Not Even Trying Anymore

When I realized that I wasn’t even freaking out about the most recent crony capitalism scheme from the current administration I’ll admit I was a bit disturbed. Generally, when government leaders implement a scheme that will harm the people they nominally govern, the country where those people live, or the world in general they will make some effort to explain or rationalize the move; when the scheme enriches their political supporters at the expense of everyone else in the affected industries they will go to much greater lengths to bury their tracks in order to avoid a very real risk of lawsuits. But in the case of the Federal intervention to keep obsolete coal, oil, and nuclear power plants operating for at least another two years which was announced on Friday, the administration doesn’t even seem to be trying to hide the corruption…

If you have an unusually strong stomach you can pick up the ABC News story about this action, but don’t say I didn’t warn you. As announced, the initiative will keep these elements of our national power grid active, regardless of local need or cost-effectiveness, as a matter of National Security. Why, exactly, power generation units that can’t be operated at a profit are critical to the security of the United States isn’t explained in the memo that turned up on Friday. The Department of Energy merely claims that nuclear, coal, and oil-fired power plants are a “critical” part of the national grid, and without them we might be vulnerable to… Well, to something; they didn’t specify what. You’d have to be a real cynic to suggest that this action is being taken solely to curry support from the people who own obsolescent power plants and coal mines – and the people who work in those industries, of course…

Regrettably, the people at ABC News are apparently that cynical, as are industry watchdog groups, government accountability groups, environmentalist groups, and the Energy Information Administration, all of whom have criticized the announcement as nothing more than a political move intended to make good on a campaign promise from the last Presidential election. The truth is that use of coal for electrical generation has been dropping every year for over a decade, decreasing by over 20% in just the last year, and it would be redundant to specify the costs of using oil for power, or the environmental consequences of nuclear power and nuclear waste. Requiring companies to keep those plants open, and (effectively) requiring utility companies to keep purchasing the output from those plants, will result in higher costs to consumers and benefit no one except the coal companies and whoever owns the obsolete power plants…

What makes this particular story so remarkably nauseating is that no one in the Administration has denied any of this, or offered any support for the contention that maintaining these facilities has some strategic or defense purpose. It’s not exactly surprising, given the other abuses of power for personal enrichment that we have seen from this Administration, or given the fact that our current Secretary of Energy does not believe that we need a Department of Energy, or given the fact that our current head of the EPA is openly an industry flak who (apparently) believes that air and water pollution are good for you. It’s just exceptionally brazen, even for American politics, and exceptionally lazy for anyone in this 21^st Century…

I normally stay away from political issues in this blog because, as previously noted, it’s not my area of expertise and I feel there are already more than enough blogs offering political opinions written by someone without any particular qualifications. I’ve also stated for the record that I believe that cronyism, corruption, and pork-barrel politics are an unavoidable part of any representative democracy, and as long as we can keep them down to no more than a slightly regrettable level we will still be doing far better than any other system of government enacted to date. But when the party that is nominally in favor of small government, free-market capitalism, and responsible fiscal policy starts doing things this blatantly self-serving I think we are all justified in complaining about the incompetence, if not the actual policy. Face it, folks, these people aren’t even trying anymore…

Personal Shoppers for Whom?

The concept of personal shopper services isn’t a new one; several major retailers have offered such a service for years now. For customers who are either very busy or simply hate shopping in person, and can afford the service charge, being able to call your personal shopper on the telephone and tell him or her to go find you a new suit, matching shoes, and a present for your 12-year-old niece and have all of them in your office by the end of business today is an attractive idea. But I have to admit that while I’m familiar with personal shopper services being offered by a number of premium and super-premium retailers, the story about Wal-Mart launching such a service did catch me by surprise…

You can consult the MSNBC story if you’d like, but the basic idea isn’t that complicated. Wal-Mart has been beta-testing a new personal shopper service, which they call Jetblack, in New York for the last few months. Updating the concept a bit, the Wal-Mart version includes the ability to put in shopping orders by text message, upon which your personal shopper will text back pictures of various options for your consideration. Jetblack service will include messages to the user from their personal shopper regarding special deals, sales, or other opportunities, which could in theory keep you from having to read Wal-Mart advertising or keep track of upcoming sales. The service will also provide access to merchandise from other retailers, with Saks and Pottery Barn listed in the initial wave, and others to come…

The big question, as I see it, isn’t so much whether customers who fit the primary demographics for Wal-Mart will be able to afford $50 per month for a shopping service, or even if they would want such a thing in the first place; Wal-Mart does have some higher-end customers, and they wouldn’t need all that many of them to make a personal shopper service viable. The issue is whether Wal-Mart can develop enough of a presence in high-density population centers to make such a service profitable. The company avoided big cities, and even larger towns, for many years and has had trouble establishing itself in urban areas even when it tried to change that focus. Going into a city means more expensive real estate, higher operating costs, and far more competition than the company has traditionally faced or wanted – but in order to make a personal shopper service work they may have to crash some of those larger markets…

Now, we should probably note that despite all of the jokes made at their expense (see the People of Wal-Mart site if you don’t believe me), Wal-Mart is still the largest retail business in the world, and there isn’t much question that they could enter whatever markets they would need to in order to reach customers for the Jetblack service. It also seems possible that they could offer the service in parts of the country where they don’t actually have any retail store presence – all they really need for this is a warehouse to store their merchandise and a set of delivery personnel (and vehicles) fancy enough to qualify as “white-glove” to their customers. This is essentially the same model that Amazon is using for its real-time home delivery business, and that seems to be working so far. Wal-Mart should probably stay away from delivery drone technology, though…

Wal-Mart could also try to expand their shopping service to include groceries; this would take them into competition with companies like Hello Fresh and Fresh Direct, but it would also give functionality to their service that companies like Nordstrom’s and Macy’s can’t offer. A more interesting question is how they will do against Amazon Prime, which doesn’t (yet) offer as much personalized service, but is about four times cheaper, and has access to even more products than Wal-Mart. The whole business model might seem a bit bizarre to people who are only familiar with Wal-Mart as a small-town retailer frequented mainly by rednecks, but in a world where Amazon is opening brick-and-mortar stores and at least two other companies are selling cars from vending machines, it’s getting harder to say what is surprising anymore…

The Ethics of Protests

There has been a great deal of commentary flooding the airwaves over the last few weeks regarding the decision by the NFL to prohibit their players from kneeling during the National Anthem in protest of injustice in America, and specifically the excessive use of force against Americans of African ancestry. I don’t propose to comment on the political or ethical issues surrounding either the injustice or the protests themselves – I don’t actually believe there is any debate that the treatment of persons of color in this country is deplorable, or that the First Amendment to the Constitution gives the players the right to protest the situation. But the NFL ruling itself is being described and defended as a business decision, which brings it into the scope of this blog. I thought we should take a closer look…

First off, it is important to recognize that for all that it acts like a Federal institution, the National Football League is a business, owned and run by private citizens. Functionally it is more like a collective than an actual franchisor, despite the individual team organizations being called “franchises,” but that does not change its legal status. As long as the restrictions are applied equally to all groups and parties within their workforce, the NFL telling the players not to protest something while on the job isn’t really any different from another business telling its employees not to wear MAGA hats while at work, for example. Or, for that matter, asking its personnel to wear clothing that covers any tattoos during working hours…

One could reasonably argue that the NFL’s claim that allowing the protests to continue is bad for their business is not convincing. So far, at least, I haven’t seen any data that suggests that people who are specifically opposed to these protests will stop watching the games, or that any of the advertisers will stop sponsoring the broadcasts. Likewise, the argument that other groups will start demanding equal time is rather dubious; to date no one seems to be staging protests that there aren’t enough people of color being randomly shot by the police, or that First Amendment rights are somehow a bad thing. In fact, over the last few decades there have been any number of players – and occasionally entire teams – wearing special colors or graphics in support of various causes, and this does not appear to have impacted the League’s business success, either…

At the same time, it doesn’t seem unreasonable to suggest that the League is under no obligation to provide their employees with a public forum in which to promote their position, either. If the NFL wants to require their broadcast partners not to air footage of the players kneeling, or deny access to the games to journalists and sportswriters who describe or display pictures of the protests, they would appear to be within their rights to do that. If they attempted to prevent their employees from talking to the press about the protests, or from holding rallies and/or giving speeches in support of their position there might be some difficulty, but if any of the teams or their owners have tried to implement such a restriction there hasn’t been any mention of it so far…

The issue is being complicated by the fact that the issue is inherently political in a way that wearing pink in support of breast cancer awareness or airing commercials in favor of youth sports and fitness is not, to take only the most obvious examples. It is also being complicated by the fact that both the League and the teams make use of the names, uniform numbers, and likenesses of certain players for promotional purposes, in which case the promotion of any particular cause by a player can be interpreted as support for that cause by the NFL itself, if the observer cares to see it that way. But despite these and other complications, the basic question is fairly straightforward…

Does the NFL have the same right to restrict the political and/or social protest activities of its employees while they are in uniform and actively working for League members that any other business has under the same conditions? Does the fact that their employees are public figures, and that the NFL itself has contributed to producing and maintaining those public identities give them rights over the actions or speech of their players that would not apply to other companies? It doesn’t seem reasonable to allow retail associates at The Gap to run through the store with “Free Tibet” banners, or to require McDonald’s to allow its employees to wear PETA regalia while on the job. Should NFL players have greater or lesser freedom of speech than any other American workers? Or should the teams and the league avoid all political and social commentary (at least on camera) and just produce and display athletic competitions?

It’s worth thinking about…

Would You Buy That?

At first glance, the owners of a major company looking for buyers is nothing special. Most people thing of acquisitions as starting from the buyer’s side – somebody finds a company that they think can create synergy with their existing assets and puts in an offer to buy it – but it isn’t at all unusual for an ownership group to decide that one or more business units are not going to become profitable in the future and look to sell them off. It is somewhat more uncommon for such an offering not to get a single bid, even one that dramatically lowballs the value of the company being offered and is extended just to see if the seller is serious. What makes the story from earlier this week so remarkable is that the seller in question is a national government – and the company being offered for sale is their national carrier…

If you missed it, the Times of India article is available here. Why exactly the offer hasn’t drawn any bids isn’t entirely clear – it can be very difficult to explain things that didn’t happen – but a few parts of the deal seem a bit unworkable. Assuming the debt owed by the company being acquired isn’t unusual in this sort of transaction, but when there’s a lot of it (as in this case) it can serious impede efforts to recoup the cost of the purchase. Taking responsibility for an inappropriately large work force can also be problematic, given the costs in both severance pay and public relations that will be involved in cutting down the number of employees to a manageable level. But what really sounds like the deal-breaker to me is that the Indian government is only looking to unload 76% ownership of the company…

Now, let me stress that I don’t have anything against public-private partnership arrangements in general. In this case, however, the national elections in India are apparently less than a year off, and there is no guarantee that the government will continue to cooperate with an acquiring company if the party currently in power does not retain control following the election. In fact, if I’m reading this article correctly, there’s no telling what a new government might choose to do regarding the sale. There is always some degree of uncertainty in an acquisition project, but it’s hard to blame any potential buyer from being skittish about having to work with a minority partner whose identity, let alone policy, could change at any moment…

Why, exactly, the government wants to retain a 24% interest in the airline isn’t clear in the story, although I’d expect it has something to do with this having been the national carrier up until now. Also unclear in this reporting is the question of why the government believes that Air India would have been an attractive takeover target in the first place. The industry isn’t quite as volatile outside of the US, where only one major airline (Southwest) has consistently made money over the last 30 years, but neither jet fuel, landing rights, or airliners are getting any cheaper, while the world of international travel is becoming increasingly dangerous. And the fact that all of the relevant unions have been opposing the sale definitely doesn’t this offering any more attractive…

Operating an airline that hasn’t made a profit in years would be difficult enough without adding a significant debt load and an unpredictable minority partner to the mix, let alone all of the other issues that appear to be in effect. Unless the government can identify some other selling point for Air India, it seems likely that they’re going to be stuck running the airline as a public entity for some time to come. Maybe things will improve after the elections, or perhaps they can bring some intangible factors (National pride? Love of air travel?) into the mix. But unless they can find some way to make the acquisition more attractive, they may eventually just have to shut down the company, sell off the remaining assets, and hope that the hit to national pride won’t be any worse than having to deal with the fact that no one seems to consider their national carrier worth buying in the first place…

Too Complicated For Me

If you were to ask anyone who studies human behavior – which is all Management scholars really do, when you get down to cases – they will tell you that human motivations are one of the hardest things to definitively identify. You can ask people why they did something, and it is possible that you might an honest answer, but once you start allowing for confirmation bias, self-deception, rationalization, different interpretations of behavioral and cultural standards, and sheer pigheaded stubbornness, just to name a few, it’s not always clear if the people in question even know why they did things. The question of whether humans are rational or rationalizing goes back at least three centuries, and probably for as long as people have been people, and that doesn’t even consider ignorance, bigotry, or outright stupidity…

Take, for example, the actions of a non-profit group calling itself The American Bible Society (hereinafter ABS). The organization has been in operation since 1816, fulfilling the mission of translating the Bible into various languages and distributing copies around the world, so that people who don’t speak English, Latin, or Aramaic can read the Christian scripture for themselves. The ABS has had a core values statement stressing generally laudable principles like integrity which it has asked employees to sign for some years, but the statement wasn’t specifically Christian and failing to sign it wasn’t a termination offense. All of that appears to have changed this year, however…

According to the Philadelphia Inquirer’s website, the ABS has a new policy that they call the “Affirmation of Biblical Community” that, among other things, forbids pre-marital and extra-marital sex, and defines marriage as being limited to one man and one woman. The organization is requiring all of its personnel to sign the new policy statement, and presumably abide by its provisions, or resign from the ABS by the end of calendar 2018. This would effectively prohibit anyone who lives with a partner to whom they are not married, and anyone in a same-sex marriage, from working for the ABS. Whether it would also cause any such people to become alienated from the organization, consider its leadership to be a bunch of small-minded homophobic bigots, or prevent the ABS from operating as effectively is yet to be determined, but according to the Inquirer a number of core personnel have already resigned their posts…

Whether or not this will bring the ABS into conflict with any Federal or state anti-discrimination laws remains to be seen, although it is worth noting that Philadelphia itself has a law that forbids discrimination on the basis of race, religion, or sexual orientation. There are exceptions in the law for non-profits and religious groups, and the ABS might be able to argue in court that they need such a requirement for reasons that escape me at the moment. What I find even more bizarre and inexplicable is what the leadership of the group thinks that such a prohibition – and the resulting alienation, distain, and anger – will do to improve their operations or help them to accomplish their mission…

The president and CEO of the group is quoted in the Inquirer story as saying that this new policy will bring “unity and clarity” to the ABS because it will ensure that their staff has a “deep and personal connection to the Bible.” I’m not sure why they believe that such a connection is necessary in order to translate text into different languages or handle the logistics of getting hard copies of the documents to people around the world who (presumably) want to read them; I’m also not clear on why they think traits like intolerance and bigotry are appropriate to a (supposedly) Christian religious mission. But even if there is any merit in those positions, I still believe that the ABS leadership has their priorities backwards…

As I have noted in posts about for-profit companies with mandatory religious requirements, it might be pleasant for the ABS personnel to work surrounded by other Christian zealots; it might also prevent anyone who works there from questioning the bigotry and intolerance being perpetuated by their leadership. But the purpose of this agency isn’t to reinforce the beliefs of existing Christian zealots or contribute to their upkeep; it is to bring the scripture as they see it to people who do not currently have access to the texts and may not even be Christians at this time. I have to ask, once again, if it wouldn’t make more sense to do good works for people and tell anyone who asks that “I do these things for you because my faith demands it” than to imply than anyone who isn’t an intolerant religious bigot is unwelcome in your ministry?

I’ve spent most of my life watching people, and most of the last three decades studying them, but I still find this sort of behavior baffling in anyone, let alone adherents of a faith that teaches acceptance, love, and universal equality as children of the same creator. Maybe this contradiction makes sense to someone, somewhere, but despite my best efforts it’s still too complicated for me…

This is Free Speech?

I’ll be the first to admit that I don’t like Yelp very much, as you may have noticed from previous posts in this space about the company. It’s not that there’s anything wrong with providing an online location for people to record their frustrations about various companies with whom they have done business, but the company’s occasional attempts to strong-arm small business owners for money (in order to avoid negative reviews) annoy me, and the fact that they have become a haven for trolls, enemies, hysterics, and blackmailers has eroded both my respect for the company and my patience with the people who post there. But as outrageous as I find fake reviews made for the purpose of damaging persons or organizations, whether for extortion or just for the fun of random destruction, I have to admit that suing people over truthful reviews because you don’t like what was said may be even worse…

Consider, if you will, a case appearing in the New York Post this week about a woman who had an experience with a doctor’s practice that was so bad she felt compelled to leave negative reviews on Yelp and two more specialized review sites telling other potential patients to steer clear. No one on either side has claimed that she did so in order to extort money (or anything else) from the doctor or the practice, but they are claiming that the reviews are a baseless attempt to make the doctor and/or the practice look bad. In suing the woman who left the reviews, the plaintiff’s attorneys have stated that the doctor is a highly qualified practitioner with the best possible training and therefore couldn’t possibly have committed the annoying and possibly fraudulent acts the defendant’s reviews describe…

Now, we should probably acknowledge that neither you nor I were present during these events, so we couldn’t really draw any conclusions about the case even if we both had law degrees. It is entirely possible that, as the doctor’s attorneys are claiming, there is no truth to these allegations, and the reviews were made entirely by the defendant out of personal animus. It is equally possible, however, that all of the things in the reviews are accurate, and the plaintiff in this case is using his greater financial resources to attempt to silence a disgruntled former patient. What is not in dispute by either party is that the defendant has already had to scrape together in excess of $20,000 in legal fees to defend herself against a suit that has not even gone to court yet…

If it turns out that the defendant was telling the truth all along it is possible that the court will rule in her favor, but that won’t be much comfort if she ends up losing the start-up business she has been developing and going bankrupt trying to pay her legal fees. On the other hand, if the claims made in the reviews were baseless, the doctor is entirely within his rights to sue to recover the damages those reviews have cost his business, although I am skeptical as to whether those are really in the million-dollar range. What seems obvious to me is that, regardless of the merits of this case, there is almost certainly a non-zero percentage of the negative reviews on Yelp that do have a factual basis – and in such cases, even if the person leaving the negative reviews has hard evidence that supports their comments, there is a real chance of their life being ruined by a punitive lawsuit…

One could also argue that I’m being unfair in blaming the people at Yelp for any of this, I suppose. The truth is that in an increasingly interconnected age, everyone needs to be more careful about what they say in public, and that includes things they post on a public website. Blaming Yelp for cases like this one could be compared to blaming the owners of a bar for the damage done in a fight that breaks out there. But I would also point out that there is a reason why bars have bouncers, why bartenders are allowed to cut belligerent drunks off before they get too obstreperous, why troublemakers can be (politely) asked to leave before anyone gets hurt…

And there is also a reason why you should be careful who you pick a fight with in a bar, no matter how good an idea it might have seemed at the time…

The Ethics of Gun Sales

Here’s another hypothetical for you: Suppose for a moment that you own a retail business, and the child of one of your customers uses something that his/her parent purchased from you to commit a heinous crime. Let us also suppose that the product you sold in entirely legal in your city, county, and state, that ownership of such articles is (debatably) protected by Federal law, and that you have complied with or exceeded the requirements of every law and ordinance that regulates these purchases and your class of business. Let us further suppose that your customer took all measures required by law and all of the measures that a reasonably prudent person would take to secure the article he/she purchased from you, and that their child defeated those measures and precautions in order to get access to the article. What degree of responsibility do you still have for the resulting heinous crime?

Before you answer that, consider what your opinion would be if you owned the company that had manufactured the article used in the aforementioned heinous crime. Suppose that your product was legal to produce in the United States, that you were in full compliance with all state and Federal laws regarding the production, distribution, and sale of your products, and that the heinous crime in question was committed by a person unknown to you in a location hundreds or thousands of miles from any facility that you own. What degree of responsibility would you and/or your company have for the heinous crime mentioned above?

As you’ve probably guessed, there is such a case currently before the courts following the Santa Fe Texas School shooting, as the families of some of the victims have brought suit against the gun store that sold the guns used in the shootings, and the companies that manufactured them. People who identify as pro-gun and/or libertarian are calling these actions absurd, and are comparing them to the lawsuits filed against food companies for making the plaintiffs obese. People who identify as in favor of gun control and/or victim’s rights have responded by saying that if you’re going to manufacture and/or sell devices that make it remarkably easy for a single deranged individual to injure or kill a great many other people in a short period of time, you’re going to have to expect to be held responsible when exactly that happens…

As an amateur historian I actually do have some knowledge of both the inclusion of the Second Amendment in the Bill of Rights and the ways it has been interpreted in modern times, but I’m not going to offer opinions about Constitutional Law without a license. The legal exposure (or lack of it) that these companies might have in this case is up to the court system, not scruffy business bloggers. For now let’s stick to the issue at hand: what ethical responsibility do the people who make and sell guns have for atrocities committed by their customers?

On the one hand, one could argue that any customer could conceivably use any tangible object to commit a crime, regardless of whether or not that object is normally considered to be a weapon. Nothing else appearing, a customer could use the objects you have sold them to stab, bludgeon, or smother their victim, and the number of things that can be used to poison an adult human being are appalling once you start to enumerate them. On the other hand, guns generally have no practical function other than launching small quantities of lead into targets at extremely high velocities. Guns do not, in fact, kill people. They do, however, make it far too easy for people who have one to kill other people. And while there are some people who do have a legitimate need for a gun, decades of historical data covering millions of incidents very clearly establishes that the odds of being killed in a gun mishap (or a gun-related suicide) are several hundred times more likely than the odds of defending one’s self or one’s family with a personal weapon…

All of which brings me to the question: Do we, as business people, have an ethical responsibility to prevent customers from purchasing consumer products that could be used to injure or kill another person, either by them or by someone who has stolen the products? Alternately, do we have the right to tell anyone what kinds of products they should or should not be allowed to purchase, let alone prevent them from doing so by refusing to make and/or sell those products? Even granting that the current gun laws in this country are clearly not sufficient to prevent multiple school shootings every month in America, do we want to have private citizens deciding which Constitutional rights their neighbors should or should not be allowed to exercise? Or should we just make products that people want to buy, offer them for sale at competitive prices, comply with all Federal, state and local laws, and let the people decide for themselves?

It’s worth thinking about…