Category Archive 'Business'
24 Feb 2013

Gun Companies Increasingly Refusing to Do Business With Gun-Grabbing Governments

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CNS News

A growing number of firearm and firearm-related companies have stated they will no longer sell items to states, counties, cities and municipalities that restrict their citizens’ rights to own them.

According to The Police Loophole, 34 companies have joined in publicly stating that governments who seek to restrict 2nd Amendment rights will themselves be restricted from purchasing the items they seek to limit or ban.

Hat tip to Theo.

16 Nov 2012

Hostess is Shrugging

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Friday could very well go down in history as the death knell for an 82-year-old Chicago-born American classic snack cake: The Twinkie.

Hostess Brands, Texas-based maker of Twinkies and a number of other snack foods, announced Friday that, on the heels of a nationwide worker strike, it will be going out of business, closing its production plants and laying off the vast majority of its 18,500 employees nationwide. As for the Twinkie brand? It will be going up for sale.

Three of the company’s plants — including one in St. Louis — closed earlier this week as workers went on strike in response to wage cuts and new limitations in worker participation in pension plans. Now, 1,415 workers at the company’s three Illinois bakeries — in Schiller Park, Hodgkins and Peoria — are losing their jobs, the Chicago Sun-Times reports.

16 Jan 2012

Sad Remains of American Industry

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These photographs by Walter Arnold of the derelict Scranton Lace Company were recently linked on a North East Pennsylvania Genealogy list.

Incorporated in 1897, the Scranton Lace Company in its heyday employed 1400 people, and was the world’s largest producer of Nottingham lace. It possessed the largest looms ever built, each of which stood nearly three stories tall, was 50 feet long, and weighed over 20 tons. During World War II, the company expanded its production line to include mosquito and camouflage netting, bomb parachutes, and tarpaulins. After the war, the company returned to producing cotton yarn, vinyl shower curtains, and textile laminates for umbrellas, patio furniture, and pool liners.

Its factory complex boasted “bowling alleys in the basement, a fully staffed infirmary, a staff barber and a gymnasium, and owned its own cotton field and coal mine. Its clock tower was a city landmark. U.S. Sen. Hillary Rodham Clinton’s father and grandfather worked there.”

The Scranton Lace Company closed abruptly in 2002 with an announcement from the company’s vice president, in the middle of the daily work shift, that the company was closing “effective immediately.”

The photo essay is a moving testament to the scale of everything that has been lost as the American economy changed in recent decades to a postindustrial era and manufacturing in most cases moved overseas.

15 Jan 2012

The Saga of Trader Joe’s

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When I was living a few years ago in the Bay Area of Northern California, I often divided shopping expeditions between Draeger’s (a sort of West Coast Zabar’s, a high end butcher shop-cum-gourmet food store) in San Mateo and Trader Joe’s in Foster City.

No matter how little I bought at Draeger’s, I marveled to find that the cash register receipt never came in under $100, while two or even three times the volume of purchases from Trader Joe’s often came in under $40. “These things even out.” I used to assure Karen.

Just the other day, I finally got to a Virginia branch of Trader Joe’s in Centreville. We residents of the real Northern Virginia make a point of avoiding entering the soul-destroying, built-up, suburban areas outside the District, referred to around here as “Occupied Virginia,” but Centerville is just at the edge of the suburban Erebus, and cases of Two-Buck-Chuck (priced on the East Coast at $3.29 a bottle) will definitely justify the occasional expedition.

Los Angeles Magazine has a long feature this week revealing the mysterious origins of the Counter-Culture’s favorite grocery store (which even some of us conservatives like).

Coulombe guessed he had less than a few years to think up a concept that could compete. Luckily, he was an avid magazine reader. In Scientific American he learned that a new class of overeducated, underpaid adults was being produced by the burgeoning college system. Sophisticated shoppers were not necessarily wealthy shoppers, Coulombe theorized; they were educated buyers trapped in economic stasis. He decided to mate the convenience store with the liquor store, and that was Trader Joe’s, “Phase I.” His customers would be the classical musician, the journalist, the teacher, the young doctor. In a different article Coulombe read that the more education a person had, the more they drank, so he stocked 70 bourbons and about 100 scotches. (“I had penciled out what a union journeyman made to figure what I would pay my employees,” he says, “and adding liquor was the easiest way to fund those wages.”) Coulombe read about a jet known as the 747 that promised inexpensive air travel to Europe; Trader Joe’s would need to broaden its tastes to match the new traveler. In another magazine Coulombe discovered that the earth’s biosphere was threatened. Overnight, he says, he became a self-professed “Green” and spliced the health food store and the gourmet store onto Trader Joe’s. This was “Phase II” of Coulombe’s company.

Finally, Coulombe gave Trader Joe’s something most grocery chains didn’t have: a personality. It would have its own take on the world—cultivated but casual, spontaneous, moderately liberal, and smart. When you walked into a Trader Joe’s, you would know the store’s tone and its attitude. The personality that Coulombe conceived remains to this day the company’s voice: The Fearless Flyer.

Coulombe continued to tinker with Trader Joe’s. In 1972, he devised what he calls “Trader Joe’s, Phase III.” At that time the trend in grocery merchandising was bigger. Throughout the ’70s, supermarkets were headed toward becoming the 40,000-square-foot behemoths of today that can carry 50,000 items. Yet such steroidal markets would encounter drawbacks to their muscled dimensions. Eighty percent of supermarket shopping time is spent moving from product to product. Half of all store trips are for five purchases or less, and customers on such trips aren’t searching for sale items—price does not alter the behavior of someone looking for only a handful of things. What did this mean for supermarkets? As their floor plans expanded, their sales volume per square foot shrank. They were forced to invent new schemes to compensate for lost profits, charging fees to manufacturers for store placement and “floating” cash (earning bank interest on the daily take).

So once again Coulombe thought small. Instead of 50,000 shelved items, he would drop his number from 6,000 to 1,000. If supermarkets sold 20 kinds of cat food and 40 detergents, he would sell one of each. In doing so, Coulombe maximized the velocity of dollars entering his registers. Shoppers moving 5 feet between purchases instead of 50 pass through a store more quickly, leaving more cash behind. The average supermarket brings in $10 million to $30 million annually in sales. A Trader Joe’s one-fifth the size of a supermarket can make $1 million in a week’s time. Square foot for square foot, that Trader Joe’s outperforms an average Walmart, which would have to do $30 million in business to match it during the same period.

“I took her down to the rocker arms,” says Coulombe, describing the work he did in the late ’70s. “That’s the Trader Joe’s you know today.”

02 Jan 2012

Movie Theaters: A Dying Industry

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Two boys debate attending the American Theater in Greenpoint, Brooklyn in 1938.

Roger Ebert explains why movie theater revenues are in free fall. Only blockbuster movies are currently keeping the whole system afloat.

I guess that’s just how things work.

You have the movie theater business, an industry whose pioneer days were a century ago. That business prospered and bloomed, but for decades now what was once a luxurious escape experience has been subjected to the careful ministrations of bean counters and corporate optimizers who have turned movie theaters, once palaces, into cheap industrial warehouse spaces operated robotically and understaffed with inadequate contingents of the bitter and indifferent working for the minimum wage.

It takes hundreds of millions for special effects, movie star salaries and blowing up all those expensive cars, but at the actual delivery end the industry has whittled every possible penny out of quality of service.

Their problems are compounded by the aging US population. Even hard-core cineastes like myself (I ran a film society at Yale) today feel out-of-place in today’s theaters. Adults buy videos or watch films on cable or the Internet these days. Teenagers go to movie theaters for the same reasons teenagers always went to movie theaters.

The film industry is being confronted by the same kinds of changes in technology and the arrival of handier and more competitive methods of product delivery that confronted the music industry, and it seems that these dinosaurs are no more able than the other dinosaurs to cope positively with new challenges and opportunities.

Old industries wind up being run by rentiers, but dramatic innovation requires visionaries and risk-takers. The motion picture industry today is run by corporations, what changing times need are the equivalent of the aggressive businessmen, recently off the boat from Poland and Lithuania, the Warners, the Zukors, the Goldwyns, and the Mayers, who created the studios and the industry in the first place. But that kind of leadership is not going to come from inside today’s industry establishment.

25 Aug 2011

Classical CDs Beat Other Genres in Sales

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Variety has some good news.

The classical recording industry is managing to experience sales growth despite the recession, and capitalist enterprise is gradually excavating the enormously valuable recorded repertoire lost to contemporary humanity in the cataclysmic media transition which eliminated the long-playing record.

Nielsen SoundScan’s report for the first half of 2011 indicates that classical music had the biggest gain in sales of all genres, 13%, over the first half of 2010, for a total of 3.8 million albums.

Granted, that’s still a small percentage of the total market (about 2.4%), but it shows that classical is holding its own and then some, with other genres up slightly or slipping.

Moreover, the majors are being supplanted by a swarm of activity from other, smaller, nimbler sources.

Many orchestras increasingly take matters into their own hands, no longer relying on the majors for exposure. The Chicago Symphony has its own label, CSO Resound, so do the Boston and St. Louis symphonies, as well as the London Symphony, London Philharmonic and several other foreign orchestras. With Telarc reduced to a shell of its former self after the takeover by Concord, its two once-regular orchestras, the Cincinnati and Atlanta symphonies, have just formed their own labels.

Probably the most successful and luxuriously packaged inhouse orchestra label is the San Francisco Symphony’s SFS Media, which in 2010 completed its decade-long Mahler project on 17 SACDs and just issued a capstone documentary, “Keeping Score: Mahler,” on DVD and Blu-ray. SFS Media claims to have sold more than 130,000 Mahler CDs worldwide at premium prices — a roaring success for a classical series.

Likewise, individual artists and small ensembles now routinely bypass the majors and minors alike in favor of their own boutique CD labels — like New York new music collective Bang on a Can’s Cantaloupe, pianist Wu Han and cellist David Finckel’s ArtistLed, plus composer Philip Glass’ Orange Mountain Music.

Free of the old restrictions, these labels can offer as many choices to their fans as their markets will bear. In the prolific Glass’ case, Orange Mountain Music has issued at least 75 releases since its launch in 2003, and the Music@Menlo festival in Silicon Valley exhaustively documents its concerts in massive annual boxed sets.

Naxos, the budget label that upended the classical record industry in the 1990s with its no-frills, high-quality recordings, has turned itself into a big distributor of small labels, with 148 of them (mostly classical) now under its umbrella. Harmonia Mundi, once and still a specialist in early music, also distributes a long string of small labels.

If the majors don’t want to keep their rich classical catalogs in print, others are happy to step into the breach. The online retailer ArchivMusic, now owned by piano manufacturer Steinway, has been making deals with the majors that allow it to press custom copies of out-of-print classical CDs and sell them on its website (the titles now number well in the thousands).

Hat tip to Adam Krims.

11 Aug 2010

Pretty Girl Quits Job With Flair

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The viral amusement item of the day is this dry erase board photo presentation by a cute young thing allegedly composed and sent to co-workers on the occasion of her quitting her job.

If the story really is on the up-and-up, I would guess that it will quickly attract new job offers. I have my doubts though. She is too pretty, and the storyline is too pat.

From the Chive.


UPDATE, a few minutes later.

As predicted, it was a hoax. These perfect little gems that completely fit our expectations always are.


Another UPDATE, a few more minutes later.

But, wait! Prankster brother tells Media Memo, No, no, “Jenny’s very real.” An update is promised for tomorrow. “Jenny” may be appearing on Jay Leno and Good Morning, America.

21 Apr 2010

Worshipping Leviathan

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My liberal classmates rant and rave regularly about the nefarious behavior of Wall Street banks and big corporations, but in their eyes government can do no wrong (as long as Republicans are not in charge).

Coyote reflects on the strangeness of the statist perspective.

I have total sympathy with those who distrust corporations. Distrust and skepticism are fine things, and are critical foundations to individual responsibility. History proves that market mechanisms tend to weed out bad behaviors, but sometimes these corrections can take time, and in the mean time its good to watch out for oneself.

However, I can’t understand how these same people who distrust the power of large corporations tend to throw all their trust and faith into government. The government tends to have more power (it has police and jails after all, not to mention sovereign immunity), is way larger, and the control mechanisms and incentives that supposedly might check bad behavior in governments seldom work.

Hat tip to the Barrister.

01 Oct 2009

Wall Street Burned By Obama

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Charles Gasperino, in the New York Post, describes how a large portion of the New York financial industry’s senior management fell for Barack Obama’s tone of moderation and failed to look at the democrat candidate’s actual political record. They’re sorry now, experiencing the Obama Administration’s economic naïveté and unrelenting commitment to leftwing radicalism.

In the depths of the financial crisis last year, people like Morgan Stanley’s John Mack, BlackRock’s Larry Fink, Greg Fleming (then of Merrill Lynch), JP Morgan’s Jamie Dimon and Goldman Sachs’ Lloyd Blankfein were telling everyone that candidate Barack Obama was a “moderate,” and moderation was what this country needed.

What a difference a year makes. They won’t admit it in public — but in private conversations, the top guys on Wall Street are feeling burned.

The guy who seemed like such a steady voice — vowing to curb runaway spending and restoring order to the banking system and the economy as a whole — is instead so driven to achieve his big-government policy goals that he and his policy people are ignoring their own economic advisers on the severe economic costs that his agenda will cause.

I’m told that Treasury Secretary Tim Geithner and chief economic adviser Lawrence Summers have both complained to senior Wall Street execs that they have almost no say in major policy decisions. Obama economic counselor Paul Volcker, the former Fed chairman, is barely consulted at all on just about anything — not even issues involving the banking system, of which he is among the world’s leading authorities.

At most, the economic people and their staffs get asked to do cost analyses of Obama’s initiatives for the White House political people — who then ignore their advice.

It’s almost the opposite approach, the Wall Street crowd complains, from the last Democratic president, Bill Clinton, whose main first-term achievement — deficit reduction — was crafted by his chief economic adviser, Robert Rubin.

Like Obama, Clinton and Rubin promised to raise taxes on the “rich,” and they did. But Clinton didn’t raise taxes to embark on a wild-eyed redistribution of wealth and massive programs. In the early Clinton years, Rubin convinced the president that he needed to avoid the grim consequences of runaway spending — and after the Republicans took Congress in ’94, it was no longer an option.

Of course, the Clinton tax hikes came at a cost — before the tech boom ignited the economy in 1995, growth was mediocre at best. But government spending remained under control, and lower interest rates followed, as did an economic recovery.

Obama, according to Wall Street people who regularly deal with his economic and budget officials, is acting as if he has a blank check to do what he wants, while ignoring the longterm costs of his policies.

As one CEO of a major financial firm told me: “The economic guys say that when they explain the costs of programs, the policy guys simply thank them for their time and then ignore what they say.”

In other words, the economic people feel that they have almost no say in this administration’s policy decisions.

06 Aug 2009

Buffett’s $7 Billion Bailout

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Warren Buffett’s share of the federal bailout

Rolfe Winkler
so admired Warren Buffett’s old-fashioned market fundamentalism that, when he was a lad of fourteen, he wrote his idol a fan letter.

Winkler is not so admiring of the whited sepulchre of Omaha today.

Were it not for government bailouts, for which Buffett lobbied hard, many of his company’s stock holdings would have been wiped out.

Berkshire Hathaway, in which Buffett owns 27 percent, according to a recent proxy filing, has more than $26 billion invested in eight financial companies that have received bailout money. The TARP at one point had nearly $100 billion invested in these companies and, according to new data released by Thomson Reuters, FDIC backs more than $130 billion of their debt.

To put that in perspective, 75 percent of the debt these companies have issued since late November has come with a federal guarantee. …

With $7 billion at stake, Buffett is one of the biggest of these shareholders.

He even traded the bailout, seeking morally hazardous profits in preferred stock and warrants of Goldman and GE because he had “confidence in Congress to do the right thing” — to rescue shareholders in too-big-to-fail financials from the losses that were rightfully theirs to absorb.

Keeping this in mind, I was struck by Buffett’s letter to Berkshire shareholders this year:

    “Funders that have access to any sort of government guarantee — banks with FDIC-insured deposits, large entities with commercial paper now backed by the Federal Reserve, and others who are using imaginative methods (or lobbying skills) to come under the government’s umbrella — have money costs that are minimal,” he wrote.

    “Conversely, highly-rated companies, such as Berkshire, are experiencing borrowing costs that … are at record levels. Moreover, funds are abundant for the government-guaranteed borrower but often scarce for others, no matter how creditworthy they may be.”

It takes remarkable chutzpah to lobby for bailouts, make trades seeking to profit from them, and then complain that those doing so put you at a disadvantage.

Elsewhere in his letter he laments “atrocious sales practices” in the financial industry, holding up Berkshire subsidiary Clayton Homes as a model of lending rectitude.

Conveniently, he neglects to mention Wells Fargo’s toxic book of home equity loans, American Express’ exploding charge-offs, GE Capital’s awful balance sheet, Bank of America’s disastrous acquisitions of Countrywide and Merrill Lynch, and Goldman Sachs’ reckless trading practices.

And what of Moody’s, the credit-rating agency that enabled lending excesses Buffett criticizes, and in which he’s held a major stake for years? Recently Berkshire cut its stake to 16 percent from 20 percent. Publicly, however, the Oracle of Omaha has been silent.

This is remarkably incongruous for the world’s most famous financial straight-shooter. Few have called him on it, though one notable exception was a good article by Charles Piller in the Sacramento Bee earlier this year.

Buffett didn’t respond to my email seeking a comment.

What saddens me is that Buffett is uniquely positioned to lobby for better public policy, but he’s chosen to spend his considerable political capital protecting his own holdings. …

To me this feels like a betrayal. There’s a reason he’s Warren Buffett and not, say, Carl Icahn.

As Roger Lowenstein wrote in his 1995 biography of Buffett, “Wall Street’s modern financiers got rich by exploiting their control of the public’s money … Buffett shunned this game … In effect, he rediscovered the art of pure capitalism — a cold-blooded sport, but a fair one.”

But there’s nothing fair about Buffett getting a bailout, about exploiting the taxpaying public for his own gain. The naïve 14-year-olds among us thought he was better than this.

What would Ben Graham say?

06 Jul 2009

Brit Company Tries Naked Friday

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Contemporary Britain is competing very seriously with California in the contest for the best nonsensical ideas applied in daily life.

Newcastle’s onebestway, a small design and marketing firm facing tough economic times, took serious steps to deal with the crisis. It hired a swami, excuse me! a business psychologist, to help in improving morale.

The Telegraph reports:

David Taylor, a business psychologist, told workers at design and marketing onebestway, in Newcastle upon Tyne, that a Naked Friday idea would boost their team spirit.

He was called in to help the firm after six staff members were forced into taking redundancies at the start of the credit crunch.

Mr Taylor told them that, by stripping off their clothes, staff could also strip away inhibitions and talk to each other more openly and honestly.

He said: “Inviting an organisation to go naked is the most extreme technique I’ve used. It may seem weird but it works. It’s the ultimate expression of trust in yourself and each other.”

Despite some initial reluctance, nearly all the staff took off all their clothes – except for one man, who wore a posing pouch, and one of two female workers, who kept on black underwear.

Sam Jackson, 23, the house manager, was the only woman to go fully naked. She said: “It was brilliant. Now that we’ve seen each other naked, there are no barriers.


The Daily Mail reports that careful preparations had to be made, but assures us that the experiment proved a grand success.

During the week leading up to the strip-off, the workers were encouraged to photocopy parts of their bodies to make them more confident about themselves.

A nude model was also brought in for the workers to sketch and talk to.

Sam added: ‘It took a week of David being in the office for us to build up courage. The first few steps were very nerve-wracking, but once I got to my desk and got used to it, I felt totally comfortable.

‘It was emotional but we found we were much more able to talk to each other honestly – and have been since. The company

Managing Director Mike Owen, 40, said: ‘We’re either brave or mad. But I did tell everyone they didn’t have to do it -only if it felt right.’


Naked Office, a television program which filmed all this, will be aired July 9th on Virgin1.

03 Jun 2009

Bye Bye, Dinosaur Media

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Declining Newspaper Quarterly Ad Revenues From 2006

Another graph, this one is from Tech Crunch:

Total newspaper ad sales dropped by an unprecedented 28.28% in the first quarter of 2009, a deep plunge that represents a loss of more than $2.6 billion in ad revenue compared year-over-year. Compared to 3 years ago – 2006 was a pretty good year for American newspapers – we’re looking at a drop of more than $4.5 billion in ad sales in just three years if you only take into account the first quarter.

The sharp decline is caused by the lousy state of both digital and dead tree ad sales: the stats posted on the Newspaper Association of America website show that print sales fell by 29.7% in the first three months of this year (to $5.9 billion), while online sales dropped a record 13.4% (to $696.3 million).

Buggy whip sales figures probably looked a lot like this after Henry Ford’s Model T hit the market.

Of course, some of us think it isn’t only the Internet & Craig’s List producing this decline. The arrogance, insularity, partisanship, and dishonesty of establishment newspapers has to be having some negative impact.

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