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Death Spiral
Brooklet Correspondents
Last comment by Bryant 1 year, 8 months ago.

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I have been considering this blog for a few months, but yesterday’s trip to the grocery store made me stop and think.

We went to pick up “a few things.” The bill was over $150. As we discussed this on the way out the door, we determined that the only thing we bought that cost more than $10 was a large box of trash bags. The rest of the stuff was $3-$5. A little quick math and I realized that a person can barely get through the express checkout (20 items or less) without spending $100. Why are prices so high??

I am sure there are factors like increased wages and transportation costs, but the one thing I hear more than this is “the bottom line” or “increasing investor return.” If I may be so bold… when did the ‘investor” become more important than the “customer?”

I comment on here frequently enough for folks to know I am no anti-capitalist. I understand the role of an investor and I understand the investor’s expectation. It is a commercial company’s board of directors and CEO that I have an issue with. It is not just a matter of customer service to greet me at the door and wish me a nice day as I leave. It is keeping the price of merchandise reasonable.

I bought a box of microwave popcorn. The first brand I reached for was the same price as the rest, maybe a little more. Then I saw that it only came with 2 bags. 2 BAGS?? For THAT price?! Clearly, that company does not intend to sell me any more popcorn. I know corn prices fluctuate. I know fuel costs are up. I also can surmise that a single bag of popcorn probably costs less than 30 cents, and when they sold 3 bags for $3, the company had a good margin per bag. Now that they sell 2 bags for $3.50, their margin must be off the chart!! This is great news for the stockholders and the CEO, etc. But, now they have one less customer. If that trend were extrapolated out (raising prices and dividends but losing customers), the company would eventually fail – hurting everyone in the process.

The same principle actually applies in sports and politics and nearly every other facet of life these days – take all you can, while you can. It is a false premise, a death spiral, and a boom and crash cycle that cannot be sustained. Don’t they see it? Does anyone see it, because it’s not just business. It’s almost everyone, in nearly every capacity.

I must be hopeless out of date, because that is just not me.


Latest Activity: Feb 04, 2013 at 7:28 AM


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wildturkey commented on Tuesday, Feb 05, 2013 at 22:05 PM

i went for eggs and milk the other day and came out with a bill of $112......
i feel your pain......

theflyonthewall commented on Wednesday, Feb 06, 2013 at 08:23 AM

It would be interesting to study the contribution that bloated CEO salaries and corporate lobbying make to the general inflation rate. Consumers should also protest the low quality of the food they buy.

Bryant commented on Friday, Feb 08, 2013 at 11:21 AM

Charlie, a very complex and aggravating situation. You can blame Milton Friedman for (more or less) espousing unrestrained capitalism so the the captains of industry focus on the bottom line only - customer satisfaction counts only as it impacts the bottom line. Never because whatever increases customer satisfaction might happen to be the "right" thing to do based upon some moral compass.

You can blame the consumer for wanting fresh apples, tomatos, and other produce year round.

You can blame the major marketers such as Wal-Mart because their power is so great they tell manufacturers and suppliers what they want and what they'll pay for it.

You can blame manufacturer's who make processed food products because that's where the profit margin is. And they market them incessantly. Think Doritos, Marie Callendars, Hot Pockets.

You can blame society as a whole when Americans are working more hours, both parents -when there are two - are working or single parent households with limited incomes use processed meals for the sake of time and convenience.

Hell, I guess we can blame just about everyone and everything. And it is a most distressing situation.

theflyonthewall commented on Sunday, Feb 10, 2013 at 09:48 AM

Blame a "free market" that is anything but free. Blame a supine electorate that underwrites the status quo.Blame a government that is for sale.

Bryant commented on Sunday, Feb 10, 2013 at 10:06 AM

Fly, I don't buy my food from the government. And if the public doesn't buy it, the "free market" will cease to provide it. And is this the same "supine electorate" that re-elected the President?

theflyonthewall commented on Sunday, Feb 10, 2013 at 13:02 PM

Bryant,

I was referring to monopolistic practices that serve no one. By the way, a recent editorial by George Will railing against banks too big to fail would indicate that he is in my corner on this one.

A non-supine electorate would push Obama a bit more. Obama is no socialist,despite the smear by right-wing bloviators, but rather a Nixon Republican. I would prefer to see less Nixon and more Roosevelt. Most bloggers here would disagree with me,but I feel a more aggressive approach is needed to deal with the many economic and social issues we face today.I might add that Roosevelt was also not a socialist despite the claims of modern Sewall Averys.

The Republicans lost because Republicans said and did a lot of dumb things.They fielded a weak and unappealing candidate. They shot themselves in their collective feet and continue to do so. My guess is that the Bushmaster is the weapon of choice.

Bryant commented on Monday, Feb 11, 2013 at 11:31 AM

Fly, I buy into your reference to the monopolistic practices in the food industry. One only has to look to Monsanto's treatment of farmers growing their patented soybeans.

And I too would push Obama more. But I would be giving him a big push to put some budget cuts on the table in Medicare, Medicaid, and Social Security. All the other areas people rant about - foreign aid, PBS support, ad nauseum - amount to a pittance in the federal budget. These three programs, with defense, make up the preponderance of federal expenditures.

Back to food - the elimination of local suppliers in the food supply chain has greatly reduced the quality of retail food. And I realize we still have local farmers' markets and other small scale providers.

But, while in college I worked at a slaughterhouse. We provided meat to local groceries in a 15 county area, to restaurants, and even had retail sales. There are hardly any local meat processors any longer.

I worry not only about cost but the rapidly dwindling biodiversity of our grain crops.


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