business news in context, analysis with attitude

We had a piece the other day about how Chipotle Mexican Grill, which long has bragged that it does not sell beef treated with antibiotics, is changing its tune a bit and now will sell "meat from cattle treated with antibiotics because of an illness," though it still will not "use beef from animals that had been given antibiotics to prevent disease."

Which prompted one MNB user to write:

So now it's not the "what" that matters, only the "why"?  What a creative distinction.

The "why" always matters, IMHO. Doesn't mean that the "why" always justifies the "what," but I think that thinking people always consider the context of a decision as well as the decision itself, just to have an understanding of the bigger picture and maybe even some compassion for the people making the decision.

If you consider only the "what," and not the "why," it seems to me that this propels you down the road to ideology, which is just a substitute for actual thinking.

Yesterday, Michael Sansolo had a piece about the importance of listening to new ideas, no matter how unlikely, because that's often how we discover the next great innovation; it is critical in any business to not defend the status quo. And I added that it is important to keep in mind "The Old Fart Rule": The likelihood of an innovation succeeding increases exponentially with the number of old farts who refuse to endorse it.

MNB user Elaine Howard responded:

You had to know when you said “old fart” that some old fart was going to take offense! I love what you’re saying, but as an industry veteran of 30+ years, I prefer the term “Stink Think”. There are some people, yes, even among the energetic and very wise Millennials, that are nonetheless always the Stink Thinkers. In fact, stink-thinking permeates every age group. I think it’s more due to people settling in to their comfort zones too readily. Some of that comes with age and some of it comes from laziness or lack of imagination, lack of drive, fear, and/or lack of the right corporate culture or corporate sponsor(s) to support their voice.

I'm perfectly happy to stipulate that "old fart" is a state of mind, not age. Though I also would argue that as one gets older, it becomes increasingly critical to fight the "hey you kids, get off my lawn" impulse.

MNB user Laura Whisney added:

All I could think of when I read this article was that America is in trouble with so many old farts in Congress – not forward thinking and unwilling to innovate.

We've been focusing a lot here lately about how changes in the print media business - the sale, in three days, of the Washington Post, Boston Globe, and Newsweek - reflect greater business realities and what we can learn from them.

Which led MNB user Brian Blank to write:

Apropos of not much…do you know how Lou Grant ended up as producer of the WJM news on "The Mary Tyler Moore Show"? He left the newspaper business because he got fed up with all the mergers. (A new axe-wielding station manager was scapegoating Lou, because the sales department “can’t sell the news”.) This was an episode from 1971 that I was watching on DVD last night.  Just kind of made me think about how things haven’t changed as much as we might think.
PS: loved the clip about the digital version of the SF Examiner.  …and it just hit me:  that news report aired 10 years after the above MTM episode.  PPS: The book “Mary and Lou and Rhoda and Ted” gives a ton of background and behind-the-scenes about the show and how it came to be—lots of insight on assembling a great team to turn out a quality product.

Not to get too deep in the weeds here ... but let's not forget that once "The Mary Tyler Moore Show" ended, Lou Grant (Ed Asner) went off to Los Angeles to become city editor of the Los Angeles Tribune, returning to his print journalism roots. "Lou Grant" was a great TV series ... and I can remember watching it while working as an actual newspaper reporter and thinking that it pretty much got things right.

On the subject of fair wages, minimum wages, and living wages - and specifically, a New Yorker piece by James Surowiecki that I linked to ( click here to read it), MNB user Ray England wrote:

Amazing, it seems that Mr. Surowiecki believes that the companies that employ the vast majority of part time workers make plenty of money, even at the low margins in which they operate, they could increase pay rates, they would just have to steadily raise prices to do so. As for consumers, well they would just have to get used to higher prices. What? Really? So just how are folks making low wages supposed to be more prosperous if prices go up to support their wages?

To illustrate the fact that employment in our economy has shifted from large manufacturing companies with lots of full time workers making relatively high union wages to a present day economy where companies like Walmart, McDonalds and the like employ the vast majority of workers…on a part time basis. Mr. Surowiecki goes back to the 1960’s when the big three auto companies had no problem paying their employees a great wage; after all, they were very profitable. I find it odd that there is no discussion on how the majority of afore mentioned 1960’s power house employers have gone belly up, not even a hint that in part, unfunded 1960’s union pensions had huge negative impact on those companies. But I guess that is beside the point.

What is missing from Mr. Surowiecki’s illustration of our countries employment shift from manufacturing to service is the why! He does however; have a solution. More Government Spending! To the tune of at least a Trillion dollars on infrastructure, increase the minimum wage, strengthen social-insurance, and expand the earned income tax credit. In other words, more government spending, but hey what’s a few more Trillion? As Dr. Phil would say…How’s that working out for you?

In my opinion, a Socialist Utopia where Government manages every aspect of everyone’s life is not the answer, it is the problem. There is no doubt that our economy has transitioned from a manufacturing to a service based economy; but why? It’s not that difficult to figure out.

What happens when huge manufacturing companies can offshore manufacturing to countries with lower wages? They do.

What happens when these same companies can do business in countries that are tax friendly? They move there.

What happens when the cost of doing business and obligations to retirement  funds outweighs a corporate entity’s ability to generate enough profitable revenue to cover those obligations and costs?  They go bankrupt (except in the case of GM or Chrysler where the government bailed them out.)
What is the overall impact on domestic manufacturing jobs when companies can produce goods in other companies and ship them here cheaper than they can make them here? Manufacturing Jobs disappear.

Now it seems that logic would dictate that manufacturing jobs (where people make things) would produce an economy where there is A: More investment in infrastructure, and B: Create higher paying job opportunity. So how do you get there?
First; how about making the US the most tax friendly country on the Globe? What happens? Companies would move back to the US in droves…..If I can cut my tax obligation in making widgets from 40% to 10%...I’ll do it all day long. Over simplified answer, but it would work.
Want to see what happens when production booms and capitalism rather than socialism takes root? Just check out North Dakota where your average Walmart starts folks off at $17.00 an hour. Why, because due to their oil boom, unemployment is less virtually nonexistent.

I don't think that Surowiecki was arguing for a Socialist Utopia, though I imagine that it is easier to demonize an argument by using such a phrase. I think he was just pointing out some structural problems with the economy as it currently exists.

As for government spending, you are right that he seems to advocate the notion that "the government should invest almost a trillion dollars over the next five years in repairing and upgrading the national infrastructure." But I'm not sure that private companies are going to invest in the roads, bridges and other public venues that desperately need upgrading and maintenance; if the government doesn't invest in such things, who will?
KC's View: