Tuesday, July 17, 2012

Product Competition and U.S. Politics

I have been thinking in recent years about marketing consumer goods and politics. My theory says that competing products on the consumer marketplace which are most similar and which differ very little in quality or substance are the very products that are marketed most aggressively. Ad campaigns for things like soft drinks, local auto dealerships or domestic beers for example are presented in a way to make the consumer believe that one of these products is far superior and beyond comparison to the other product of its type. Coke and Pepsi come to mind. They are practically indistinguishable from one another, made of largely identical ingredients. Yet based on the intensity of their marketing efforts, either company would have us believe that the other product tastes radically different and is entirely inferior.

There is no shortage of examples of this. Auto dealerships for example are merciless on the local news broadcasts of most major metropolitan areas. To hear them tell it, buying a Toyota at ABC dealer is a recipe for disaster and you're going to save hundreds if not thousands at XYZ Toyota showroom on the other side of town. But the truth is both businesses are working from the same supplier and paying the same price to the manufacturer. Their labor market and overhead are nearly identical, being in the same metro area so there can't be any discernible difference between the price you get at one rather than the other besides a difference based on random chance.

And there are other products whose peddlers spend what must be tens of millions a year to get us to buy a different brand but nearly identical product. The truth is, these extensively and incessantly marketed goods are extremely limited in the variety of choice they can offer the consumer. In addition to centralization and uniform manufacturing processes, there are state regulations on what can and cannot go into a product, what it can be called, etc. that force competitors to offer a product under different brands that are essentially no different from one another.

But perhaps the most exaggerated example is with American politics. In recent years the Democratic and Republican parties have been trying to sell themselves to voters as radically different in their philosophies and budget priorities and attitudes toward everything from health care to crime and immigration.

But the truth is, rhetoric aside neither of them has instituted any policies that are much different from the other. Neither of them, for example will drastically reduce entitlement spending. They may quibble about miniscule government spending on the margins such as educational or job training programs but these arguments are meaningless when viewed against the real threat to American fiscal health: Social Security and the Medicare/Medicaid programs.

As an example, welfare payments to the poor were curtailed under Democratic president, Bill Clinton. Conversely, medicare payments were expanded under Republican, George W. Bush. Yet both the Democratic and Republican parties would have you believe that only the opposing party would do something like that.

Both parties have their outliers, of course. But I suspect that if we took a random sample of legislation and asked American voters to identify which party sponsored or initiated the law, very few of us could (beyond blind chance) determine whether it was a Democrat or a Republican who was behind the bill. Yet they would have us believe that like Coke and Pepsi, the difference between themselves and those across the aisle is night and day.

I call politics the most exaggerated example, less because one person's policies exactly replicates another, but more due to the lengths to which these people will go to distinguish themselves from others whose policies might differ slightly but which in the end support the status quo.

Friday, July 6, 2012

Shift of Allegiance from State to Corporation

I have written about the corporate takeover of our lives but ought to elaborate here. For more information, see the book with the B-Movie title, "When Corporations Rule the World" by David Korten.

We owe support and allegiance less and less to our government and more and more to corporations. Most Americans today know much more about consumption than citizenship.

Among other things is our attitude toward the central collection of personal information. Many of us resist vehemently a national database run by the government of information such as our names, addresses, habits, political affiliations, employers, income, debts, preferences for books and movies, etc. It reminds us of George Orwell's novel, "1984."

But while we resist the collection and maintenance of a file or dossier on our personal lives by government for fear of a dictatorial state, we actively participate in this data collection when we create online identities. In other words, we don't seem to care that Amazon.com collects this information or that EquiFax does. At least, it doesn't stop us from buying products online or participating in the system that allows this data to be accumulated and maintained.

I read a book recently (Life, Inc.) which had a variation on the Toynbee quote that I posted earlier (http://historicalaccident.blogspot.com/2008/09/title-explanation.html) . This one went something like this:

in the past 500 years, since the inception of state-chartered corporations, people have gone from subjects to citizens, from citizens to workers and most recently, from workers to consumers.
In the 1940s and 50s, the United States experienced a wave of paranoia due to anti-communist sentiments in Washington. A U.S. Senator held hearings recklessly accusing public figures of being communist sympathizers and it ruined several careers. It was common in those days to call a communist an enemy of the state.

But today that label would have to be revised. Given that the U.S. Congress and the White House of either party feels that it is their job to keep America employed, the stock market rising and corporations earning a profit, they would likely consider any threat to those efforts anti-American. But today we have a growing simplicity movement which advocates consuming less among other things. And policy makers in Washington, although they may not admit it openly, would consider the voluntary simplicity movement an enemy of the state in that its end result is to reduce consumption and therefore production, employment and investment.

So it will probably become clear in a short time to everyone that we owe our allegiance not to the U.S. government but to the U.S. industrial state which provides us with much more than Uncle Sam does.

Wednesday, June 20, 2012

Alternative Advertising

Advertising is one of my pet-hates, primarily because so many ads seem to treat the viewer/reader as an idiot. Automobiles with names like 'The Magnum' or the 'XKE325' apparently try to appeal to the base emotions that might be more abundant in a nine year old than a grown man.

Of course there are some television commercials which are innovative and humorous, but unfortunately after the first 200-300 views, anything gets rather old.

And some ads are aimed not at buyers of a certain product or service, but at a different audience.

Potential employees is one example. Several years ago Wal Mart ran a television ad that featured several senior-citizen employees who spoke about the variety of activity in their particular Wal Mart and that you never knew what you were going to see at a Wal Mart. The ad didn't mention any of the products or prices or discounts but really featured the working life of a retired and presumably part-time Wal Mart greeter or cashier. It seemed to me at the time that the object of the commercial was not to get people to come in to buy stuff but to get people to come in and apply for a job.

And they were particularly targeting the elderly, part-time, bored, newly retired types who might find it a way to spice things up if they spent 12-20 hours a week earning an hourly wage down at the local outlet. I can only guess that Wal Mart likes these senior citizen, part time workers since they do not require health insurance since the law does not require health coverage for part-timers and that presumably those older than 62 qualify for medicare at some level.


Other advertisements are directed at cultivating investment in a particular company. These tend to be for products or services that don't have a retail market or that appear in media aimed at an adult audience for whom the product might not be appropriate.

Still others feature a corporation's good works and citizenship by highlighting charitable activities and such. Nothing mentioned about the product or the sale or benefits of buying their wares. Only that we're good guys for helping out the disadvantaged in your community or for our activities to restore environmental quality, etc.

In the area of public policy, particularly in the Washington D.C. area there are ads which run during the political commentary Sunday fare by large corporations trolling for government contracts or legislation to protect a certain company's business model. Northrop Grumman and Archer Daniels Midland come most immediately to mind. Almost nobody watching any television show is going to buy a fighter jet except someone who holds a high position at the Pentagon or who reviews military procurement in Congress.

It is said that taxes are an economic inefficiency because that money would be better allocated in the hands of consumers or the private sector generally; governments do just about everything less efficiently than consumers or private enterprise. If that's true I would say the same thing about expenditures on advertisements. Embedded in the price of every product or service, along with the raw materials, labor, insurance, licensing, delivery, warehousing and such is the cost of marketing the thing. And it seems that more and more resources are devoted to this attempt at persuasion which is widely recognized as deception. I'd say that's an inefficient allocation of capital.

Monday, April 30, 2012

Just a Label

[Note: I will use a certain term below which is offensive to many blacks. Of course, I don't mean  to inflame any negative emotions or to taunt anyone but I merely use this term to illustrate an odd situation that  happened to me playing basketball one day. I mention it because I would like to lessen the severity of the objectionable term and hope that this may contribute to that end. If the reader wishes to avoid seeing this term, which is a mutation of the Spanish and French terms for black, negra, then they are urged to discontinue reading now. I have italicized this term in the same way that foreign language terms are italicized under normal editorial guidelines.]

One day in Baltimore I was involved in a game with nine other black guys; in other words, I was the only white guy on either team. And on this particular day, it so happened that I was having a fantastic game. It's something that at some point happens to just about everyone who has a hobby or other game they enjoy wherein practically everything happens exactly as it is supposed to. Almost everyone experiences this: golfers and bowlers and probably bridge players, too and it's nothing more than dumb luck. I am by no means a better player than the nine other guys in that particular game in Baltimore that day, but it just happened that every one of my shots hit the mark--even the most awkward and off-balance of them.

Call Me Al

In 1986 Paul Simon release a song called, "Call me Al." It has special meaning to me because although few people use that nickname for me today, some of those dearest to my heart call me Al. I had a geography teacher in 8th grade who called me Al and in that class was a person with whom I would form a lifelong friendship and whose family would eventually come to call me one of their own.

They call me "Al".

Thursday, April 5, 2012

Term of Endearment on the Basketball Court

You may want to refer to another post on basketball and race, which I wrote as a kind of introduction to these kinds of things.

Back in the 1980s, I was playing a lot of basketball and as always, I noticed a few language trends. One of them was the use of the familiar term, "cuz" by one player toward another. I assume it is a short form for "cousin" but that didn't mean the players had a common grandparent. It was for lack of a better description, a term of endearment. I suppose it could be compared to the 1970s use of the terms, brother or bro. It sounds corny today but people did talk that way back then.

One day I was playing at a particular playground and remember one particular player referred to almost everyone as cuz. He didn't seem to have any discretion or sense of over-usage of slang or maybe he had just learned the term himself earlier that week and couldn't get it out of his head. In any case, I was the only white guy there and waiting for the next game, which I had called. This cousin-of-everyone was in the current game and while I waited for next, I watched and listened out of curiosity to find out that he referred to every player (teammate and opponent) with that term. He offered direction to other players by saying things like, "I'm open, cuz," or "over here, cuz," or "this way, cuz," to everyone in the game.

My experience at that particular court had been that pickup games were normally played until 13 points so when one of the teams scored the 13th basket, I stepped on to claim next game. But they kept playing and the extended-family-guy pointed out to me that the local custom was that the first game to kick off the evening was usually played until 16 points. He said to me, "Game goess to 16, Chief." I wondered briefly why he didn't call me cuz, but it made sense. There was no way we shared any immediate relatives--at least as far as he was concerned.

Friday, March 30, 2012

Limits of Charity


Living in the city, I see quite a few homeless people spending days, weeks, months and even years on the street. As I walk to my office I pass several homeless men, many of whom have been on the same street corner for several years. But in my daily movement throughout my urban environment I also pass many others who I have never seen and will probably never see again.


Like many others, I feel guilty when I avert my eyes or shake my head and silently look at them asking me for a handout. In recent years I have felt more and more charitable but not towards these people. I leave large tips lately, not for excellent service but after I think for a few minutes about the life of the person serving me, their economic status and uncertainty and their obvious desire to have more in their life than the job they have serving me. I have also noticed myself giving more and more to strangers in other spheres as well. But unfortunately the homeless get very little from me.

Why? Well I have thought about it a good deal. If I were to stop and speak to the street beggar I might say that I can give him some money without suffering any perceptible hardship--I have a bank account full of money, after all. And not only can I give him a dime or quarter today, but I could probably give a dollar every day for the remainder of my working life and I wouldn't suffer for it.

But should I? And if I gave a dime or a dollar every day to one gentleman panhandler, which would it be? Why choose one over another?

This may be fuel for the argument that instead of individual, ad-hoc charity, we ought to all pool our money and give it to either the government or to a non-profit to be used in some form of assistance for the poor. Then we wouldn't have to make these decisions on how much, how often and to whom. And further, we can assume that non-profits at least know something about helping the poor get back on their feet and they would channel the money to its most favorable use, eliminating any danger of someone buying liquor or drugs with the coins he saves up.

I brought up this question one time with a man who asked me for money on the street one day. I don't remember exact details but I did say to him that I see half a dozen homeless men every day and that I could give them all my money if I wanted to, but should I? And if not, when? His answer was that I should give when I feel like it, when I feel charitable. I guess he was saying that charity is an emotional decision, not a rational one.