Citizen's Arrest

Running down the daily blog roll, I found a particularly interesting comment on The Cunning Realist.

Not to mention a citizenry with very little interest in citizenship. It will take a great crisis to get things moving.
--Mary, July 8, 2008

This is a recurring theme in much of my recent reading (and viewing). Our culture has shifted so far toward capitalism, it is no longer a facet of life, but life itself. Citizenship, community, family and personal lives have all taken a back seat to our material aspirations.

From Bill Moyer's Journal:

Bill Moyers: Here we are, at the height of the holiday season. The malls and the shops are packed. Stuff is flying off the shelves. And like Grinch or Scrooge you stand up and say, "Capitalism's in trouble." Why?

Benjamin Barber: Because things are flying off the shelves that we don't want or need or even understand what they are, but we go on buying them. Because capitalism needs us to buy things way beyond the scope of our needs and wants to stay in business, Bill. That's the bottom line. Capitalism is no longer manufacturing goods to meet real needs and human wants. It's manufacturing needs to sell us all the goods it's got to produce.

I would encourage everyone to watch this interview in its entirety. Mr. Barber is on point regarding not only the American consumer, but also American capitalism. We work harder to produce and purchase more of what we do not need and corporations respond with an unwavering focus on developed markets. In an increasingly pluralistic and informed society, the focus is somehow progressively self-centered.

For example, global warming has become a hot-button issue and being "green" is very fashionable. Yet "green" equates to buying new light bulbs, new cars, new homes even. Two minutes on Google and our supposedly informed public can find that "the US consumes 25% of the world's energy (with a share of global productivity at 22% and a share of the world population at 5%)." (Wikipedia) The most effective and immediate way to be "green" is to reduce your consumption of energy and energy intensive products, not the other way around. It all seems fairly intuitive, but we are accustomed to the healing power of consumption and would hardly know how else to spend our time.

Similar concerns are voiced in an excellent Orion Magazine article:

Today "work and more work" is the accepted way of doing things. If anything, improvements to the labor-saving machinery since the 1920s have intensified the trend. Machines can save labor, but only if they go idle when we possess enough of what they can produce. In other words, the machinery offers us an opportunity to work less, an opportunity that as a society we have chosen not to take. Instead, we have allowed the owners of those machines to define their purpose: not reduction of labor, but “higher productivity”—and with it the imperative to consume virtually everything that the machinery can possibly produce...

Our modern predicament is a case in point. By 2005 per capita household spending (in inflation-adjusted dollars) was twelve times what it had been in 1929, while per capita spending for durable goods—the big stuff such as cars and appliances—was thirty-two times higher. Meanwhile, by 2000 the average married couple with children was working almost five hundred hours a year more than in 1979. And according to reports by the Federal Reserve Bank in 2004 and 2005, over 40 percent of American families spend more than they earn. The average household carries $18,654 in debt, not including home-mortgage debt, and the ratio of household debt to income is at record levels, having roughly doubled over the last two decades. We are quite literally working ourselves into a frenzy just so we can consume all that our machines can produce.

This brings us back to Mary's comment about the lack of interest in citizenship. Our competitive marketplace is not just amongst companies, but also the consumers. For most, the daily struggle is to prove your material worth. Intellectual challenge, intimacy with family and friends, artistic ability, health and fitness, service and charity, religious commitment... these are all nice and occasionally fit into our schedule, but they are no longer priorities.

Consider life's true gifts and consume vivaciously. Embrace your family and friends, your pet and the great outdoors, a nap on Sunday afternoon or conversation with friends, good music and laughter. Consume the material excesses less often and let your life be filled with authentic pleasures.

Web Fun

Bored at home over the weekend? Check out a few of these sites:

Twine - labeled as a knowledge networking site, it is part of the semantic web movement to further integrate our life with technology... as if we need that...

Deezer - if you've been using Pandora or some other internet radio site, this is a fun one to try. Best feature I've found so far is the ability to create your own playlists and not being limited to the same songs over and over like Pandora tends to do.

Viewzi - difficult to say much here. You must register for the site and wait for your invitation to join (like Twine). I haven't been invited yet, so there isn't much to comment on. However, it is interesting to consider what an alternative to google might look and function like.

Vimeo - like YouTube, but better. More interesting content and higher quality videos. Some pretty eclectic stuff on here.

Last FM - another fun music site. My favorite part of the site is the "similar artists" section. It provides a long list of similar artists, but ranks them in order of how similar they are to what you were listening to.

cleanhotdry - if you like coffee, you'll like this site. It's a very new blog coming from Vancouver. Sounds like they have a vibrant coffee scene there and the writers seem very informed. Hope they update often.

William F. Buckley

I'll post some original content on here soon. However, I don't have the expertise or knowledge to comment on the death of William F. Buckley. There are plenty of tributes and obituaries worthy of your time, just not from me.

Despite this, Ezra Klein's comments resonated with my sense of a current conservative anti-intellectualism. I believe new media is slowly elevating our national discourse away from cable news and conservative radio, however we are far from a nation where being a political thinker "made you a cultural figure."

As a slightly more general point, in the last two or three years, a whole host of giants have passed away, men who were political thinkers at a time when that made you a cultural figure. John Kenneth Galbraith, Milton Friedman, Arthur Schlesinger Jr., Norman Mailer, and now, William F. Buckley Jr. Gore Vidal is just about the last of their number left. And that's a shame. They would write serious books of political analysis and sell millions of copies -- they were the writers you had to read to call yourself an actual political junkie. Now, the space they inhabited in the discourse is held by the Coulters and O'Reilly's of the world. Where we once prized a tremendous facility for wit, we're now elevating those with a tremendous storehouse for anger. Run a search on quotes from Galbraith, Buckley, or Friedman, then do the same for O'Reilly and Coulter. We're really losing something here.
-- The American Prospect, February 27, 2008

Oscar Predictions

I promised to get a few of my picks up for tonight's Oscars, so here they are. One note: I have not seen There Will be Blood yet...

Actor in Leading Role: Daniel Day-Lewis

Actor is Supporting Role: Javier Bardem*

Actress in Leading Role: Marion Cotillard

Actress in Supporting Role: Cate Blanchett

Animated Film: Ratatouille

Documentary Feature: No End in Sight*

Music: Atonement

Best Picture: No Country for Old Men*

I think my favorite film of the year was Bella. The film is not nominated for any awards.

* Denotes a personal favorite.

The Coming Food Crisis

The rising costs of food and subsequent potential for crisis should not come as a surprise to anyone paying attention to commodity markets and policies.

From the New York Times:

The distortions in agricultural production are startling. Corn prices are up about 50 percent from last year, while soybean prices are projected to rise up to 30 percent in the coming year, as farmers have replaced soy with corn in their fields. The increasing cost of animal feed is raising the prices of dairy and poultry products.
--September 19, 2007

The general media is not paying much attention to this, as subprime related news continues to dominate most outlets. However, the situation demands a shift in focus to a problem that will likely have a much deeper impact on the world (i.e. famine and starvation).

Today's Financial Times points out a few more structural problems within the current market:

Rising food prices pack a powerful political punch in the developing (or partly-developed) world, to a degree that is sometimes underappreciated by the pampered west...

Goldman Sachs thinks this is just part of a much bigger problem of capital and resource misallocation. After all, Mr Currie argues, if the world today was a rational economic place, then regions such as the Gulf which are food-constrained ought to be investing heavily in agriculture. And since the US is the world's biggest agricultural supplier, this implies that the Saudi Arabians, say, should be snapping up farms in Wisconsin - as America secures oil in the most efficient manner by sending teams of Texans to Riyadh.

But in practice numerous investment controls prevent Saudi Arabians from buying Wisconsin farms and Americans owning Saudi oil wells. And these controls are not being dismantled now. On the contrary, mutual mistrust is now rising. Hence the fact that Gulf leaders are currently considering desalinating sea water to plant wheat in the desert - while the US and Europe are trying to turn corn into fuel. Such exercises might make sense in domestic political terms; but they are apt to be fiendishly expensive. Thus the upshot of this misallocation, Mr Currie would argue, is even more inflation - even if the world does experience some form of growth slowdown.

This campaign season, consider the issues facing the rest of the world and America's role in finding solutions. We need a leader who is informed, capable and willing to deal with situations unrelated to subprime or Iraq... immediately.

Detroit Auto Show

The Detroit Auto Show has finally given us some interesting news. Emerging markets are fueling demand for new cars and, as sales there outpace developed countries, these customers will be increasingly important to major auto companies. The most recent demand is for an ultra-low cost (~$2,500 - 4,000) vehicle.

This type of car would open the door to innumerable new drivers. Temporarily ignoring the increased congestion and adverse effects on the environment, the prospect of a new paradigm in car manufacturing is a relief.

Americans are particularly fond of their large, comfortable automobiles. Current pricing differentials on small to mid-size vehicles are not enough of an incentive to buy a smaller car. However, if the price tag dropped to $4,000 on a small vehicle, I predict many buyers will reevaluate how much space they really need. The price would create a breaking point to finally separate Americans from over sized and inefficient vehicles.

Another benefit of the $4,000 car option is greater flexibility for American consumers. The U.S. personal savings rate in November was negative 0.5%. With finances stretched to the limits, it is no wonder we are dealing with the sub-prime mortgage crisis and a looming recession. The sensitivity of American consumers is levered so tightly to home prices and interest rates, the rest of the economy falters soon after any housing disturbances.

Below are a few scenarios based on estimated car prices and basic assumptions for payment. Specifically:

- $300 Monthly Payment
- $1,500 Down Payment

My conclusion is the economy, the environment and our culture would be improved dramatically by shifting priorities away from ostentation to conservative and thrifty consumption.

Schultz Back at Starbucks

It seems Howard Schultz is one of the informed readers of Earnest Observer. The company replaced Jim Donald with Schultz yesterday and it finally appears Starbucks is concerned with serious issues raised in a recent post.

From the Financial Times:

A company statement said the move was part of a set of initiatives aimed at "refocusing the company on providing customers with the distinctive Starbucks experience, and building on Starbucks' legacy of innovation."

This is a good decision for Starbucks and possibly the last chance for a company on its way to competing with McDonald's:

McDonald's is setting out to poach Starbucks customers with the biggest addition to its menu in 30 years. Starting this year, the company's nearly 14,000 U.S. locations will install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks' ice-blended Frappuccino...

The coffee chain has evolved into more of a filling station. It is now battling fast-food outlets for some of the same customers and meal dollars. Today, about 80% of the orders purchased at U.S. Starbucks are consumed outside the store. The average income and education levels of Starbucks customers have gone down, the company has said. As part of a big push into food, Starbucks sells lunch at more than two-thirds of its company-owned locations in the U.S.
-- Wall Street Journal, January 7, 2008

Defining Conspicuous Consumption

From the New York Times:

The office, which Mr. Cappello said cost $300,000 to $350,000, holds three dozen antique chess sets, several hundred globes, 1,800 handmade canes from around the world and thousands of antique books. The paneling came from a castle in the south of France, and the Empire-period fireplace, he said, was built for one of Napoleon’s residences. A billiard table from 1849 and a large partners’ desk anchor opposite ends of the room, and 19th-century military and animal paintings adorn the walls, along with two big plasma screens, “for watching football games with my buddies,” he said.



Here are my predictions, based on the limited (thankfully) exposure I've had to people like this:

1) He has no idea how to play chess.
2) He does not use a cane.
3) Someone else picked out the antique books to adorn his walls.
4) The real reason for the room is to avoid his family while claiming to work. (You can just see the love he has for his daughter pouring out in the picture...)

All this reminds me of a quote from an earlier post:

Whatever happens, the old American scorn for pretension is bound to reassert itself someday, and dear God, let it be soon.
--B.R. Myers

Starbucks Today

Starbucks recently made announcements regarding its corporate strategy and new advertising initiative. From the Wall Street Journal:

Chief Executive Jim Donald said Starbucks is getting into TV advertising because "as we grow our stores, we're trying to reach out to this broader audience that maybe [has] not had the chance to experience Starbucks."

Regardless of what the company says, this is a direct response to the following developement:

The average number of transactions in Starbucks U.S. stores fell for the first time during the most recent quarter...

Ignoring the advertising initiative and focusing on the company's broader strategy, a few observations come to mind. Hardly a victim, the success of Starbucks will force the company to make further changes to its business model and target market. My experience with Starbucks is limited to the recent past. I am not familiar with its early stores or original culture. However, I have witnessed changes within the company. The most obvious changes are related to the environment of its stores and the ubiquity of the brand.

Despite the evolution of the business, management clings to tennants of the original strategy.

Starbucks likes to think of itself as a collection of thousands of corner cafes that sponsor the local zoo and have baristas who know their customers' favorite drinks

While this strategy provided the catalyst for its impressive growth, it has now reached a point where that game will no longer work. "Thousands of corner cafes" is inherently oxymoronic and the company is too large to maintain a local feel. This is particularly true when the "corner cafe" is hawking espresso machines, DVDs, CDs, packaged coffee, cups, etc, etc. Most Starbucks stores no longer resemble a cafe, maybe a "Coffee Wal-Mart", but not a cafe.



Now, compound the changes in environment with the ubiquity of the brand. Living near the center of Houston, I could locate at least 5-7 Starbucks stores in the time it would take to locate 1 McDonalds. If the cafe theme is still a goal, how is this prevalence aiding the company in meeting its objectives? The corporate feel of the stores is sharply enhanced by the corporate image invoked by seeing a Starbucks on every corner (or two on every corner, circled here on West Gray Street in Houston).



The money quote from the Wall Street Journal article hints at the fate of Starbucks.

"There is a huge battle of the coffee brands and everyone is encroaching on Starbucks's turf," says Dean Crutchfield of Wolff Olins, a branding firm owned by Onmicom Group. "The competitiveness is diluting and commoditizing the entire coffee category, so it's critical that Starbucks maintains its message in the marketplace."

The most interesting thing about this observation is his focus on the commoditized portion of the market. I believe he is referring to McDonalds and Dunkin Donuts and ultimately comparing Starbucks to these down-market competitors. Starbucks has not maintained its message to the marketplace and therefore will be forced to compete with the national chains. The quality of the coffee will most likely begin to resemble these chains rather than the local coffee shops and cafes. A lower quality product, marketed to the masses is inevitable. The corporate strategy has deviated too far its the original intent to return now. Also, the logistics of supplying thousands of stores with coffee does not allow for local or heterogeneous experiences.

The size and culture of Starbucks indicate further shifting in strategy. I believe this shift will be toward the lower end of the coffee market and allow local coffee shops and cafes to fill the "corner cafe" gap left behind. Hopefully that means a few more places like the one below.

Clueless

From the New York Times:

Looking for someone to curate your life? Need a personal concierge whose expertise is not picking up dry-cleaning but helping chose your wardrobe, your tastes, your friends? Ms. Storr calls herself a personal manager, but her duties go far beyond that. Her clients, all of them men, pay monthly fees of $4,000 to $10,000 to have her be their personal decider in nearly all things lifestyle-related.

The New York Times really should stop printing things like this if they want to enhance the image of the city. While hiring Ms. Storr in the name of being fashionable and having the right friends, her clients exemplify the rapid homogenization of the city.

Calling on assistants including a stylist and a caterer, Ms. Storr helps people figure out their tastes.

All in all, if you are a grown man (all 8 of her clients are men) too busy to know what your "tastes" are but wealthy enough to spend $10k a month for hipster school, take time to reexamine some things.