illegally denied pay and promotions despite a company policy against sex discrimination. The suit relied largely on statistics, which seemed damning enough. Women filled 70 percent of Wal-Mart's hourly jobs, yet made up only 33 percent of management. Women were paid less than men in every region, even when they had higher performance ratings and seniority. The plaintiffs bolstered their case with affidavits detailing the experiences of 120 individuals.

Wal-Mart devastatingly turned the numbers against the plaintiffs. One brief filed on behalf of the women cited U.S. Census Bureau figures showing that U.S. median earnings of women in 2009 were 77 percent of men's earnings. The company pointed out that women at Wal-Mart earned between 85 percent and 95 percent of what male colleagues earned. They actually did better at Wal-Mart than in the country at large.

The Supreme Court, which hadn't reviewed the standards for class actions in 12 years, told the women they didn't have enough in common to sue the company as a monolithic class. As Justice Antonin Scalia wrote for the majority, "Without some glue holding together the alleged reasons" for Wal-Mart's pay and promotion decisions, it was impossible to say that all of the class members suffered the same injury at different stores run by different managers across the nation. Wal-Mart allows local managers wide latitude in wages and promotions.

The plaintiffs can still bring lawsuits individually, and many certainly will. Some may even band together in smaller classes—if they worked at the same store, for example. In the end, what the women were really trying to prove is that Wal-Mart has a corporate culture that favors men. It will be up to other courts to make sure that Wal-Mart doesn't use its size—and decentralized management—to escape legal responsibility. But those cases should be dealt with on their individual merits and unique facts.


On June 6, USA Today led with bad news. "The federal government's financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit," the newspaper wrote.

How so? Well, if you figure in the unfunded or underfunded commitments to Social Security participants, Medicare patients, pensions and health care for government retirees, plus retirement and disability payments for the military, the government's debt increased by $5.3 trillion in 2010. The future debt was $62 trillion as of the first of the year, the newspaper calculated. That's more than four times the official debt ceiling of $14.3 trillion that Democrats and Republicans are quarreling about. And because the government must come to its citizens for money, that works out to more than half a million dollars owed by every household in the country.

In 2009 the Peter G. Peterson Foundation did its own calculation and miraculously reached the same conclusion: The federal government's total projected liabilities, as well as the conventional deficit, was $62 trillion ($62.3 trillion to be exact).

There's an obvious flaw in this reasoning. In a nutshell, this brand of analysis counts future entitlement and pension payments as obligations of the government, and ultimately of private households, but not as assets for the people who benefit from these payments. If a government retiree is entitled to a pension of, say, $35,000 a year, that is both a cost to the government and a benefit to that retiree. But only the cost is taken into account.

That's not the only flaw. For the most part, these sorts of approaches assume that a dollar is a dollar, no matter when it comes in or goes out. But a dollar tomorrow is worth a lot more than a dollar 50 years from now. This is not only because of inflation, but because of the time value of money. A dollar today can be invested, and at 5 percent interest will be worth $11.46 in 50 years. By contrast, the present value today of a dollar 50 years from now (again at 5 percent) is only 8 cents. Much of the $62 trillion that the government supposedly owes is in dollars decades from now. Nevertheless, the $62 trillion figure has made the rounds in the two weeks since it was published.

Trillions have now joined billions as amounts that are part of everyday conversation but impossible to make meaningful. News that you thought your country owed $14.3 trillion but it actually owes $62 trillion has less impact than pulling a $20 bill out of your wallet and discovering that it's only a $10 bill. The notion that you yourself personally owe half a million dollars is simply unreal—it can't be processed.

Given this limitation, throwing around billions and trillions may not be the best way to get people to focus on the deficit. We think there's good reason for alarm, but no reason for exaggerated numbers.

To read Jeffrey Goldberg's interview with Tim Pawlenty and A.A. Gill on Tory Politics, go to

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