Has Starbucks Weened Itself Off the Growth Drug? On an Alternative Strategy of Intensification over Diversification and Expansion

At one time, Starbucks was golden. “Everything Starbucks did in the past, more or less, had worked,” Howard. Schultz, the CEO, said in an interview in January, 2011 at the company’s headquarters. “Every store we opened was successful, every city, every country.” This led--not inevitably though seemingly so--to a phenomenal intoxicating growth in the number of stores. In 1987, Schultz bought Starbucks, which at the time had just six stores. By 1995, it had 677 shops, and by 2000, when he stepped down as CEO, it had 3,501. According to Schultz, “Growth had a life of its own — and that’s O.K., when you’re hitting the cover off the ball every time, but at some point, nothing lasts forever."  The New York Times reports that after decades of "breakneck expansion . . . tight-fisted consumers abandoned" the megachain's stores during the recession. Starbucks' overreaching under Schultz was thus exposed. Ironically, it was then, in 2008, that Schultz returned to Starbucks as CEO to keep it from becoming the target of a take-over or going bankrupt. Starbucks "ultimately closed 900 locations worldwide and cut $580 million in costs." Fortuantely, by April 2009, "same-store sales, though still down from a year earlier, were finally rising. By the holidays, they had turned positive." In spite of this turnaround, lest history repeats itself, is should be asked whether Schultz had been cured of his taste for the growth drug.

From: "Starbucks"

Godzilla: Special Effects Distorting Narrative

The allure of the technological advances in film-making is particularly pressing in the action genre. Three challenges come to mind—that of how to have the film stand as a metaphor for something that is both good and bad in “real life,” develop a relationship storyline amid the digital effects that enable such tremendous scale of action, and restrain the visual effects lest they manifest as a sort of visual diarrhea. Godzilla (2014) is illustrative of what can happen when a film-maker is not up to these challenges.

From: “Godzilla”

Walmart on Drugs

On June 6, 2014, Walmart conducted its annual stockholder meeting under “scrutiny on all fronts.”[1] Revenue at the company’s stores in the U.S. had declined for five consecutive quarters. Walmart was also facing ethical questions over how the company’s executives handled bribery allegations at the Mexican division, as well as on the low wages going to non-supervisory workers (esp. part-timers). In short, the question facing the management was whether the company was being managed by cutting corners, as manifest both in terms on incompetence and unethical conduct. That the shareholder proposal to split off the chair of the board from the CEO did not meet even a preliminary tally of votes suggests that the company would sooner go under than that its management would be held to account.

From: “Walmart: Where Incompetence and Denial Become Dangerous”

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[1] Anne D’Innocenzio, “Walmart Faces Shareholder Scrutiny at Annual Meeting,” The Associated Press, June 6, 2014.

Margin Call: Survival over Ethics

An unnamed investment bank holding enough of its own subprime-mortgage-based securities on its books to more than erase the firm’s entire market value should those derivatives lose only 25% of their value. What to do? In Margin Call (2011), the CEO, played by Jeremy Irons, makes the call—the firm’s traders are to unload the entire asset class the next morning. Kevin Spacey’s character has two major objections—one normative and the other operational. The marginal place of ethics on Wall Street is well illustrated by how these objections pan out in the film.

From: "Margin Call"

GDP and Poverty: Is Economic Growth the Answer?

From 1959 to 1973, the American economy grew 82 percent, per person. It is easy to assume this is why the poverty rate decreased from 22% to 11 percent.[1] From roughly 1985 to 1990 and then again from 1995 to 2000, heady growth rates are also correlated positively with declining poverty rates. But correlation is not causation. Indeed, had the correlation in the 1959-1973 period continued, the subsequent per capita growth would have ended poverty in 1986. What then are we to make of the relationship between GDP and poverty?

From: “GDP and Poverty: Is Economic Growth the Answer?”

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[1] Neil Irwin, “Growth Has Been Good for Decades. So Why Hasn’t Poverty Declined?” The New York Times, June 4, 2014.

Catholic Social Ethics: On the Free Market and Economic Inequality

In June of 2014, Cardinal Oscar Maradiaga, a “prince” of the Roman Catholic Church, of the free-market system as “a new idol” that increases inequalities of wealth and excludes the poor. Pope Francis had already claimed that personal charity is not sufficient as a remedy—that solidarity with the poor necessitates, in the Cardinal’s words, “dealing with the structural causes of poverty and injustice.” As theorized by Thomas Piketty, that structure includes a tendency under typical circumstances for the rate of return on capital to exceed the growth rate in incomes (and GNP). Faith in the market’s invisible hand and people’s charitable giving do not suffice to counter this tilt. Indeed, Catholic social ethics would have it that faith in perfect competition as an ideal is tantamount to idolatry that operates at the expense particularly of the down-trodden and poor.

The full essay is at "Catholic Social Ethics: The Free Market as an Idol."

The EPA's Coal Carbon Emission Targets: Natural Gas Leaks Through

Coal is the bad guy. At least it is the antagonist in the U.S. Environmental Protection Agency’s 645-page carbon-emissions plan unveiled in early June, 2014. In spite of the fact that the 30% reduction in CO2 emissions from the level in 2005 being set for 2030, critics showed their oligarchic focus on today by pointing to what the current likely costs would be. Electric bills increasing $4 or so a month in West Virginia. Lost jobs—as if the criteria of capital were also those of labor. In short, short-term inconveniences without a hint of the other side of the ledger. I submit that this is precisely the element in human nature that can be likened to the proverbial “seed of its own destruction” in terms of the future of our species. As menacing as such “reductionism to today” is, the assumption such as underlies the EPA’s proposal that coal is the definitive obstacle—and, furthermore—that we are not missing any other huge but invisible danger—is just as problematic from the standpoint of the species’s survival.

From: “What We Know about Coal and Natural Gas: The EPA’s Coal Emissions Targets

President Obama as Legislator in Chief: Missing the VA Fraud

Buffeted with a whirlwind of criticism in the wake of revelations of widespread fraud in VA Hospital and outpatient clinic wait times, President Obama somewhat sheepishly admitted during a news conference on the matter that he had heard nothing of the practice on his travels around the country. With at least one instance of false scheduling at 65% of the facilities between September 30, 2013 and March 31, 2014 and 13% of schedulers being instructed in how to falsify wait-times,[1] it is odd that word had not reached the president’s ear. Maybe this is not so odd after all, for the president’s domestic trips tended to be oriented to campaign fundraisers and speeches oriented to proposed legislation. In other words, the president—and Barak Obama is hardly alone here—put his legislative role above that of his office as chief executive.

From: “President Obama as Chief Executive: Missing the Fraud at the Veterans Administration”

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1. Meghan Hoyer and Gregg Zoroya, “Fraud Masks VA Wait Times,” USA Today, June 3, 2014.

Marx and Rousseau on Economic Inequality

Both Marx and Rousseau are “anti-history” in the sense that socioeconomic and sociopolitical large, complex organization, well beyond the small groups of prehistoric homo sapiens people living a sustenance existence, has alienated workers from themselves (Marx) and introduced artificial, or “moral,” inequalities and inauthentic fronts (Rousseau). In other words, the human condition in the modern world is not a story of progress; paradoxically, things have gotten worse in spite, and indeed in part due to the extent of technological progress. In other words, under the subterfuge (i.e., camouflage) of “progress,” the species has actually acquiesced to increasing decadence and deterioration as human organization has become larger and more complex.

The full essay is at "Marx and Rousseau on Economic Inequality"

Leadership as Defined in a Mega-Church

Leadership is influence. This is the definition that the pastor of an evangelical Christian mega-church enunciated in a sermon that took up nearly the entire service on the Sunday morning of my visit. Parents, teachers, students, and artists—all and many others—the cashiers at Walmart—are leaders, according to the pastor. “You need to get over the hurdle,” he charged, “of thinking that leadership only applies to kings and people on stages.” As influence, leadership applies to virtually anyone—all of us. Populism was the real message. “A kingdom is actually any place of influence,” he added. Everyone is a king in his or her own kingdom by virtue of simply having influence.

The full essay is at “Leadership Is Influence”

Dismembering Time Inc: Delimiting Management

Typically, management is assumed to be a skill or practice that enables a person so trained to work in virtually any company, regardless of what the sector happens to be. A manager is presumed fully able to go from managing a bank to managing a restaurant. Organizing is the common thread; passion for the particular output is not. Yet surely product-specific knowledge and indeed fascination must count for something. This point struck me as I read the ideas of one journalist regarding what should come of Time Inc. once separated from the mother-ship of Time Warner. If the parts of Time Inc. are indeed worth more as parts of different companies than as remaining as a whole, then it is worth asking whether it makes sense to assign each part to a company oriented to the same theme or domain. If so, then the particular theme of a publication, or business moreover, should have some bearing on a manager.

From: “DismemberingTime Inc.: A Critique of the Conglomerate Strategy” 

Opportunity and Income Inequality at McDonalds

In his text, Capital in the Twenty-First Century, Thomas Piketty claims that economic inequality increases societally when the rate of return on capital exceeds the growth rate in national income or GNP. Rather than being an aberration, this condition tends to be the case, the economist contends. To be sure, expanding opportunity can mitigate the increasing inequality, but the “floorboard” is slanted and thus is bound to favor capital over labor. Whereas Marx thought the tendency is unlimited in extent, Piketty argues that at some point the inequality of wealth will stop worsening. This idea seems like Einstein’s thesis that nothing can go faster than the speed of light.  In the light of Piketty’s theory, we can perhaps read more into Don Thompson’s response as workers were protesting the company’s shareholder meeting on May 22, 2014. In short, the CEO illustrates not only a preference for capital over labor in line with ROI>income-increase, but also the weakness in increased opportunity as a mitigating factor.

The full essay is at "McDonalds and Income Inequality: The Role of Opportunity"

Rousseau and Marx: Pushing Back Against Excessive Economic Inequality

Both Marx and Rousseau are “anti-history” in the sense that socioeconomic and sociopolitical large, complex organization, well beyond the small groups of prehistoric homo sapiens people living a sustenance existence, has alienated workers from themselves (Marx) and introduced artificial, or “moral,” inequalities and inauthentic fronts (Rousseau). In other words, the human condition in the modern world is not a story of progress; paradoxically, things have gotten worse in spite, and indeed in part due to the extent of technological progress. In other words, under the subterfuge (i.e., camouflage) of “progress,” the species has actually acquiesced to increasing decadence and deterioration as human organization has become larger and more complex.

The full essay is at "Rousseau and Marx"

The 2014 E.U. Presidential Debate: An Analysis

The election, or selection, of the E.U.’s chief executive in 2014 tacitly pitted democracy at the federal level against the equally legitimate prerogative of state governments to protect their turf through their direct involvement at the federal level. This tension exists institutionally in the European Council and the European Parliament, and in the problematic procedures for how the E.U. president is to be selected. In this essay, I contend that the European project has more to do in terms of how both the states and E.U. citizens both have a role in the selection.

From: "The 2014 E.U. Presidential Election: Some Major Cracks in the Election"

European Parliament Election Results: An Analysis

In the wake of the E.U.’s parliamentary election in 2014, the media reported the results as though a number of “national elections” had just taken place. Unlike the European Council, the Parliament does not represent states; in fact, the representatives of the people do not even sit by state, but by federal-level party, renders the reportage as distortive at best. Moreover, its ideological bent can help us situate the E.U. along the interval of federal-state relations possible in federal systems; this situs in turn can tell us something about the likely trajectory for the Union—the electoral success of the Euro-skeptic parties being only a symptom. To situate the election results, I briefly cover a bit of federalism theory before discussing the election-results coverage itself.

From: “The European Parliament: A National Election?”