Posted on 01/12/2020 6:05:54 AM PST by ModernDayCato
Background: My family has an email list where we share articles and opinions. Someone recently circulated this opinion piece from the New York Times, and I am offering my response hoping for comments from my FRiends.
Who Killed the Knapp Family?
YAMHILL, Ore. — Chaos reigned daily on the No. 6 school bus, with working-class boys and girls flirting and gossiping and dreaming, brimming with mischief, bravado and optimism. Nick rode it every day in the 1970s with neighbors here in rural Oregon, neighbors like Farlan, Zealan, Rogena, Nathan and Keylan Knapp.
They were bright, rambunctious, upwardly mobile youngsters whose father had a good job installing pipes. The Knapps were thrilled to have just bought their own home, and everyone oohed and aahed when Farlan received a Ford Mustang for his 16th birthday.
Yet today about one-quarter of the children on that No. 6 bus are dead, mostly from drugs, suicide, alcohol or reckless accidents. Of the five Knapp kids who had once been so cheery, Farlan died of liver failure from drink and drugs, Zealan burned to death in a house fire while passed out drunk, Rogena died from hepatitis linked to drug use and Nathan blew himself up cooking meth. Keylan survived partly because he spent 13 years in a state penitentiary.
(Excerpt) Read more at nytimes.com ...
No. It is not.
Or rather you need to decide who you are going to make money for, the people who buy and hold or the people who are looking to make a quick buck by buying your stock and sell it in five minutes.
This is where many publicly held companies flounder and fail.
Your first responsibility is to keep the company in business.
Sometimes that means taking a short term hit for a long term benefit.
It means not selling off assets that are cash cows for a one time bump in profits.
It means keeping R&D going and remembering who your customers are and not ticking them off to get back pats from people who would not be caught dead using your product.
It means remembering that institutional knowledge is a priceless asset. Not just looking at what that person makes and deciding you can hire some wet behind the ears kid to do that job for half the cost. And then having to hire some very pricey specialist to fix the process your cheap labor broke.
And it means grooming your successor to thrive rather then setting him up to fail just so you look good by comparison.
You learn these things when you work for large but privately held companies that are growing while the large publicly held companies are nose diving.
Your shareholders who "buy and hold" will be glad of your actions while the short term buyers will be whining and kicking.
Good observations, HTB.
Thank you for elaborating on your ideas. It’s all been very interesting.
I suspect that decision never even crossed his desk. The Whole Foods division is likely being run as a separate division from Amazon and has its own Human Resources department who made that decision. Now, Whole Foods exists in many places where even part time employees are required to be paid a $15 per hour minimum wage, so something has to be cut to be able to afford them. Bye-bye other benefits. The cost of employment has to be worth the employee. This is a grocery business, a traditionally low markup business. There isn’t too much room for other costs from other retail items with larger markups to absorb increases in employee costs.
As for price gouging. I’ve seen that too. But not all items sold on Amazon are sold by Amazon. Quite a few of the products sold on Amazon are sold by what’s called Amazon partners, third party sellers, who offer them and set the prices. . . even ones that compete with products that Amazon itself sells from its own inventory. I’ve seen prices where Amazon is selling something for $10 that a couple of pages later you might see the exact same thing sold by a third party selling for $50. How that person thinks they are going to ever sell it, I have no clue, but there it sits on Amazon at that non-competitive price.
The US Post Office is giving huge preferential discounted shipping rates to Amazon that are not available to smaller companies as well. . . and they are doing the delivery to door services for Amazon shipping that’s done be FedEx as well.
Sears management, along with K-Mart, thought that Internet marketing was a niche, or only useful as a ordering system for in-store pick-up. They missed the online retailing boat completely for stupid reasons, even though Sears had a mail order system that could have scaled to meet it. Sears and K-Mart did not upgrade their product lines even in-store while others did, and became looked on as fuddy-duddy, non-happening stores, again missing the boat.
I recall vividly when Sears switched their inventory and point of sales to a computer controlled system. It was a disaster, a demonstration of how not to do it. Ringing up each item took at least two to three minutes, and each transaction with multiple items could take as long as fifteen minutes as the clerk had to input numerous inventory numbers for each items by hand into the registers. It was tedious. Customers stopped going to Sears.
Mitt Romney was a specialist in company deconstruction. . . but that really does not bother me. Capitalism means the opportunity to succeed and also to fail. Something will come to replace failures. While there are still buggywhip makers in business, there are no major businesses making buggywhips around. There’s a good reason for that. Businesses have to either change with the times or fall away with the times. We cannot subsidize them because their workers will suffer if they fail. There is no such thing as a business that is too big to fail. If I put my mind to it, I can think of probably a dozen major businesses industries that are no longer with us in the past twenty years. Gone completely. Not even vestiges left.
The first one that comes to mind is the store front home video rental business. Another is the VHS and BETA tape rentals that were part of that. Photo developing kiosks. CRT TV tube manufacturing. Music CD brick and mortar chain stores. I am sure we can come up with more. . .
As for Amazon and the government, I read somewhere that the government has more fingers in Amazon’s pie than even Google. I wouldn’t be surprised given the amount of passes Amazon seems to get on regulations.
People keep saying that, but Steve Jobs did not foresee the services that are growing hugely for Apple now. Nor did he have any hand in the development of the AppleWatch which is generating sales in the size of a Fortune 100 company in its own right now. So, no, that isn’t the case.
As for planning for the future, Apple maintains multiple lines of technological R&D for the future to avoid the problems you outline, some in its current product line, and others in lines we know nothing about because they don’t even mention them until the time is ripe. For example, the Apple iPhone did not start out as a phone but as a tablet in 1998. . . And a tablet was not released by Apple until 2010 with the release of the iPad. . . While the iPhone came out in 2007.
In all this sympathethic story of multigenerational dysfunction, I recall no mention of the father of those original five kids, or the father of the failed granddaughter Amber's kids.
I have long admired Kristof's persuasive writing; but persuasion is a curse when he uses his gift to mislead. Radical lib/prog globalism is what foisted NAFTA and other offshoring of American manufacturing, depriving the working class of its way of life during the working years of the original Knapp children; yet he overbraodly blames "captitalism" instead of the corruption in DC that saw both parties collaborate to redefine our economy around shareholders instead of families and profits instead of patriotism. Kristof's solution is to covet the soul-numbing socialism of Canada and Europe.
I read here on HR, of a dishwasher at a restaurant who made $14000/yr begin approved for a $420000 "liars' loan".
Housing prices doubled right before I went to buy a house. I knew people at work, who told me that another house on their block, same builder, same model, went in price from $150,000 to $300,000 in a 1-year period.
When I did buy a house, all the "vast oversupply" of houses, were for structures which should have been condemned: cracks in the foundation or walls, major water damage, mold growing throughout the foyer and family room. Homes which had been bought (I presume) on liars' loans, but which the bank didn't want to mark to market to sell, lest it affect the book value of their remaining portfolio.
I have long admired Kristof's persuasive writing; but persuasion is a curse when he uses his gift to mislead.
This is a bait-and-switch narrative.
The first two paragraphs falsely lead us to believe this was an idyllic happy family and later in the piece it's 'revealed' the REAL cause of their downfall is society and an uncaring, heartless economic system that chews up families and spits them out.
The problems in this family are found within this family. Families went through the Depression and survived intact because the parents maintained stability and taught their children how to be upstanding individuals.
Who Killed the Knapp Family? Self-centered parents who cared more about their own drug use than they did about rearing morally upright children.
Many good points and I agree with you. One of your most salient is the fact in the last 50 years we have spent over $22 Trillion on the Great Society programs and for the most part they have been a failure.
Yet idiots out there want Reparations and for what? We have paid reparations out the wazoo and have nothing to show for it. There is just nothing left to do. Let these people sink or swim.
I agree with you regarding the speed of change.
Industries that employed people for decades disappeared overnight and new companies come and go in a blink of an eye. This is part of the great upheaval leading to social and economic instability. Innovation is accelerating (think robotics) and things will likely get worse for some people who can't readily adapt to the rate of change.
But at the heart of this NYT story is a dysfunctional family that failed their children. The Depression caused dramatic social, political, and economic turmoil but most families didn't collapse under the weight.
I think you gentlemen have the dates wrong. Nicholas Kristof, the co-author, was born in 1959, and he was in the same grade as as the funny-named Knapp brother with the Mustang, which must have been 1975-76.
This is one reason I’m having difficulty seeing the relevance of economic trends or tropes of the last thirty years: because the key events occurred much longer ago than that.
The key events of the 1970s were not modern investment capitalism or the mass incorporation of Mexicans into the U.S. economy and entitlement structure. H1-B tech guys from India and Pakistan weren’t even dreamed of.
The counterculture revolution and the coincident (causes and effects not entirely clear) Vietnam War were the critical events when the Knapp family was misplacing its father, not graduating from high school, taking up drug dealing, and all the rest. IN THE 1970s.
I agree, thank you for pointing it out.
However, for the "general case" of *Deplorables* ("bitterly clinging to their guns & religion" as 0moeba said)...
Dislocation/displacement was the intention all along.
Putting your points in a period of the last 20 years or so is definitely a stronger case.
I have siblings and their families living west of the Cascades. Most of them are druggies. I love them because they are FAMILY. But they too blame their ‘circumstances’ on everybody else.
Then the crash would have been the hyper inflation of the late 70s. . . with similar impacts on the building trades.
Not all of human existence is adequately covered by what is in the law books or in historical precedent; there are such things as externalities.
In other words, some things may happen to be moral even if they are not legally required.
Other things are legally allowed, but they sure are immoral. Such as the corporate raiders and the Romney types.
You say that your comments don't represent social justice. Okay...what are they then (in other words, how am I incorrect in making that statement?
SJWs are as ruthless in their own way, as the corporate raiders; and, like the raiders, they don't seem to care who gets hurt as long as they get their way.
What I would prefer to both those extremes, is where the corporate executives stop listening solely to the bean counters: examples of this going *wrong* would be the internal memos coming out from Boeing about the 737 Max, and shaving costs and not allowing regulators to know about potential issues; or the classic case of the Ford Pinto where the problem which allowed fuel tanks to explode on rear impact, could have been fixed for $19 / car.
An example of it going *right* would be an instance of the Chick-Fil-A before the recent brouhaha in the news, where they remained closed on Sunday because of the owners' conscience, even though they could have made a lot more money being open on Sundays.
Now I'm a corporate raider? Tell that to all the employees I kept on when I didn't have to. The people I overpaid because they needed the money. The fact that I was always paid LAST after my employees.
Ah, so my concerns *are* valid. You are now pointing to the things you did which show that you don't just shaft everyone to get that last 0.000003 cents/transaction, net costs.
Why is you went so ballistic at first then at my attacking corporate greed? You could have led off with how you treat your employees, and either lamented your ability to affect the $5000 suits in LA and New York, or mentioned what you were doing to help persuade them to change their behavior.
(It comes to mind as I type this, that one difference is that Chick-Fil-A, and (presumably) your firm, are privately held; whereas many of the others are...well, no. The Bain Capital and other types, take companies private in ORDER to strip mine their assets. So it's then a matter of whether you are trying to grow your firm organically, rather than growing your own wealth through ...you know, legal fictions. The problem with using the law as the guide, is that in the famous words, "the law is an ass" ; and also, that the laws are written by politicians, who all too often are bought, lobbied, or blackmailed to favor those who have already made their packet, and have an engorged desire for even more wealth, or just to feed their pride.)
Case of pride was a famous battle over a piece of land which Best Buy in Minneapolis wanted for their headquarters; they tried to lowball the former owner of that land and his pride got hurt, so both sides ended up spending more than the sale price of the land, just in legal fees. There's no way in this world or the next, that that benefitted shareholders in any way, shape, or form. Or you can look at Jack Welch's retirement package ($2 million/year for life. That is raw, naked, unspeakable greed; and given how GE has fared since he left, it appears that a lot of their stock price rise was done by manipulating earnings in order to *just* beat Wall Street guidance; and by eating / hollowing out seed corn in order to focus on financial chicanery -- with its lower overhead -- than on producing products...oh, and by manipulating and stampeding politicians into the "need" for Green Energy like ...windmills.)
I don't work at McDonald's. I don't even eat there.
Changing the system is currently almost impossible, except for those who already have money and influence. The politicians will give you a form letter which does not even address the substance of your concern, unless you first give them a large campaign contribution; or lobby them, which means wining and dining and providing them access to sexual services on the side.
And you are clinically insane if you think I have even the slightest shred of Communistic tendencies.
The GDP figures compared to taxes and cost of living are not prattle. The bulk of the money has been taken by God-knows-who: if the GDP has quadrupled, and the population has doubled, but wages remain stagnant, then ceteris paribus wages should have doubled. But they haven't. That's not Communistic: it is not demanding government dictation of the means of production. But it is pointing out that the concentration of more and more wealth, in the hands of fewer and fewer, IS both greedy and immoral. I like how (for example) Microsoft, or Silicon Valley companies, demand that they cannot exist without H1-Bs to hold down wages: and yet Microsoft once had a $51 BILLION special all-cash dividend. That dividend, means, management didn't have any idea how to grow the business profitably with that money, so they might as well give it to shareholders (meaning, a disproportionate share to themselves, as executives tend to be awarded with stock options, and therefore, stock.)
But if they'd put that money into state bonds (Constitutionally free of Federal Income Tax), they'd have thrown off a billion a year in free cash flow: without touching the principal or jeopardizing cash flow from continuing operations. They could have paid ALL the US citizens' salary differential from that.
And the principal, still would've been in the control of the company, not dispersed.
(Did I mention the last time I checked, Microsoft had a profit margin of 57%? Coca-Cola, by contrast, is around 10%, and they compete just fine. Who else writes Office, Outlook, Powerpoint, Word, and Excel?)
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