business news in context, analysis with attitude

On the subject of the continued debate about menu labeling rules, MNB reader Gregg Raffensperger wrote:

I agree with you that transparency is a good thing, however I feel in this case, there is a flaw in this argument.

I doubt that the majority of people eating in fast food restaurants, or restaurants in general, are making their purchase decisions based on calorie content.  “Should I eat the chicken tenders or the cheese burger today….hmmm which has less calories?”  They will not move to a salad.  I guess either one is fine, as long as they have a Diet Coke. 
FDA, please focus on something more meaningful.

From another reader:

Thank you Trump administration. Federal rules mandating that restaurants post calorie counts truly are a waste. First off, the research I've come across seems to show that posting this information does not affect health outcomes.

Second, it costs businesses money and therefore it costs consumers money (maybe providing less to spend on healthy food options or a gym membership).

Third, if consumers want the information it is not hard to imagine health oriented food service outlets posting it (on menus, electronically, # of ways this could take place) and having that trickle down to other outlets (if consumers truly want and feel they can benefit from it).

Fourth, it's easy enough to at least have an idea of what you're consuming with easy access to the internet, calorie counting apps, etc.

Fifth, calorie counts are just one part of the picture...if we require calorie counts on service menus should we also require whether the options are GMO free, full nutrition facts, how the animals were slaughtered, co2 emissions related to the supply chain, etc (it's all information that could help the consumer but there just may not be room for the name of the product).

Lastly, if regulation is the only way to go let's at least have it done on a state or more local level so different methods can be tested and we can see what method if any provides better health outcomes.

And, from MNB reader Bruce Wesbury:

Kevin, Trump is doing what should have been done long ago, get the government out of the way. If you want to label all your products then label them. Do you think your wife Bezos waits around for the government to tell him to do something.

For the record, while I have no problem with federal rules that mandate menu labels because I think such rules would serve the best interests of citizens/consumers, this is not an issue that would be likely to affect my vote one way or the other. While I feel one way, I understand the opposite argument, that companies ought to be able to use such labels as a differential advantage if they choose to ... and think that this is one of those things about which people can agree to disagree, and that there are far more meaningful issues about which the debate should be more intense and where I'd be a lot more willing to be draw the line.

That said ... I have to say that I don't really understand the "your wife Bezos" comment, except that it seems to be your way of trying to demean me and my opinion. That's too bad ... because I have more respect for your opinion than you seem to have for mine.

This kind of crap, which seems to take a lowest common denominator approach to conversation, abandoning any attempt at civil discourse, is one of the reasons that we have such divisions in this country. Why should I take you seriously if this is your definition of reasoned discussion?

On another subject, from MNB reader Jim Veregge:

Hey Kevin, anyone supporting the entire repeal of Dodd-Frank needs to rent or buy the movie The Big Short to remind them of how the financial service industry acted in an era of little regulation or oversight. Some “fine tuning” of some of the regulations is certainly needed, but letting the fox guard the henhouse, as they did prior to the housing crisis and financial services meltdown is certainly NOT the answer….  Also, I’d think most consumers would appreciate keeping or reducing the “swipe fees” financial institutions charge retailers if they really understood the amount of profits financial institutions are raking in at their expense.

There's that great line about how “those who don't know history are doomed to repeat it.”

Which seems about where we are right now on this one.

MNB reader Gil Harmon wrote:

Regarding swipe cap fee - you nailed it with your statement they want to “…make it as opaque a process as possible.”  In a capitalistic society, the system will work as long as everyone has all the information.  So let’s make it as transparent as possible by making it so that retailers can add the credit card/debit fee to the receipt.  Show the consumer what they are paying in credit card fees in order to “earn” double miles.  Take the retailers out of the middle, mandate transparency of the fees directly to consumers, and make banks compete on the balance of miles/rewards versus fees charged.  Maybe then we will see the emergence of a no frills bank that does not give bonus miles, but also does not charge you as much either.

There is a counter argument that it will cause more cash in the system, meaning more handling - more labor, so maybe the retailers can pay part of the fee?  As long as it is transparent, the consumer knows what the true cost is, there should be no argument for taking off the cap.  Maybe then the banks would not be so quick to lobby Congress for what they want.  If only politics were about what is best and not about how to get re-elected.

But, another MNB reader chimed in:

By no means am I an expert on this, but I don’t think you are correct to say that the banks’ strategy is to “screw over consumers and retailers and charge as much as they want, and make it as opaque a process as possible.”  There’s no way that is the end game here.  If fee limits are removed and banks increase swipe fees, it will open the door to competition intent on reducing this cost.  Apple pay, PayPal, and bitcoin come to mind immediately.  Or, if there is true value in the services provided by Visa and MasterCard (and no doubt there is), then consumers will pay for those services, up to a point.  It might not be the best example, but there is no limit on the fees that brokerage firms can charge clients for managing accounts, or accounting firms can charge for tax return prep – there is a wide range of options and it is up to consumers to choose the level of service they want, and pay for that level of service with commensurate fees.  I’m surprised that you are so firmly against eliminating this cap, as it can only lead to more competition – benefiting consumers – in the long run.

Got the following note from MNB reader Tom DeMott:

Kevin, you made the comment below regarding fish from China.

“Which means that consumers - and retailers - need to stand up and do something about it, like doing their level best to never, ever buy or eat seafood from China.”
For your information, millions of pounds of Alaskan Seafood (Cod & Salmon specifically) are caught by US fisherman and shipped for further processing and packaging in China and shipped back to the US. If this option (processing in China) wasn’t available it would negatively impact the economic value of the wild catch in Alaska.
There is a distinction between fish caught by Chinese fisherman and fish caught by Alaskan fisherman. Be careful not to throw the baby out with the bath water.

A fair point ... but since I'm pretty sure that most labels will not make the distinction, and I feel morally obligated to do something, I'm going to have to draw the line. No seafood from China, to the best of my ability.

Finally ... thanks to the many MNB readers who sent me emails congratulating me (and Mrs. Content Guy) on our 34th wedding anniversary.

One of the things I wrote yesterday was that she is an amazingly patient person:

As I write this, I am 3,000 miles away from her and home, and she doesn't mind. She doesn't even mind that we ended up essentially agreeing to give each other appliances for this anniversary, since the washing machine, dryer and dishwasher all crapped out on us in about a 45-day period.

Which prompted the funniest email I got, from MNB reader Mark Boyer:

Maybe she’s hoping that next year her car craps out....
KC's View: