Archive for category Business
This past Saturday’s Wall Street JournalWeekend Interview was with Uber founder Travis Kalanick (“Travis Kalanick: The Transportation Trustbuster“). Uber allows a customer to summon an otherwise idle limo or SUV, on demand, through a smartphone app. The prices are competitive with town car service, and don’t require pre-arrangement. The article details, in part, Kalanick’s battles with various municipal regulatory authorities, who, often acting on behalf of established taxi interests, seek to keep his company from operating:
When I suggest to Mr. Kalanick that Uber, in the fine startup tradition, was using the “don’t ask for permission, beg for forgiveness” approach, he interrupts the question halfway through. “We don’t have to beg for forgiveness because we are legal,” he says. “But there’s been so much corruption and so much cronyism in the taxi industry and so much regulatory capture that if you ask for permission upfront for something that’s already legal, you’ll never get it. There’s no upside to them.”
Then, last year, came the clash with regulators in the city where they order red tape by the truckload: Washington, D.C. A month after Uber launched there, the D.C. taxi commissioner asserted in a public forum that Uber was violating the law.
This time Uber was ready with what it called Operation Rolling Thunder. The company put out a news release, alerted Uber customers by email and created a Twitter hashtag #UberDCLove. The result: Supporters sent 50,000 emails and 37,000 tweets. Mr. Kalanick says that Washington “has the most liberal, innovation-friendly laws in the country” regarding transportation, but “that doesn’t mean the regulators are the most innovative.” The taxi commission complained that the company was charging based on time and distance, Mr. Kalanick says. “It’s like saying a hotel can’t charge by the night. But there is a law on the books, black and white, that a sedan, a six-passenger-or-under, for-hire vehicle can charge based on time and distance.”
In July, the city tried to change the law—with what were actually called Uber Amendments—to set a floor on the company’s rates at five times those charged by taxis. “The rationale, in the frickin’ amendment, you can look it up, said ‘We need to keep the town-car business from competing with the taxi industry,’ ” Mr. Kalanick says. “It’s anticompetitive behavior. If a CEO did that kind of stuff—you’d be in jail.”
A determined PR campaign by Uber was able to derail DC’s efforts. By coincidence, this week, Uber posted on its Denver blog that the Colorado PUC is up to the same tricks:
Unfortunately, the Colorado Public Utilities Commission proposed rule changes this month which, if enacted, would shut UberDenver down. We need your help to prevent these regulations from taking effect! Sign the petition!!
Here’s a sampling of what’s being proposed (Proposed Rules Changes):
- Uber’s pricing model will be made illegal: Sedan companies will no longer be able to charge by distance (section 6301)
- This is akin to telling a hotel it is illegal to charge by the night.
- Uber’s partner-drivers will effectively be banned from Downtown — by making it illegal for an Uber car to be within 200 feet of a restaurant, bar, or hotel. (section 6309)
- This is TAXI protectionism at its finest. The intent is to make sure that only a TAXI can provide a quick pickup in Denver’s city center.
- Uber’s partner-drivers will be forced OUT OF BUSINESS — partnering with local sedan companies will be prohibited. (section 6001 (ff))
The PUC has run interference for the taxicab cartel here before, last year shutting down a popular airport ride sharing program. In 2011, they denied additional permits to Yellow and a proposed start-up, Liberty Taxi. And the Union Taxi Cooperative’s battle to begin service (eventually successful) was the stuff of legend. Their actions to the detriment of electricity ratepayers have been well-documented by Amy Oliver and Michael Sandoval over at the Independence Institute. But at least in those cases, they had the fig leaf of enforcing existing law. Here, as in DC, they’re actually proposing to change the rules in order to run the company out of town.
As a living, breathing example of regulatory capture, Colorado’s PUC is in a league of its own. Let’s hope that Uber’s supporters are able to persuade them to cease and desist their harassment of the company.
What makes it so hard to fight the growth of government is its ability to create client groups seemingly at will, with the money of the very people it’s seeking to co-opt. I see it myself all the time at the JCRC, where what had been private, service groups are reduced to begging for scraps and favors in front of legislative committees. At one time they thought it more expedient to do that than to make the case for the value of their work to the community they served and represented. Now they’re caught, and even when they’re not temperamentally inclined to go along with the leftist agenda, they often do because they can no longer imagine doing business without government support.
So it happens with PERA, too, which has announced the Colorado Mile High Fund, a fund geared towards investing in Colorado entrepreneurs who have partners, but are also having a hard time finding additional capital.
“We heard from businesses around the state during the development of the Colorado Blueprint that increased access to capital is critical to their success and that of our state’s economy,” said Gov. John Hickenlooper. “The creation of the Colorado Mile High Fund will improve that access to capital and we are pleased that Colorado PERA’s partnership will benefit and help grow companies here in Colorado.”
The risks to the taxpayers and the foolishness of this sort of government adventure are all around us, but it’s hard to tell if that’s a bug or a feature of this plan. I don’t think PERA’s out to deliberately lose money, but investing in high-risk start-ups may not be the best decision for a defined benefit retirement fund.
Even if this turns out to be one fund in the option and under-used 401(k) option, entrepreneurs and start-ups will now have a reason to support increased funding for a government-sponsored employee retirement plan, whose money much come from the pockets of the taxpayer. The most dynamic sector of the state’s economy will be effectively recruited on behalf of its most stifling.
Wednesday night, Mitt Romney punctured the balloon that was Barack Obama’s inflated reputation as a debater and communicator. I guess having a hollow core and thin skin is a bad combination.
Romney did this largely by turning out not to be the stick figure that Obama had been running against for the last 18 months, and which he had apparently internalized as actually being the actual Mitt Romney. So in some respects, the left’s and the Democrats’ disillusionment with Obama is a result of Obama’s disillusionment with the opponent his campaign constructed for him. So far, his only response has been to complain that Mitt the Man is a better candidate than Mitt the Myth, and to argue that Mitt must have been lying during the debate. Romney’s campaign has responded with an ad calling Obama on his own campaign’s admission that Romney’s proposed net tax cut won’t be any near $5 trillion, an admission echoed by the media “fact-checkers” that, up until now, Obama had held up as the Gold Standard of Absolute Truth.
That said, some of Obama’s own claims during the debate turn out to be at least misleading. At one point, during an answer ostensibly about working across the aisle, Obama mentioned three free trade agreements passed in 2011:
“That’s how we signed three trade deals into law that are helping us to double our exports and sell more American products around the world.”
But of course, Obama inherited those free trade agreements – with South Korea, Panama, and Colombia – from the Bush administration, and he sat on them for over two years before submitting them to the Republican-controlled House, where they were approved, and the Democrat Senate, where they passed overwhelmingly. In this regard, the comparisons with President Clinton are instructive. One of Clinton’s first acts was to submit NAFTA for Congressional approval, where it passed a Democrat House largely on the strength of Republican backing, and against the wishes of the Democratic majority. The Democrat leadership simply wasn’t going to submarine a brand-new Democrat president on one of his first initiatives. Obama had the option to do the same thing anytime during his first two years in office, but chose to wait until the demands grew loud under a Republicans House to do so.
His claims to being open to Republican ideas have always been a sham, but in this case, they’re little more than an attempt to cover up for the fact that he all but ignored economic growth and job creation for his first two years in office. The difference between Clinton’s & Obama’s trade policy lies in contrast to the similarity in their politics, though. Clinton has tried mightily to take credit for the benefits of a welfare reform bill that he only adopted once his party lost control of Congress. Likewise with Obama and these bilateral trade agreements. (In what would be a bizarre claim for an actual news organization, the Washington Post at the time tried to spin this as a win for Obama, rather than his bowing to reality.)
Closer to Colorado, Congressman Ed Perlmutter apparently never got the message, and was the one member of Colorado’s Congressional delegation to vote against all three agreements. Colorado’s trade with Panama and Colombia is relatively small, but we export hundreds of millions of dollars a year in goods to South Korea, an economy which, while running a trade surplus, isn’t nearly the export-driven economy that it used to be. Perlmutter was the only Colorado representative who professed to see a threat to local jobs in these agreements. Even Diana DeGette, long in the tank for the unions, only opposed the Colombian agreement.
As we progressively disabuse ourselves of illusions regarding Democrats, perhaps the next two to fall will be that Obama deserves credit for free trade, and that Perlmutter understands the topic at all.
The Democrats-with-a-byline who populate the MSM are no doubt going to point with glee at the performance of the markets over the last quarter. A good Q3 in an election year usually means re-election for a sitting president, and with the Dow Industrials up 6.6%, the S&P 500 up 8.4%, and the NASDAQ gaining 9.4%, the champagne will be out at the Tiffany Network tonight. (Maybe Jay-Z and Beyonce have some left over for them.)
But perhaps we ought to look at some other indicators, as well. Since QE3, the third, unlimited round of the Fed’s
pump-priming inflationary stimulus, was announced on September 13th, the markets are down. The Dow is off 0.5%, the S&P off 1.3%, and the NASDAQ has also given back 1.3%. These are shorter-term moves, to be sure, but they also mean that the little boost from the QE3 announcement has faded, and the grim reality of a stagnant job market, collapsing durable goods orders, rising foreclosures, and downward revisions in company guidance as a result of rising costs. All the money printing in the world can’t actually reverse business fundamentals.
It’s also worth looking at the Dow Transportation Index over the same period. Over the last quarter, that index is down 3.4%, and down 5.8% since the QE3 announcement. Clearly, the truckers and trains aren’t feeling the love. This is important as an indicator in its own right – road and rail are expecting to have less stuff to move, and their fuel and personnel costs are rising.
But it’s also a contra-indicator according to classic Dow Theory, which says that you only get a confirmation of a market move if both the Transports and the Industrials move in the same direction. That’s because a lot of what rail moves is related to industrial production. Three months of divergence, in Dow Theory, is roughly an eternity. I don’t know if it’s unprecedented, but it’s a very long time. Sooner or later, one or the other will have to move in the other direction. (It’s possible that they both will, in which case we’ll have the same problem for a while longer, just different winners and losers.)
The political effect may well be real and enduring (although a pretty good Q3 in 2010 wasn’t enough to save Nancy Pelosi’s sorry hide). People may look at a good quarter for their 401(k)s and their pension plans (although the government employees were probably voting for their subsidizer, anyway), and conclude that the worst is over. That would be both a financial and an electoral mistake.
My latest for Who Said You Said:
The Renewable Fuel Standard’s ethanol mandate requires an increasing amount of ethanol be blended in gasoline every year. Last year, more than a third of America’s corn crop went to ethanol; this year, with decreased production and increased diversion, that proportion is expected to rise to at least 40%. This requirement has pitted ethanol producers against food and feed consumers of corn, driving up corn prices even faster than normal supply shortages would dictate.
The EPA could, if it chose, suspend the ethanol mandate altogether for the year, but so far has chosen not to do so. Not only Agriculture Secretary Tom Vilsack, but Interior Secretary Ken Salazar have been strong supporters of ethanol. On July 16, 2008, Salazar, then a U.S. Senator from Colorado, spoke on the floor of the Senate in terms of ethanol’s contribution to America’s “energy independence,” its importance in keeping gas prices down, and the jobs that were then being created on Colorado’s eastern plains in the new ethanol plants being opened there.
The Obama Administration may have been caught off guard by the severity of the current drought, but questions about price distortions caused by the mandate aren’t new. Last year, in February of 2011, Vilsack addressed exactly these same concerns at a press conference [See CNSNews.com video above]:
“Certainly not worried in the long term about our capacity to produce enough corn to meet our food and feed needs as well as our fuel needs. The last time we had any issue relative to food prices when this issue was raised about ethanol production, our studies indicated that the ethanol production was a very, very, very small percentage of the food price increases.
“When you look at food price increases, you’re looking more at marketing, advertising, refrigeration, transportation, expenses that are incurred in the food chain. And you’re also recognizing that farmers are receiving an ever shrinking share of the retail food dollar. There are a lot of folks that have to be satisfied out of that retail dollar.
“So I’m not concerned about it. We obviously will continue to look at what the Spring will bring, in terms of cropping decisions. Part of what’s happening worldwide is the result of weather conditions in a number of countries. Export controls and restrictions by some countries have made it a little more difficult. But here in this United States, we’re anticipating food prices to rise somewhere between 2-3%, which is relatively moderate.”
The problem, of course, is that neither people nor livestock can wait for the long run to eat. It may be easy enough for us to adjust to some food price increases, but folks living closer to the margin, as in Mexico, don’t have that luxury. See Egypt for what happens when entire countries have to choose between food and fuel.
And while Vilsack has correctly identified the price inputs into food production, he’s forgotten that prices change because of action on the margin, and the price of corn has proven to be especially volatile, but also especially remunerative to farmers in recent years. A large part of this increase is a result of the ethanol mandate. And contrary to Sec. Vilsack’s protestations that little of the money is flowing through to farmers, agricultural land values have been shooting through the roof, indicating that investors see corn production as a good investment.
The winners include ethanol producers, who are guaranteed a market for their product, corn farmers, who see the results of the government bidding against private ranchers and farmers for their product, and fertilizer companies, whose nitrogen-based product is needed to save the soil from the increased corn crop. Much of the increased corn planting takes place at the expense of soybeans, which replenish the soil. (As a side note, a major component of fertilizer is natural gas; the combination of falling natural gas prices and rising corn plantings has been a windfall for those companies, so to the extent that the farm vote is in play, look for politicians to make hay with that.)
The losers include ranchers, who are having to bid against the government for corn to feed their herds, and you. Because not only are food prices rising faster than your paycheck, there’s little to no statistical evidence that all this diversion of food to fuel is keeping gas prices down. And in spite of the mandates, ethanol plants are shutting down, anyway.
For decades, as their agriculture became a running joke, the Soviet Union used to blame chronic food shortages and poor crops on the weather. A Russian history professor of mine responded to a student’s question about Gorbachev’s political prospects, “Well, he’s got his main rival (Yeltsin) in charge of agriculture, so I’d say he’s in pretty good shape.”
It’s doubtful that Barack Obama felt threatened by Vilsack’s presidential ambitions (his abortive presidential run ended in early 2007, about a year before his home-state Iowa Caucuses), but it’s likely that Vilsack will end up as collateral damage of this Administration’s misbegotten economic and energy policies, nevertheless, when he finds himself – hopefully – looking for work after the November elections.
I don’t tend to post a lot on purely social issues. But there are times when the two issues intersect in their own very illuminating way. During the June 26 hearing on the Colorado Health Care District redevelopment, one gentleman, one of three African-Americans in the room, took exception to some of the concerns being expressed by the neighbors of the proposed project:
“I’m a civil rights activist and a member of this community. I have family and friends who live here in this community. I’m here tonight – I thought I came here for peace and unity. But I see, that’s not going to be the case. Why? Because I sit over there, stood over there, and heard you all use all these buzzwords and code words. ’We don’t want that element out here. We don’t want our property values to go down. Those are code words to say we don’t want black and brown people…”
(Shouting and yelling)
“You say ‘No,’ then why don’t you…”
“We don’t want the people who shot the police officer.”
“You know something, I don’t either, I don’t want them either, and I’ve stood on the front line saying put his butt in jail. But at the end of the day, what I’m saying is this. You want to be fair about it, Wal-Mart has been a friend of the African-American community, and I think that it will continue to be a friend to our community, and we need their help, and we need your help.”
Right after he finished, one of the audience members yelled after him something about Wal-Mart keeping wages down. But that wasn’t his point. His point was twofold: first, without Wal-Mart, many of those people wouldn’t have jobs at all, and second, Wal-Mart keep prices down, making many things more affordable to people with lower incomes.
Now, I don’t think most of the people in the audience were consciously racist. But I do believe that the charge stung precisely because, as good liberals (the precincts surrounding the development voted from 75% to 85% for Obama in 2008), they believe themselves to be incapable of racism. And to be sure, their bias isn’t the kind that leads someone to put on the bedding and burn crosses.
But it is paternalistic. They are unable to imagine that they have neighbors who can’t afford the options they’d put in the place of WalMart, and who would welcome a WalMart in walking distance. And they were stunned to hear from a black man that he very much wanted something that they were convinced he had no business wanting.
Almost 60 years ago, Billy Wilder had Humphrey Bogart, in the character of Titan of Industry Linus Larabee, explain things to his ne’er-do-well kid brother, William Holden, in the 1954 Paramount picture, Sabrina:
Wilder wasn’t a corporate shill. In The Apartment, he showed that he understood as well as anyone how to satirize the business world. But this is a lesson that many of those yelling about Wal-Mart that warm evening might bear in mind.
As mentioned yesterday, the Denver Democrats have invited Rep. Maxine Waters to speak at the annual State House District 7 Unity Dinner this Saturday night. While we think Waters is a terrible excuse for a Congressman, she’s all-too-representative of her party in at least one respect – a belief that it’s possible to give money to one person without taking it away from someone else.
As the interview deteriorates from a policy discussion into Waters’s patented grievance-mongering, CNBC’s redoubtable Mark Haines former analyst and Erin Burnett go from incredulity to resignation, that they’re dealing with someone with roughly a 1st grade understanding of accounting. In fact, you can only arrive at her beliefs through a rigorous process of re-education; 1st grade math problems routinely feature apples being taken away from Johnny and given to Timmy.
In the past, HD7 has invited Mayor Michael Hancock, Auditor Dennis Gallagher, and Speaker Andrew Romanoff. Say what you will about them, they have the virtue of being adults. Hancock and Gallagher have demonstrated fiscal common sense in their positions with the city, and while we’ve had our disagreements with Romanoff in the past, he at least demonstrated some understanding of economic and fiscal matters. (Who knows? Maybe she’s even one of the idiots who needs educating?)
People like Hancock, Gallagher, and Romanoff have actually had responsibilities to larger groups that have pulled them to the center, in rhetoric, if not always in deed. Waters, with a safe seat in south-central, has the luxury of indulging her worst impulses on a regular basis, and probably isn’t the ideal figure for a broad-based party to unify around.
If the Denver Democrats insist on inviting folks like Maxine Waters to keynote these dinners, perhaps they need to rename them the Fragmentation Dinner.
I’m smart enough to realize that there’s no power on earth, aside from maybe Frank Capra, that can make a bank an object of sympathy. But yesterday’s Two-Minutes’ Hate outside Wells Fargo’s main Denver office sure came close:
When the call went out, this was the focus on ProgressNow’s email:
Over the last four years, Wells Fargo’s federal income tax rate was just 3.8%–less than what nurses, firefighters, teachers and janitors pay–despite making some $69.1 billion in profit. If Wells Fargo had paid their fair share in federal taxes, Colorado would have received an extra $53 million–money to hire hundreds of teachers, nurses and firefighters.
The source for this claim seems to be a Citizens for Tax Justice report, claiming to show that Wells Fargo actually got back $680 million, on $49.4 billion in profit, from 2008-2010, and then applying the same methodology to 2011.
There are many flaws in the CTJ’s study, beginning with the idea that while the tax expense isn’t real, somehow its “current” component is more real than its “deferred” component. It’s a mistake that they have a history of making, especially in years following recessions and election years, when the difference between financial accounting and tax accounting depresses apparent tax rates. It’s a mistake that Megan McArdle and Fortune have caught the New York Times making as well.
Cash, on the other hand, is real. Cash represents an actual check that Wells Fargo wrote to the Federal government. So while the IRS wasn’t writing Wells Fargo a $4 billion check in 2009, the company’s Statements of Cash Flows do say that on $64 billion of net income, it wrote checks to the government for $11.7 billion over those four years. To the extent that this represents “real” taxes paid, it constitutes an 18% tax rate.
But here’s one of the most revealing claims:
“…’accelerated depreciation’ is technically a tax deferral, but so long as a company continues to invest, the tax deferral tends to be indefinite.”
And the problem with that is…? Evidently “investment” only counts if it’s government “investment” in Solyndra, or if it’s the result of shakedowns by community “organizers,” like the ones on the streets yesterday, or the one the White House. Wells Fargo claims a quarter-billion dollars a year in charitable and community giving, but of course, that’s them deciding what to do with their money, and if it doesn’t satisfy the avarice of SEIU organizers, or fall under their control, then it doesn’t count.
Remember: Progressively More Expensive, Progressively More Intrusive, Progressively More Restrictive.
Also last night, Susie and I went to go hear Arthur Brooks of the American Enterprise Institute speak, at the Young Americans Center for Financial Education. The Center is truly a wonder, set up to teach grade schoolers about business, finance, and economics. Brooks spoke in Young Ameritowne, a large hall set up like a town square, ringed by mock storefronts – sponsored by actual businesses – that the kids role-play at operating. Go see it. (Now if they could only devise a program targeted at state legislators, we’d be golden.)
The failure of conservatism and free-market forces to arrest the country’s leftward drift for almost a century now should be of profound concern, and should be a puzzle to those of us fighting the fight. AEI was founded in 1938. Go back and read some of the Intercollegiate Studies Institute’s journals from the 1950s, 60s, 70s, and you’ll see two types of articles. One it the neo-confederate and near-neo-confederate type, of which we are well rid, and which come from a world as alien as Gilbert & Sullivan.
The others are those that could have been written any time in the last four years, changing only the names of the programs and actors. Those arguments didn’t carry the day back then, yet we expect that they’ll work this time.
Why, when all the empirical evidence is that socialism doesn’t work, capitalism does, that less freedom produces greater misery, why have we been losing the fight for 100 years, since Wilson’s election? This despite poll after poll that shows that Americans continue to embrace capitalism under that name, and reject redistributionism, by overwhelming margins?
This question has been bothering me for well over a year now, because even with all the intellectual ammunition at our disposal, it doesn’t bode well for this fall, or for what comes afterwards, with so much at stake. And too few conservatives and libertarians seem to be asking it at all.
What a relief, then, that someone with Brooks’s intellect has recognized the same problem, and what a pleasure that he’s actually got a persuasive answer.
Brooks is such a clear thinker and gifted speaker that I can reproduce the bulk of his argument from memory a day later, and I have a terrible memory. He gives you just what you need to remember, and he gives you the pegs to hang it on. When Susie and I saw him speak at the Western Conservative Summit in 2010, we thought his was far and away the best talk of the weekend.
Brooks contends that both the liberal answer – that Americans secretly want socialism – and the conservative answer – that all we need is better data – are flawed, because they don’t address the moral arguments that people find persuasive.
What we’ve been missing is a moral defense of capitalism, one that doesn’t take an 1137-page hardback “novel” to summarize. Moral arguments deal with people, and arguments that deal with people are always more persuasive than arguments that deal in numbers. Too often we dismiss that sort of thinking as “feelings over facts,” but Brooks contends, correctly, I think, that that’s a mistake. It’s how people actually come to conclusions and make decisions, and winning the argument means reaching people on their terms, not making it necessary for them to come to us.
Brooks’s case consists of three parts:
1) Earned Success. That is what truly defines happiness, not mere wealth. Earned success means linking success and its rewards to talent and effort. When results are decoupled from action, you get, “learned helplessness,” a recipe for unhappiness and frustration, since you’ve learned that you can’t really control your future.
2) Fairness. Conservatives like Milton Friedman resist talking about fairness, largely because we think it’s too subjective. But it’s also persuasive, and those same polls that show people love capitalism also show that they crave fairness. Well, what could be more fair than letting people keep what they earn, and decide how to use their own wealth? It’s a critical battlefield, one we can own, but not if we don’t show up for the fight.
3) Capitalism is good for the poor. Mere wealth may not be the measure of happiness, but poverty is a pretty good measure of misery. And it’s capitalism that reduces the misery that is a hand-to-mouth existence, not socialism, not all the good intentions in the world.
Moral defenses of capitalism abound. From Michael Novak’s The Spirit of Democratic Capitalism, to Hayek’s The Road to Serfdom, people have been thinking for generations about why a free system is a better system. But Novak is an academic, and neither Americans nor Europens feel tyrannized by the welfare state. The Greeks may yet provide a contemporary illustration, but thus far, most people see serfdom coming from the barrel of a gun, not a food stamp debit card.
The beauty of Brooks’s defense is that it not only speaks about people, it speaks to people, on terms that relate to their lives. It does it without policy prescriptions that strike people as weird, or re-opening arguments that were dealt with 170 years ago, when we decided we didn’t like polygamy and did like internal improvements.
The YA Center promptly violated 1) and promoted learned helplessness by giving out copies of Brooks’s new book, The Road to Freedom, which promises to tighten up the argument, and explain, for instance, why direct help with the best of intentions can have very bad results.
I’m looking forward to reading it, and reviewing it.
Reading Malcolm Gladwell’s What the Dog Saw, I got to his essay, “True Colors: Hair Dye and the Hidden History of Postwar America.” He argues that the difference between Clairol’s “Does She or Doesn’t She?” and L’Oreal’s “Because I’m Worth It,” is the difference between 1950s and 1970s feminism. Moreover, even when the two product’s pitches had essentially merged (Gladwell was writing in 1999), their buyer’s different self-images lingered on. Smart ad men know they’re selling more than a product, they’re selling an experience, or an image. Sometimes, that image or dream ties into a larger social change or movement, and that that’s both a reflection and an agent of that change:
This notion of household products as psychological furniture is, when you think about it, a radical idea. When we give an account of how we got to where we are, we’re inclined to credit the philosophical over the physical, and the products of art over the products of commerce…
“Because I’m worth it,” and “Does she or doesn’t she?” were powerful, then, precisely because they were commercials, for commercials come with products attached, and products offer something that songs and poems and political movements and radical ideologies do not, which is an immediate and affordable means of transformation.
Far from trivializing a political, social, or economic movement, commercialization can help make it personal and accessible, and therefore less threatening and more familiar.
We’ve seen a couple of Tea Party movies, one explicitly so, (Atlas Shrugged), and one implicitly (Robin Hood). Thus far, I’m aware of only one commercial that implies a Tea Party presence, the Starbucks commercial with the angry old loner who yells at town halls, which would be a bit like L’Oreal selling “Because I’m worth it” using Nurse Ratchet or Gloria Steinem, who quickly became a caricature of herself.
It may be that we have to wait until the Tea Party sees more success, in winning hearts and minds if not yet national elections, before companies are willing to bet their products’ success on its messaging. But just as feminism succeeded in making the political personal (and more destructively, the personal political), and as environmentalism succeeded in making small actions and then products green, the Tea Party might get farther by doing something similar for its own themes.
It’s not wise to choose your political message based on the products it might sell, but certain themes will sell better than others. We can search forever in the tall grass of social history to discover how much of feminism’s public appeal was based on opportunity, and how much drew from raging against The Patriarchy, but there’s no question that positive sells. Ilon Specht may have been angry when she wrote, “Because I’m worth it,” but the slogan expresses liberation, not anger.
To be sure, it faces some hurdles in doing this. If the theme is fiscal responsibility, most families already need to spend less than they make. If it’s personal liberty, the government’s probably a tougher customer to disobeying rules, tougher than most companies. And to the extent that it dwells on what used to be, rather than what might be, its message is nostalgia, and the only products it will sell are baseball and Coca-Cola. You want to get people to invite your ideas into their homes, you need to be relevant to how they’re living their lives today, and want to be living them tomorrow.
So, what products do you see as being right for capturing the Tea Party ethos, and allowing people to internalize it? Which themes are best suited to commercialization? And what messages should go in their commercials? How would you write such a commercial?