business news in context, analysis with attitude

We had a story last week about a new shopping cart being tested that has two video screens - one for the child, playing entertainment programs to keep him or her occupied, and one for the shopper, with commercials for various products. Which led one MNB user to write:

Must we always be sticking kids in front of a TV so they will stay quiet and not “bother” us? My child is not without his screen time, of course, but the most fun he’s ever had at our local grocery store is pushing around one of those child-size carts and helping me shop, and he loves the car carts even without a video screen installed. Michael Sansolo wondered a while back about the class to teach your kid to tie his/her shoes. It’s because parents today don’t have the patience to actually parent.

We also had a story about a kiosk being developed that uses facial recognition software to make product and meal recommendations. MNB user Nicole Vuletich responded:

I don’t know what type of technology they use for this or what the determining factor is in deciding a meal choice judging a book by its cover, but I’m almost afraid to hear consumer opinions of what meal choices they are presented with, especially touching on people with weight or body issues. It’s clever, but presents a good possibility of consumer backlash.

Good point. If a human being were to do this at an airport, we’d call it profiling. But if a machine does it at the supermarket, it’s called marketing.

MNB user Debra Botterill wrote in with an anecdote about online shopping:

I've been a loyal Amazon customer for years. I still remember my first year with Amazon when they sent me a coffee mug as a thank you gift. The reviews, the selection, and now with Amazon Prime, the fast shipping. Between my Kindle, and Amazon, I only visit a bricks and mortar bookstore to maybe seek out new titles for consideration when I have time to kill. Stepped into a Barnes & Noble yesterday and bought a book. Felt really, really strange. Why you ask? The title I wanted was on wait list at Amazon and.......I just couldn't wait.

Also about Amazon, one MNB user wrote:

No doubt that Amazon is rapidly becoming the 900 pound gorilla. The proliferation of smart phones pretty much guarantees that they will have an expanding shopper base. But they have a vulnerability in that two of their major advantages...price and free shipping are tax payer subsidized. Every time they take a sale from the mall store or a Walmart, there is revenue that the state and municipal government doesn’t get. Which means that tax payers have to cover the difference to pay for the exploding pension and medical expenses. Secondly, I believe that most of their “ no shipping charge” volume goes through the US Post Office. Tax payers covered the over $8 billion loss the USPS generated last year.

Given the hue and cry about people being denied their government sponsored freebies due to revenue short falls, I imagine it may dawn on pols that they should pull these subsidies. I assume that the Amazon lobbyists will be very busy over the next several years.

I’m not sure I agree with the crack about “government sponsored freebies.” Would garbage collection fall into that category? Or a superb public school education? Or bridges that don’t fall down, or mass transit systems that are world-class?

That said, I get your point. My opinion on this issue has actually evolved over the years, and I no longer think that online shopping should be allowed to avoid sales taxes - it isn’t fair to brick and mortar stores, and does amount to a government subsidy where one is no longer needed.

And, I’m absolutely convinced that it will have little or no impact on my Amazon shopping habits.

I’m often critical of traditional bookstores, which led one MNB user to write:

Kevin, what do you recommend Barnes and Noble and their ilk (brick and mortar book stores/coffee shop/social gathering milieus) do?  They’re not quite obsolete, but clearly waning in their relevance.  You seem to berate their collective management and its lack of foresight, acumen, innovation, etc.. But really what to do?   As someone who is not from a book-selling background, I wonder where they went wrong, and apart from the over-simplistic observation that they didn’t evolve, if their decline was inevitable… and if it was, if there’s anything wrong with that ... I have a vague notion that these ailing bookstores merit a place in our towns, high streets and malls.  Is it inevitable that they’re going to go the way of the record store (or any number of now defunct formats) or is it preventable?  And if preventable, how?  I’d like to imagine a time when they might thrive again, and I’m rooting for Barnes and Noble and their like.

MNB user Guy Wheeler wrote:

I have been interested in buying Edmund Morris's 3rd Roosevelt volume. I checked Amazon and Borders on line - both 40% off.

I called one of the local stores that is closing (with signs "everything must go"). This store's offer, after checking twice was 20% off.


Maybe it's more than keeping up with changing customers' needs.

Guess who I ordered the book from.

I think there will always be room for the physical bookstore that connects in fundamental and innovative ways with their communities, and that serve both writers and readers. How to do that? I have no idea ... one of the advantages of being a pundit is that sometimes you get to be critical without having an actual answer. (There are a lot more problems that I don’t know how to solve than problems that I do know how to fix.)

I do know this. When Michael Sansolo and I wrote our book, getting it into brick-and-mortar bookstores was a nightmare because our names were not Dan Brown or Sarah Palin. That was not a problem with Amazon ... and we scored ourselves a nice little success almost completely via Amazon and MNB.

We had a number of emails last week reacting to Wegmans’ decision to freeze prices on 40 highly popular, primarily private label products for all of 2011 ... and some of them were even a little cynical about the company’s motives.

