Citi Analyst Based Walmart Downgrade on Research Funded By Lobbyist Astroturf Group
The day after Citigroup analyst Deborah Weinswig downgraded Walmart stock based on fears that the Employee Free Choice Act would pass, she participated in a private Citi conference call hosted by the Chamber of Commerce. The Huffington Post’s Sam Stein was on the call:
At one point, Weinswig herself engaged the discussion (after mostly moderating questions) by highlighting some anti-EFCA academic material. Citing a study from a Canadian professor, she said that "for every two percentage points gained in union membership through card check and mandatory arbitration, the following year’s unemployment rate is expected to increase by one percentage point, and job creation is predicted to fall by about 1.5 million jobs."
That "Canadian professor" is no doubt Anne Layne-Farrar, whose "research" has been spreading like a yeast infection across right wing media. Chris Kromm at Oxdown punches huge holes in her methodology, nothing that her study was based on a small sampling of three provinces from 1976-1997, a period in which card check law changed three times in one province alone. Moreover, one of those provinces — Newfoundland — has suffered high unemployment due to the boom and bust of oil and fishing industries, which has absolutely nothing to do with card check.
As Chris points out, this "research" was funded by an astroturf group called the "Alliance to Save Main Street Jobs," which includes the American Hotel and Lodging Association, the Associated Builders and Contractors, The International Council of Shopping Centers, the Real Estate Roundtable, the Retail Industry Leaders Association and…wait for it… the U.S. Chamber of Commerce.
So, Weinswig downgraded Walmart stock based on research funded by lobbyists spending tens of millions of dollars to defeat the Employee Free Choice Act, and then participated in a Citi conference call led by a lobbyist from the US Chamber of Commerce with the intent to "build opposition to the Employee Free Choice Act."
Weinswig was raving on CNBC on February 19 about what a superb stock Walmart is at this time for this economy. It’s hard to understand how she reasonably concluded that the stock should be downgraded based on a piece of questionable research financed by lobbying interests and the possibility that a bill might pass in August.