Category: Business

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Phony Class warfare theme

Seth Anderson0 comment

Class Warfare
Class Warfare

Sometimes I forget that the Chicago Tribune is a Republican-friendly newspaper. On many topics, they are decent source of non-biased news, but every so often, the visage slips. Last Friday, the print edition of the Chicago Tribune had this inflammatory headline:

“Democrats up class war ante”

The online version available today has slightly toned down the headline, but not much

Illinois Democrats went all-in Thursday with their election-year class warfare theme as Speaker Michael Madigan pitched the idea of asking voters to raise taxes on millionaires, Senate President John Cullerton advanced a minimum-wage increase and Gov. Pat Quinn compared wealthy opponent Bruce Rauner to TV villain Mr. Burns.

(click here to continue reading Illinois Democrats go all-in on class warfare theme – Chicago Tribune.)

Either way, calling Democratic Party initiatives to reduce income inequality, slightly, as class warfare is offensive, and straight out of Frank Luntz’s dictionary. Circa 2008, Frank Luntz started labeling every economic-related Democratic Party position “class warfare” whether or not it actually applies.1 Raising the tax on millionaires isn’t going to bankrupt the millionaires. Increasing the minimum wage isn’t going to force Bruce Rauner to sell off one of his many, many mansions. No Democratic politician is calling for the guillotine to be rolled out, though plenty of us peons chuckle at the idea. 

As Senator Bernie Sanders has been saying for many years, the real class warfare is being waged ruthlessly by the 1% on the rest of us. Focusing on tax breaks for corporations, flat tax proposals, allowing someone like Mitt Romney (or Bruce Rauner) to pay tiny amounts of income tax; these are tools of the rich, these are actual battles of class warfare. Cutting food stamps is class warfare, cutting education assistance is class warfare, cutting Social Security is class warfare, eliminating the minimum wage is class warfare, you could make a big, long list.

“What kind of nation are we when we give tax breaks to millionaires but we can’t take care of the elderly and the children?” Sen. Bernie Sanders asked on Monday. He was reacting to a new report that more than 18 percent of Americans last year struggled to afford food. Republicans in Congress, meanwhile, are calling for deeper and deeper cuts in food stamps, a program that provides help mostly to children and seniors. We are living in “a very ugly moment,” the senator told the Rev. Al Sharpton.

 

Later Sen. Sanders ripped Republicans for claiming that the problem is that children get too much help from the federal government, “These are the same people who want to eliminate the estate tax, which applies to only the top three tenths of one percent of all Americans, which is the richest of the rich, then they are going after kids. The politics of this, Al, is what they are trying to do is deflect attention away from income and wealth inequality. Attention away from the fact that the rich are doing extraordinarily well, and tell their supporters that the real problem in America is that children are getting too much help from the federal government, and that’s the kind of mentality that we have got to fight back against.”

(click here to continue reading Paul Ryan Quivers as Bernie Sanders Outs the Dirty Secret Behind His Poverty Propaganda.)

Of course it buys happiness
Of course it buys happiness

Speaking of wealthy class warriors, check out this list (from the Tribune, in fact) of some of the properties that the Republican candidate for Governor of Illinois, Bruce Rauner, owns

There’s the 6,870-square-foot Rauner mansion on a half-acre lot in Winnetka; two units, including a penthouse, in a luxury high-rise overlooking Millennium Park; a waterfront villa in the Florida Keys with a 72-foot-long pool; ranches in Montana and Wyoming; and a condo in an upscale Utah ski resort.

Most carry price tags well into the seven figures. But topping the list is a penthouse in a landmark co-op building along New York’s Central Park, which property records show Rauner bought in 2005 for $10 million.

Rauner has amassed a larger stable of high-end residences than Mitt Romney, the 2012 GOP presidential nominee whose plentiful and opulent homes lent ammunition to foes who portrayed him as an out-of-touch elitist.

Rauner dismisses any such comparison to Romney…

Rauner said he likes recreational properties where he can practice land or water conservation. He often buys and pastes parcels together in areas he thinks are beautiful to “have an investment that appreciates over a 20- to 30-year period.”

That includes his property in Wyoming, he said, where he grows barley, alfalfa and winter wheat.

When he takes his family West, they most often go to his New Moon Ranch in Livingston, Mont., near Yellowstone National Park. It sits on hundreds of acres of grazing and cropland and includes a nearly 6,000-square-foot home, according to property records. It has five bedrooms and four baths and is currently valued by the Park County, Mont., assessor at $2.2 million.