Which prompted one MNB user to write:

I’m not trying to be an apologist for Wegmans, but the people commenting...don’t seem to have watched Wegmans strategy shift over the last, oh eleven years?  To suggest “Wegman’s (sic) has finally brought an economist’s tool to the table” is assuming Wegmans compete in a vacuum, and/or they have this Karl Marx scheming the commodity marketplace.  Folks, if the prices go up, Wegmans has put a stake in the ground that their private label will stay where it is.  Is it marketing?  Sure, in the sense that they are furthering to communicate their message of (for lack of a better phrase) the nuttiness of high/low food merchandising.  If prices go down (as the writer suggesting excess profits) then I’m sure you’d see Wegmans react by lowering their prices to reflect lower input costs.  They won’t be able to say “hey, a deal is a deal”, and it’s not like they don’t have competition!

What makes Wegmans great understand the needs of their customers and working to deliver on those needs.  Sometimes it entails great prepared food, and sometimes it’s pricing.  Customers don’t like buying Orange juice one day at $4.49, only to come back a day later and see it 2/$4.00.  People want to buy it when they need it and not be penalized because they have poor timing.  People lead busy lives.  It’s one less thing to worry about. The Wegmans program is just a natural evolution from “everyday low prices”, through “Consistent low prices” to now, locked in for 2011.  They are smart.  Why suggest they are copying you or are trying to fool people with what appears to be a good move?

We had a story last week about calls by the Center for Science in the Public Interest (CSPI) for the banning of the caramel coloring used in soft drinks because of allegations that it is a carcinogen. The American Beverage Association said there's no evidence the chemicals cause cancer in humans, and called the petition "nothing more than another attempt to scare consumers by an advocacy group long-dedicated to attacking the food and beverage industry." And the Grocery Manufacturers Association (GMA) also released a statement saying that there is no scientific evidence to support the CSPI claims.

Which led one MNB user to write:

Did the ABA plagiarize their retort from the tobacco companies? I certainly don’t know the effects of caramel coloring but CSPI, to my knowledge, does not shoot from the hip.

It does seem like a comment right out of the tobacco company playbook, doesn’t it?

We also got a number of emails responding to last Friday’s “OffBeat,” which addressed the battles in Wisconsin and what I view as some inconsistencies in how we value our educators. I wrote in part, that while I understand the need for economies in tough times, it is not entirely fair to demonize teachers, since the general consensus seems to be that we need better teachers and ought to pay them as if they are the most valuable members of our society.

One MNB user wrote:

I’ll start off by stating that I come from a family of teachers (my mother and 3 of my siblings).  I honestly believe that if teachers had to actually meet performance requirements to sustain their jobs,  like most of the rest of the working world, most people wouldn’t begrudge their pay and benefits.  But everyone has had experiences with bad teachers and cannot understand why they are allowed to go on in their position.   A 2nd grade Teacher at my sons’ school had some of the students massage her bare feet with lotion while she read to the class.  When this was brought to the principals attention nothing happened other than a remark that she would talk to the teacher.  There are scores of teachers out there that just don’t care.  My son had a teacher that never handed out the Scholastic book flyers (where grade school kids can get incredibly cheap books) because it was too much work.  Wouldn’t even do it after parents complained and offered to help.  Rather than encouraging reading she was sending a message to the kids that reading wasn’t important or she just didn’t care about them… so get out of the profession.  But no, they can’t fire her and the pay and benefits for just physically being there are just too good.  Kids be damned.  That’s the impression most Americans have of what the teachers unions have done for our educational system.  This uprising isn’t about all teachers; it’s about the freeloaders and they are everywhere.  Instill a merit based system for teaching jobs and you will bring back the utmost respect in the community that the teaching profession once had.

You’re right about one thing. There are freeloaders everywhere.

And I’ll tell you something else. If my kid had a teacher who insisted that the children massage her feet, and the principal didn’t do something about it on the first phone call, then I’d go to the superintendent, the school board, and eventually the newspapers.

MNB user Craig Espelien wrote:

I have also followed the Wisconsin union issues very closely (full disclosure – I lean towards the conservative and feel, overall, that unions have outlived their usefulness) and I believe there are two separate issues.  One is the “teacher” issues and the overall pay for performance (my wife has been a pre-school teacher for as long as we have been together – 24 years) and has always made sub-standard money and received little to no benefits as most of these jobs are part time – I can not believe how much additional time she puts in to prepare that she does not get paid for and how little most people care about early childhood education (which in other countries has been identified as the most important phase of education).

So – on to the two issues.

First, unions do tend to undermine a meritocracy but more recently have worked closely with management to solve this issue (not speaking directly about teachers but a friend of mine is a union VP and has worked tirelessly to clean up these challenges).  I do not know how to solve this except to restructure the overall employment agreements and remove tenure.  The downside here is that this leaves potentially good teachers vulnerable to the effects of the airport conversation you heard – so something else needs to be instituted to protect teachers from poor parents or the whims of un-engaged parents.

Second, on the money issue, state workers have had a long history of great contracts with superior benefits – which they typically do not pay for (at least relative to the private sector). To the best of my knowledge, over the past 10-15 years the private sector for most larger companies has systematically increased the amount of shared expense for health care (an reduction in total compensation), reduced or eliminated pension programs (or converted them to a less expensive substitute) and frozen wages and minimized performance bonuses.  During this same time frame, state and local workers (and probably Federal as well) have not seen the same reductions – they may not have gotten pay raises but the atmospheric rise in health care costs have been more of a burden to the taxpayer – not to the worker.

The only solution I see for this is to eliminate any government pensions and put everyone on social security (my gut tells me that the only way social security will be fixed by the legislature is to make them a part of it), eliminate the pension programs (there is a process whereby folks who have worked a certain number of years still qualify but newer workers fall into the new plan – most public companies have this style of multiple level programs for workers who have spent various amounts of time with the company) and use the private sector health care model to mirror what they provide.

Tough questions – but the reminder here is that government service was never intended to be a life long career – rather a way station on the road to success and happiness where people “give back”.

MNB user Chris O’Brien wrote:

Really enjoyed your perspective on the Wisconsin labor dispute—definitely one of the more intelligent pieces I’ve read on this. The part that really stuck with me was:

“This subject hit home for me this week when I was waiting for a plane in the Milwaukee airport. A family of four was sitting nearby, and the vitriol about teachers that was coming from the parents’ mouths was startling ... and their kinds were hanging on every word. Pity the poor teacher who, now having been totally undermined, now has to deal with those children in the classroom.”

Regardless of where one stands on collective bargaining rights, undermining those involved in this dispute (especially teachers) can only cause harm to our society in the long run. I would argue that the actions of parents are just as responsible for the problems in our schools, if not more so, than the teachers and unions who are so often blamed.

MNB user Steven Ritchey wrote:

Thank  you for a thoughtful essay on the problems in Wisconsin.  I don’t  profess to know where the problems lie or what the answers are.  I have to think there was a need for the union at some point else the workers,  (teachers, public sector employees ) wouldn’t have organized in the first place.  I also think this kind of thinking is a slippery slope, that once begun can take on a life of it’s own and where does it end.  At what point does educating the kids become an afterthought and simply something you shoehorn into a budget?  In my own educational experience I had some teachers who absolutely, positively had no business in the classroom, I also had some who were gifted educators, who loved teaching and imparting knowledge and were masters of managing a classroom  without ever raising their voices.  I also had a lot of teachers who were good, solid, hard working men and women, not necessarily gifted teachers, but ones who took their jobs seriously and did it the best way they knew how.  At what point do we do away with unions and let employers have their way with employees and not let the employees have any system in place to air grievances.  We had a period like that in the early 20th century, I’m not sure if we would regress to that point, but do we want to take the chance that it would happen?

When I see the legislature making changes to their compensation packages and their benefits packages ,and I mean changes that would cost them money, then I’ll believe they are serious about dealing with budget deficits.

Lastly, for the family  you saw at the airport, the parents speaking about a teacher in the manner they were, shame on them, they are part of the problem, not  part of the solution.  I have to wonder if they are the sort of parents all teachers know about, the ones who’s kids do no wrong, it’s always the teacher’s fault, I don’t know, but I wonder.

Another MNB user wrote:

Thanks for the well thought out piece on what is happening in Wisconsin, Ohio and in the press with regard to teachers unions. I too am married to a dedicated teacher so I do have some “skin in the game”. And yes, I do worry about unfunded pension obligations and just will really be available to my wife when she does retire.

I believe that the NEA and UFT have not served the best interests of individual teachers. Based on the number of solicitations for credit cards and insurance policies coming from the NEA I have concluded that the union exists merely as a channel for collecting addresses for purposes of solicitation. And when coupled with the local (NY area) campaigns attacking Mayor Bloomberg defending teachers, I get incensed, realizing that the dues deducted each check serve as a reservoir for lobbying. So where is the integrity of the teacher being advanced in these activities? 

On the other hand, what is happening in Wisconsin is unconscionable. Depriving a group of their collective bargaining rights by fiat is not dissimilar from confiscatory behaviors of despotic rulers.  I fear that if we allow this type of mob rule we will set all kinds of civil rights back decades. Who will speak out?

Another MNB user wrote:

Having taught at a public university in Wisconsin for 7 years and at a private college there for one year (and, digressing, where I met the woman from Nebraska who, thank God, became my lovely wife and is alive due to a heart transplant, Amen!), I related to your experience recently in that state.  I concur with your thoughts about the rhetoric.

Here in Louisiana the "sacrificial lambs" are higher education and health care, with the governor looking at the knives with glee (I didn't vote for the guy, again digressing).  You are right.  My wife and I, both professors at schools 170 miles apart, are worried about this state.  People and leaders are making short-term decisions without taking the longer view - what will be the impact of cuts on the quality of our young people (school and college aged)?  We worry that our students will only be able to get low-quality jobs and that businesses will choose to not invest in Louisiana by moving here.  Why should they when the workforce is not very well educated, despite what the GPAs may be?

It would be my impression that some of the same people who talk loudest about so-called “American exceptionalism” are also willing to cut back on educational spending. Which strikes me as ironic, at best. And moronic, at worst.
KC's View: