Category Archives: News

Market Basket Fantastic.

I was near Boston yesterday, in the western suburbs, and everyone (I talked to, at least) is talking about the family feud that has disrupted business for DeMoula’s Market Basket supermarkets.

This is a family feud, but it also turns out to be a textbook illustration of the perversity of inadequately progressive tax rates and the rapacious nature of those who don’t work who own rights to the returns from those who do.

I’ve shopped in the original Westford Market Basket many times, and as someone who likes food was mostly impressed by lack of the foodie stuff in the store. But what regular shoppers tell me is that the store was customer friendly. Not only did they have lower prices than all the other groceries, but they also rebated four percent of what you bought. And they stocked local produce (that actually was a reason I shopped there sometimes).

On top of this, it turns out, they also had a generous profit sharing program, excellent wages, a program for paying for college tuition and a pension program it was easy to join and easy to collect on.

Not only did the company produce value for its workers, but it also threw off a ton of money for its shareholders.

I didn’t know about the good benefits or the happy workers, until recently, and often shopped at Hannefords and Stop and Shop when I was visiting the inlaws, because those stores had cooler food (more organic, though not more local). But things have changed.

After years of feuding, the DeMoula cousin who is a financial operative has taken control of the company from the cousin who has been a successful retailer. And business has ground to a halt. This fine story from Slate has more details, but doesn’t really hint at the main issue here.

DeMoula’s family business, started in the shadow of the War to End All Wars (the centenary of which we’re now recognizing), has grown into a business worth more than $3 Billion dollars. Some significant part of that expansion was due to the nice cousin’s investment in worker and customer satisfaction.

These investments cut into the bottom line and shareholder reaping in the short term, and the current dispute seems to stem from the dissatisfaction of those who own shares but do no work and who hate seeing money paid to people who actually labor.

The people I spoke with in the Boston area (including some self-described conservatives) seemed to understand that this was a feud between a grocer who recognized the value (and profitablity) of good wages and reinvestment, and a guy schooled in investment who was looking to squeeze as much cash out of cow as quickly as he could. Ouch!

Obviously there is a value to people investing in the products of other people’s labors, but too often this ends up with rich people using money to extract more money from those who actually make the value. Which not only hurts workers, but also strips away the dynamics of our society. We need workers who buy to expand.

The rapacious policies of Artie S. have radicalized, though I’m not sure they would call it this, a broad swath of suburban Boston. But the bottom line belongs to Artie T. It’s better business in the long term to have a well paid workforce than to force them into penury for immediate riches that are there to be gained.

As a society, unfortunately, we’ve allowed the plutocrats (a minute minority) to define the discussion, rather than look out for our own (and, curiously, society’s) interests.

That’s where we can make change.

Climate Change: We Can Fix That.

In last Saturday’s Wall Street Journal, a member of the British House of Lords, Matt Ridley, published a long essay decrying the climate change doomsdayers, namely ecologists who saw time running out with no fix in site. His point was that humans are explorers, inventors, and problem solvers. We are a species capable of transforming problems into solutions, doom into wonder, and we’re working on it right now.

7108618-0-largeRidley sees the doomsdayers as pessimistic and unrealistically stuck on what look like limits (of natural resources, of breathable air and drinkable water) when, in fact, we’ve always (as a species) busted through those limits because of our ingenuity and resourcefulness. This is a reassuring argument, one that also makes some common sense. There are certainly inventions and innovations that will change the world in ways that we can’t imagine today.

Ridley’s goal, he says, is to get ecologists and economists to work together to create innovation that would improve the environment. Sure, why not?

The issue here isn’t Ridley’s somewhat Pollyannaish view of our ability to solve things. Ridley’s argument seems to mostly turn on an optimistic reading of human’s interactions with our planet and its natural order. Where some see excessive nitrogen run-off from farm fields contributing to suffocating algal blooms in our waterways, Ridley sees more carbon-storing green! Our forests and fields are more productive, lusher, able to filter more CO2 because of fertilizer runoff. Okay. Kind of crazy, maybe kind of right. There is also evidence that increased temperatures caused by increased plant growth will outweigh any gains. So maybe not right, but provocative.

It should be noted that there are some serious attacks on the credibility of Ridley and his book, the Rational Optimist, which matter greatly in terms of his credibility as a writer and idea guy.

Even so, I think it is well worth it for scientists and economists to sit down and work on the gains that stand to be made by innovation and technology. Why not? But also (of course) they should work on putting a price on resources that (Ridley acknowledges) cause collateral harm to people and the environment through pollution, and which are also finite resources, like oil and coal. Such a price, in the form of a tax perhaps (but there are other approaches), could be a way to promote conservation, subsidize less harmful energy sources so that they may reach scale and economic viability, and/or to fund research that allows other forms of efficiency to help us make more of what we have, with less pollution and environmental impact.

This is the sort of innovation I would think economists would welcome, generally, but which usually these days runs into a brick wall of political opposition. Nobody wants new taxes, of course, but shouldn’t such economic innovations be on the table? Ridley doesn’t mention them, so we don’t know where he stands.

We do know that in the US a sizeable percentage of climate change deniers oppose the funding of innovations that might address climate issues because, they argue, whatever climate change is happening is not man-made. (In Oklahoma recently a first-of-its-kind bill passed that charges people who install their own solar and wind power generators a fee for connecting into the grid to distribute excess power they generate.) The deniers see the movement to address climate issues as the work of busybody activists who want to appropriate their goods (in cash, in resources) in order to fix what they believe we haven’t put asunder. Their argument seems to be that if we didn’t break the environment we shouldn’t try to fix it. In other words, we should not pursue the innovation and invention and economic incentive that might solve things because we didn’t cause the problem.

Climate change worriers often counter this argument by pointing out the vast number of scholars who believe that some significant part of the undeniable climate change has been caused by industrialization and the CO2 buildup in the atmosphere. Such a consensus is convincing to me, but I don’t blame skeptics for wanting to think about it more. There is certainly some chance that the changes haven’t been man-made, at least not all of them, and that climate change is cyclical, that greenhouse effects are offset to some extent by other impacts, or whatever. There are many theories and avenues of inquiry and argument available, and all should be explored so we better understand what’s going on. But when it comes to addressing climate change issues that doesn’t matter.

What strikes me, and what Ridley (perhaps inadvertently) makes clear, is that it doesn’t matter what is causing climate change and other pressures on earth (he spends a fair amount of time on agriculture and other issues, too). Temperatures are rising and so are sea levels (and so is population), and as innovators and inventors and pioneers, humans should be and for the most part are aggressively trying to find solutions to these problems.

So yeah, get economists and ecologists in the same room, but let’s also get obstructionist politicians who represent the short-term interests of the energy industry out of the way. They represent the real problem, using the straw man argument against anthropogenic climate change as a reason to support outdated energy policies that cost us as a society and civilization ecologically and economically. Let’s let humankind do what it does best, and get to solving the problems.

Lemons for Limes

A number of times in the course of our years living together my wife has been making something that called for a lime or limes and discovered we didn’t have them in the house. The same has happened to me a number of times over the many years, and my reaction is to use a lemon instead, if we have that. Since most of the time the thing I’m making also includes gin and tonic, with the citrus floating in the glass with a lot of ice, I do not get away with this. She says that lemons and limes are very different, and you can’t substitute one for the other.

The news this week of a huge lime shortage inspired the good folks at Slate to run a blind taste test in their office. They lined up workers three at a time, blindfolded them and then gave them two bits of fruit. The video is very cleverly done, features a cover version of Harry Nilsson’s Lime In The Coconut, and a not too significant sample size.

Freedom Tower BASE Jumpers Land, Run, Caught. On Tape.

Three guys, one a construction worker on 1 World Trade Center, broke into the under-construction building last September, climbed to the roof and jumped off (after some profane confidence building). Here’s the long version of one jumper, with an extended getaway after landing in the middle of West Street.

Taking a much less-trafficked path of the third jumper…

Can’t find the video of No. 2.

So, these guys were caught landing on a surveillance camera and somehow the NYPD was able to figure out who they were. A search of their apartments in January led to the video, which is fairly incriminating. Jumping off roofs is illegal, though only a misdemeanor. They were also charged with burglary, a felony, for breaking into the Tower. Undetected, it should be noted.

NYPD said that by their actions they desecrated a sacred place. That seems a bit much, and a hard line to sustain once the building is full of people doing all the things people do when they aren’t jumping off buildings. Still, it does seem pretty reckless to jump off if it means landing on a heavily trafficked road even in the middle of the night, even if the pictures are pretty and compelling.

A Democratic Evening: Last Night’s Food Coop General Meeting

parkslopefoodcoopfrontI’ve been a member of the Park Slope Food Coop since 1999, that’s 15 years this November. Some people hate the coop, some people mock it, but I will tell you that it is an incredible institution, a piece of bedrock that joins disparate communities across NYC because, well, the produce and the prices are incredible.

This comes at a cost. Every member is required to work a shift every four weeks. A shift’s length varies a little depending on the duty, but the standard is two hours and forty five minutes. This can be a problem for those with regular work hours and kids, so I certainly don’t blame anyone for not being a member. But because every member is responsible for a work shift, being a member really brings with it a sense of community. We’re all equally invested in the institution.

That community is large and democratic. There is paid staff, but the coop’s policies are the result of a governance system that allows any member to make proposals and shepherd them to a vote of the members at the monthly general meeting. Despite my enthusiasm for the coop and my admiration for its system of governance, I’d never been to a general meeting before last night.

Some of that had to do with circumstances. There were other community things I tended to that seemed to require me more than the coop did. It was doing just fine without me sitting through a three-hour meeting. And  while one of the inducements to attend the meeting is work-slot credit, you get to skip a shift twice a year if you attend two meetings, I really like working  my shift.

Plus, the big issues that have come up all seemed to have popular support for my side of things. Yes to grass-raised beef from local farmers. Yes to good beer. No to bottled water. Good riddance to plastic shopping bags. Condemning Israel by banning the seven products imported from there was an overreach. But then, a couple of years ago, the environmental committee proposed banning the plastic bags in the produce and bulk aisles that people put food in, and I wasn’t sure what to think.

It would not be reader friendly to go through the backs and forths, the political wrangling, the discussions and arguments that ensued. Better to watch the excellent local sausage makers put together that fine smoked kielbasa in the meat case, if you want to have fun, but please trust me that a lot of smart people spent a lot of time trying to figure out what to do about the coop’s plastic bag use, which is now limited to what are called roll bags, those thin things you put a lot of loose or wet items into.

It’s an issue. The coop uses 2.5 million roll bags a  year. But the majority of these bags are used to buy local fruits and vegetables and bulk products that regular grocery stores don’t sell. Is it better to sell more local and bulk products? We all agree yes. Will we sell less if folks have to bring their own bags? It seems like yes is the answer.

The fantastic thing about the general meeting I attended tonight is that ideas were discussed. The environmental committee made their case with a very slick video, and then people talked about the proposal (and the video—not everyone appreciated its slickness).

There were some points that were hard to understand, and some people repeated something that had been said previously, but by letting 40 or so people speak directly to the meeting about the proposal many aspects of it were described, defined and evaluated. People had ideas that either supported the proposal  or not. (UPDATE: A writer at Slate and coop member, who hyphenates co-op (no doubt correctly), live blogged the event. Snarkier and sometimes funnier details are there.) Hmm, I realize I didn’t say what it was that the environmental committee was actually proposing.

After all the discussion and negotiation, and while they had started with the idea of a phase out of bag use, what they actually proposed was that the roll bags could remain, but that if you used them it would cost you 20 cents per bag.

That’s what we were voting on.

There was some discussion about whether the plastic roll bags made a greater or lesser environmental impact than the alternatives (primarily washing and reusing heavier plastic bags), but mostly everyone agreed that reducing the use of plastics was a good thing.

What ended up being the biggest point of contention was the 20 cents per bag tax. Some of this was a little silly. How would a checkout person know whether your plastic bag was new or used? Some members worried that such a tax would unfairly impact the poorest members of the coop, while others pointed out that the poor are fully capable of living without plastic bags.

The tax clearly violated the coop’s historical markup of all items sold, which is 21 percent of the wholesale price. Each roll bag costs a fraction of a cent, and one speaker said the markup of 2500 percent would be a cruel tax for some.

Everyone who spoke was in favor of reduced use of plastics, but how do we get there? To cut to the end, we voted against the tax on plastic roll bags. For the time being, until a different proposal passes, we will have plastic roll bags at the coop.

I voted against the proposal because the idea of the tax seemed at odds with the way we do things. And better to decide the real issue here than end up with a half-measure that violates the general operational principles of the coop.

So we’re left with this:

If the plastic roll bags are a problem, as the plastic shopping bags were, we should not provide them. Not providing them would still create problems for the unwrapped fruits, vegetables and bulk items, but that’s a problem that each member would have to solve. Maybe some would move to more packaged foods, which would be too bad, but probably most would reuse their plastic bags as best they could depending on their situation. At least the coop would be acting based on its principles.

Or perhaps those plastic roll bags aren’t a problem. Maybe their benefits outweigh the environmental costs. At least if they’re used prudently, and reused as much as possible (which many people already do).

Neither of those options was up for a vote, and so the proposal failed. The irony is that the tax would have reduced bag usage, everybody’s goal.

We know this because the Metropolitan Transit Authority, which runs New York’s subways and buses and commuter trains began last year to charge riders $1 every time they took a new Metro Card rather than reusing their old one. The goal was to reduce printing costs and litter in stations. What has happened, however, is that millions of cards were reused, over and over, and so fewer odd balances (because  you received a percentage bonus on your refills, you might end up with a difficult to use or refund amount less than the cost of a fare) were abandoned on old cards.

So many odd balances were abandoned that revenue from abandoned cards dropped from $95M in 2012 to $52M in 2013. (Don’t worry about the MTA. They expected to save $6M a year in printing costs from printing fewer cards, and that $1 surcharge replaces the abandoned odd balances nicely.)

Money talks. But as last night’s vote showed, it shouldn’t always have the final word.

 

Link: Addicted To Wealth

A young man who earned his way into insider status in the financial industry, compares the compulsion to acquiring money as an analog to other addictions, an attempt to compensate for or avoid some other deeper pain inside.

It’s a cool story, but I doubt it is universally true. But there is something else he realized as his eyes opened that is certainly true:

I’d always looked enviously at the people who earned more than I did; now, for the first time, I was embarrassed for them, and for me. I made in a single year more than my mom made her whole life. I knew that wasn’t fair; that wasn’t right. Yes, I was sharp, good with numbers. I had marketable talents. But in the end I didn’t really do anything. I was a derivatives trader, and it occurred to me the world would hardly change at all if credit derivatives ceased to exist. Not so nurse practitioners. What had seemed normal now seemed deeply distorted.

We need banks and investors, as a way to pay for real things, but the notion that credit “products” like credit default swaps are anything more than a way for the sharps to skim their percentage off the world economy is a sham.

I’m not qualified to know where to draw the line here, but I’m sure that one great injustice we can all line up behind is the fact that income derived from this mostly-worthless churning of money should be taxed at the same rate as income that is earned by labor. At least.  It should certainly not be taxed at a lower rate, as it is now.

Astronomy Wiz Falls Down a Wormhole.

I enjoy Phil Plait’s Bad Astronomy posts that I read on Slate. I’m sure his Bad Astronomy blog is well worth visiting, but I hadn’t until tonight. And I have to say, I love the handmade feel of the site. And I love his enthusiasm for the deep space photos and the climate change fight, and even mathematics.

Which is where this story comes from. Yesterday Phil wrote a story about a mathematical equation that defied description. It’s kind of like the idea, If God can do anything, can he make a rock he can’t pick up? In this case the question was, what is the sum of 1+2+3+4+5….

Those ellipses mean that the sequence goes on forever. It’s a headpounder. If the sequence of numbers is infinite, it seems like the sum of this infinite sequence must be infinite, but Phil told a story in which the sum was -1/12th.

And he posted a video. In which some giggly physicists, highly respected apparently, demonstrate by a series of algebraic transpositions (I’m certainly not using the right math lingo here) that the infinite (which Phil identifies as divergent) series has that value of -1/12th.

I watched the video in the original post and I liked the kookiness, and I loved the way math was a form of play (not something I have any familiarity with), but I didn’t understand how you could just add and subtract these infinite series and make any sense. It all seemed somewhat arbitrary. Despite Phil’s hype of this explanation as mindblowing, my mind was unblown. Good for me, it turns out.

According to Phil’s mea culpa today, you really can’t add and subtract infinite series. Phil got gulled into a bit of pop-math hocus pocus, I guess. He doesn’t call out the guys in the video. But his elaboration on the original post is good-writer magic, and explains why his blog is popular.

I think the bigger issue here is our need to question what we see and hear. Phil Plait is a thoughtful and honest writer with a lot of expertise. He notes that that expertise is not mathematical, but he does love the numbers, so he writes about them. That doesn’t mean he or his source is always right. We need to be skeptical about all claims, especially the mindblowing ones.

And welcome when someone who made a mistake admits it. As Phil did.