WAL-MART BUYS JUST LIKE OTHER CORPORATIONS

By Bob Confer, www.BobConfer.net

Those who are against Wal-Mart more often than not cite the corporation’s buying practices as its Number One evil. To perpetuate their argument they use the closing of Rubbermaid’s Wooster, Ohio plant to make the point that when Wal-Mart flexes its muscles people suffer. Wal-Mart was unhappy with Rubbermaid’s constant price increases and thusly pulled from their shelves certain Rubbermaid products. We are led to believe that only because of that ongoing situation the plant was shuttered in 2002, leaving 1,000 people without a job. 

It’s tragic when a plant of that size and stature closes, especially in a city of 25,000 people. Nevertheless, they shouldn’t be used as martyrs against Wal-Mart. The whole story really needs to be taken into context.

Wal-Mart really had little to do with Wooster’s demise. At the peak of the relationship, Wal-Mart was only 20% of Rubbermaid’s sales. Not being able to adjust to a shrinking or loss of a customer that size shows there was a much larger problem at Rubbermaid, namely corporate management. In a five year period during the 1990’s then CEO Wolfgang Schmitt and his crew made the once-great Rubbermaid a laughingstock on Wall Street: It lost 24% of its value while the S&P 500 Index went up by almost six times that amount.  Many analysts stated the company was improperly managed with no attention to being lean and mean. Despite far too many divisions and products they were not very responsive to customers’ needs and seemed to be peddling old, tired products while at the same time never focusing on streamlining their internal processes. These problems (oversizing and staleness) are encountered by many businesses that address the problems to live another day. But Rubbermaid chose not to. So when Newell bought them out it was up to the new management to do what needed to be done, shed some waste and maximize operations.

What makes this all so ironic is that for decades (prior to Wal-Mart even becoming a powerhouse nationally) Rubbermaid utilized the same sort of buying tactics that Wal-Mart is guilty of. It was always a common belief throughout the plastics industry that those who would manufacture for Rubbermaid were selling their souls and were destined for failure. In many cases, it was true. Too many plastics companies put all of their eggs in one basket for Rubbermaid and closed shop after Rubbermaid left them for a cheaper supplier. Other companies suffered significant losses by trying to sell at the dollar value Rubbermaid wanted and not at a level that provided the manufacturer appropriate (if any) profit.

Buying at low prices and holding vendors to rigid demands is not unique to Wal-Mart. Or Rubbermaid. It’s an outcome of a large corporation mentality. Once corporations gain a sense of grand scale ($1 billion?) and distance themselves from the principles of their founders, this behavior takes over because the board and management are in an endless struggle to please everybody (stockholders, distributors, consumers, business partners) and they look for pennies wherever they can get them.  

No market sector is free from such practices and it could easily be said that the automotive industry is even more insatiable than Wal-Mart could ever dream of being. The Big Three browbeat their Tier-One suppliers who then have to beat on their suppliers creating a very bad business model where the only one who does well is the one at the top: they can sell their cars at the price they want while the suppliers can’t sell the parts or components at the price they need. It’s because of this that many automotive suppliers have gone by the wayside over the years, mirroring what happened to the one-time Rubbermaid suppliers.

To verify what we always knew to be true, my company quoted some products for a Tier One supplier in 2007. During the process they said they required a 4 or 5 % decrease in their cost every year, a “normal” request in the auto industry. It didn’t take much thinking to turn away their business, indicating in our letter to them that no business can logically accept such demands with resource and materials costs continuously skyrocketing.

Their purchasing manager politely and knowingly replied with, “I appreciate your honesty.”

I would appreciate some honesty, too, out of those who find fault with Wal-Mart’s buying practices, which are no better than the rest: If you choose not to shop at or allow Wal-Mart in your neighborhood, do you feel the very same way about Ford or GM? 

From the 21 January 2008 Greater Niagara Newspapers

GAS PRICES: A TAXING SITUATION

By Bob Confer, www.BobConfer.net

If there’s anything we’ve learned over the past few years it’s that high gasoline prices have been caused by evil, greedy corporations. They are abusing American consumers, knowing that we’re a captive audience and we’ll pay what we have to for their product. So, they are making sure we do just that, squeezing every last penny out of us.

This far-too-common belief is awfully far-fetched because oil is not sold solely to - or in - the United States. It is a global commodity sold in trade markets the world over and its price is determined by factors of global supply and demand, the former not growing at the same rate as the latter. Escalating prices have very little to do with the avarice of the board of directors of ExxonMobil and everything to do with the oil addiction Americans now share with the rapidly-growing consumer classes of developing nations.

Politicians know this but waxing scientific about global economics does little or nothing to grab the attention of consumers and ultimately win their votes. We live in a “60 Minutes” world where sensationalism and over-exaggerations dominate discourse. Many slick elected officials have chosen to play those cards and wildly point the finger at “Big Oil” because one, it represents an easy target and two, the populist tendencies of the accusations really bring in the votes for the alleged heroic legislators who are supposedly looking out for the little guy. We see this all the time at the state level (such as Manhattan assemblyman Bing’s assault on “gouging”) and from our federal representatives like Randy Kuhl (another gouging fan) and Chuck Schumer (who seems to host anti-oil press conferences every month). 

This grandstanding not only helps maintain incumbency but also puts up a stellar smokescreen that masquerades the incomprehensibly-greedy actions of our own government. They would prefer that you not know that the cumulative effect of the taxation of gasoline at the federal, state, and local levels adds considerably to the burden that the growing base resource costs have our pocketbooks. Interestingly enough, if you transposed “politicians” for “corporations” in this column’s opening paragraph it would be factual.

If you’ve traveled outside of New York State you see this in black and white. Gasoline costs more, a lot more, in the Empire State. During a business trip to Ohio last week I found gas consistently around $2.89/gallon in the Buckeye State while back home it was $3.29. Think about that: For every 10 gallons that we buy, we’re paying $4 more than they are.

New Yorkers are paying 40 cents more for every gallon versus what drivers in a nearby state pay because - as we’re so accustomed to across the board - we are highly-taxed.  We pay the highest total gasoline tax in the nation, a collection of excise, spill, state sales and local sales taxes. Our officials also reap an unusual and devious benefit by taxing the federal gasoline tax (18.4 cents) as a component of base cost, meaning double taxation occurs. When it’s all said and done, we’re currently paying 65.3 cents in taxes for every gallon of gasoline. Yes, 20% of what you are paying at the pump gets handed over to the government. Twenty percent!

This only looks to get a lot worse. Last week a congressional commission issued a recommendation that starting in 2009 a five-year plan be instituted in which the federal gas tax would increase by 40 cents and then receive annual upward adjustments based on the rate of inflation. Granted, this is only a recommendation, but the rate has not moved since 1993 and the Federal Government has never been an entity to remain static or turn down a tax increase.

Gasoline taxes (present and future) are all so very frustrating and contribute to the high price of gasoline and, quite truthfully, the demolition of our standard of living. Sadly, most people don’t see this and never will because our “leaders” purposefully stay away from any detailed analysis of the cost structure of a gallon of gasoline and push the blame onto other parties. The politicians play us like fools, diverting attention away from meaningful study of the issue at hand, study that would show “corporate greed” is something readily found in the halls and House floors of Albany, Washington, DC, and all capitols in between. 

From the 14 January 2008 Greater Niagara Newspapers

THE REAL STATE OF THE STATE

By Bob Confer, www.BobConfer.net

When the head of an executive branch gives his “State of…” address you often find yourself saddled with a sense of patriotism for that leader’s bailiwick. Presidents, governors, and mayors act as community salesmen during these speeches, selling you on the wonders of their domain as much as their job performance. The bad that has occurred or the blight that exists is glossed over and the leader focuses on nothing but the good that has happened (or what he thinks will happen) under his watch. The audience gets caught up in the moment of the speech and is overcome with civic pride.

As time passes and the audience (be it taxpayers, press, legislators) has a chance to reflect, it quickly becomes apparent that they were misled and the address was nothing more than a pipedream.

This same high and its crash apply to the State of the State Address that was delivered by Governor Eliot Spitzer last week. A look back at his speech finds that it is fraught with mistruths about the past year and optimism for future years that is lacking in backing.

First off, he did admit that that his “differences attracted more attention than agreements” when it came to working with the legislature. But this disconnect – based in Troopergate, Choppergate, and the drivers license debacle - was mentioned only briefly. These volatile issues defined Spitzer’s first year and merited much greater attention in his speech. After all, these issues destroyed any semblance of teamwork in Albany, created an insurmountable logjam in legislative proceedings, and caused Spitzer’s approval rating to tank, going from his 70% electoral victory to a rating that was consistently below 30%. A true leader would have talked at length about what drives his leadership style, how he handled the drama, and what he plans to do to address these monstrous dark clouds that hang over his/our heads. The state can move forward only after the man in charge assumes sensible responsibility and gets people to believe in and follow him. 

That brief statement segued into a short ramble about how the executive office and both houses working together brought about change to workers compensation, Medicaid spending, and budget reform. Never mind that most of that occurred in Spitzer’s first two months and were remnants of the Pataki era that should have been passed years earlier but couldn’t because one or two of three powers threw up a roadblock based in party politics. With the Democrats taking the executive throne in January it magically “balanced” out that situation and those reforms passed. It was a too-little-too-late win for NYS taxpayers because it was a perfect indication of how divisive two-party, upstate vs. downstate politics have hung our residents out to dry.

The greatest volume of Spitzer’s speech focused on his wish list which may sound good at first but, when you look at the underlying ramifications and costs, is quite nightmarish. He feels that higher education is due $4 billion in new funding, money he thinks will magically come from the state lottery system. Speaking of youth, he wants the state to fight childhood obesity. Philosophically, it’s a worthwhile cause, but realize parents, teachers, and the media and medical sectors have failed in this endeavor, so how can a state government (gluttonous and oversized itself) correct the situation? Some say his fat-busting plan will cost $380 million.

The crown jewel of Spitzer’s speech was his focus on taxes. He wants to increase property tax relief, enlarge STAR, and cap the expansion of property taxes. Those are things we all want and deserve. Yet, if they (Albany) want to talk the talk they had better walk the walk: early budget drafts show a deficit of $6 billion. This massive hole can only be rectified with higher taxes, so Spitzer’s speech appears to be baiting us with the false hopes of lower taxes while the he and the legislature spend frivolously.

This all proves the Governor’s address was a study in promotional politics. Spitzer’s high hopes and lack of attention to the true Empire State advertises only the small amounts of good perpetuated by his system and, in a way to save face, truly ignores they harsh reality of overtaxation and associated decline that we try to overcome every day.     

From the 07 January 2008 Greater Niagara Newspapers

PROTECTING YOUR CASTLE WITH FORCE

By Bob Confer, www.BobConfer.net

A common urban legend says that if you shoot an intruder in your home you had better put a knife in his hand to reinforce your claim of self-defense. Mythical sensationalism it may be, but like most legends it has some basis in fact and to some extent many believe it to be sound advice.

It does seem to have merit when one considers the preferential treatment given to lawbreakers. In the majority of the states – New York included - you cannot use deadly force to protect yourself, your family or your property unless you make some accommodations for the invader. Even though the perp obviously does not have your best interests in mind, you must afford him a considerable level of respect and safety with your “duty to retreat”.

Duty to retreat laws (or standard-setting court rulings) require that the homeowner prior to exerting any sort of force, deadly or otherwise, must do everything in his or her power to avoid conflict. Basically, the clause demands that the victim forgo acts of survival by not reacting immediately to the intruder’s intent to harm. The homeowner must at first resort to cowardice by seeking retreat and then the situation must escalate to the point that the courts see “reasonable” belief that injury and death could occur and then, and only then, can the resident take up the measures necessary to suppress the attacker.

Such laws put all the power into the hands of the thug and strip the victim of natural rights which include the ability to survive. The fact that the attacked cannot draw an arm until the situation has reached its critical mass is utterly absurd. Those seconds or minutes associated with having to hide from a criminal can be the difference-maker for the physical safety, sexual safety, or even life itself of the person whose home or apartment has been invaded. Dropping your defenses puts the one on offense at the supreme advantage.

Realistically, a law-abiding citizen has no understanding of what’s going through the mind of an intruder and really has no obligation to. The victim needs only to know that criminals are evil and if they can break one law they can sure break another, even taking your life. Many governments see it otherwise. They want you to wrongly believe that the individual who was deranged enough to commit the initial crime of breaking into your abode really has no intent to harm you personally – he only wants your property - so you really shouldn’t harm him either. How considerate.

Thankfully, the illogical and unrealistic optimism of the duty to retreat is seeing its demise across the nation. In 2005 Florida passed the nation’s first “Castle Doctrine” and many states have followed with similar legislation which is sometimes called a “stand your ground” bill. These much-needed laws say that you have the right to protect your “castle”, which in all such states is your home while in some states it also includes automobiles and offices. It casts aside the duty to retreat and allows the homeowner to make an immediate decision to protect property and life. This is because the Castle Doctrine rightly presumes that an individual forcefully and illegally entering one’s domain is intent on doing so using all means possible, which include force and violence. The Castle Doctrine does not demand that the homeowner show beyond the shadow of a doubt that the evildoer was intent on harming anyone within the premises. Illegal behavior itself is suspicion enough.

This absolves the homeowner of any wrongdoing were he to pull the trigger. The protective homeowner is excluded from criminal prosecution and also from civil lawsuits, so all bases are covered. The victim of the home invasion – not the aggressor - comes out on top, living to see another day and being free of prosecution, just as it should be.

Thanks to efforts by the National Rifle Association and other constitutionalists the Castle Doctrine is spreading like wildfire across the United States. In the two years since Florida’s bold move, 18 other states have followed suit. Let us hope that some day soon New York State picks up the ball and runs with it, because right now, if you chose to protect your castle and those in it, you, not the perpetrator, would be identified as the criminal. There’s something very, very wrong with that.