In the winter, Rauner and his wife, Diana, have their pick of both hot and cold weather getaways. For snow sports they have a condominium in the luxury Deer Valley Resort in Park City, Utah, east of Salt Lake City, purchased in 2003 and currently valued by the assessor there at $1.75 million.

The Rauners also own an oceanfront home in Key Largo, Fla., currently worth almost $7 million, according to property records there. It has a private boat dock, four bedrooms, four baths, 5,370 square feet of ground-floor living space and a patio nearly half that size.

…

The Rauners also have a New York penthouse on Central Park in a century-old Beaux Arts style building known as The Prasada. They paid $10 million for it eight years ago. A billionaire neighbor recently put the adjoining penthouse up for sale and is asking $48 million, according to realty postings.

In Illinois, Rauner holds title to three homes in Cook County, including two condominium units on East Randolph Street. Records show Rauner paid more than $1.2 million for the smaller unit in late 2008, where one of his daughters now lives.

The Rauners bought the penthouse unit a couple of months earlier, in August 2008, for $4 million, according to county records. …

The Rauners still own their Winnetka house and consider it their primary residence. Its current market value is estimated at $3.3 million by the Cook County assessor’s office.

(click here to continue reading Bruce Rauner has many million-dollar homes and a campaign that touts frugality – Chicago Tribune.)

Footnotes:
  1. I’m not sure Frank Luntz is the first to use this talking point, but he came up with Death Tax, and other Republican “hits”, so it stands to reason [↩]

Amazon Prime Price Increase

Seth Anderson0 comment

Amazon Prime and The Pope
Amazon Prime and The Pope

From an email sent early this morning, Amazon is raising the Prime fee to $100, an increase of around 25%.

We are writing to provide you advance notice that the price of your Prime membership will be increasing in 2015. Your 2014 annual renewal will remain at the original price of $79. On October 5, 2015, your membership will renew at $99/year.

Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners’ Lending Library.

via Amazon.com: Amazon Prime (One Year Membership)

In general, I’ve been happy with the Amazon Prime shipping deal – though it does obviously have benefits for Amazon.com as well. I purchase lots of office supplies, tools, and what-not from Amazon that I used to get elsewhere simply because it’s more “frictionless” to just click through to Amazon. That said, I’m not sure that $8.33 a month is the deal it used to be. Amazon needs to add more perks to the Prime membership to keep it compelling. I don’t use the video streaming, ever, why should I pay extra for it?

I guess I’m not alone in demanding more in exchange for this price hike:

While the moves are generally seen as a revenue booster with minimal cost effects, some have warned that the Prime increases could carry negative impacts.

UBS, citing a survey, last month said Prime customers wouldn’t be so eager to renew if the price increased. Amazon would have to provide even more value and better service to accompany a price hike, which wouldn’t help margins improve, UBS said then.

Amazon—known for robust sales, thin profit margins and big spending—posted a large revenue increase for the fourth quarter, but its profit and outlook fell below expectations.

The company has been pursuing potential deals under which it would post product listings with links to certain traditionally brick-and-mortar retailers’ websites, The Wall Street Journal reported last month.

(click here to continue reading Amazon Raises Prime Subscription Price To $99 A Year – WSJ.com.)

because there is a point at which free second day shipping is not worth the pre-paid cash, especially when the second day guarantee is more of an aspiration rather than an absolute… 

“CIRP also checked the renewal intent at the proposed $99 and $119 prices, and found dramatically different results,” said Mike Levin, Partner and Co-Founder of CIRP. “At $99, under half of subjects think will either definitely or probably renew. And at $119, 40% of subjects say they will definitely not renew their membership.”

Those numbers tally pretty closely with a poll the WSJ’s Digits blog ran on January 31, in the wake of Amazon raising the possibility of a price hike in its conference call. In that poll, 47% of the 2,889 respondents said they were not willing to pay any more for the service

(click here to continue reading People Love Amazon Prime. But Will They Pay More For It? – Corporate Intelligence – WSJ.)

On The Internet You Can Become A Dog Easily

Seth Anderson0 comment

Starbucks Elevators
Starbucks Elevators

In a second follow-up to this minor, amusing tale, the @GSElevator guy lost his book deal.

In the face of a barrage of attacks on his credibility, his publisher stood by him. But on Thursday it reversed course and said it was canceling the book.

The publisher, Touchstone, an imprint of Simon & Schuster, did not provide a reason for the turnabout. It released a terse statement saying: “In light of information that has recently come to our attention since acquiring John Lefevre’s ‘Straight to Hell,’ Touchstone has decided to cancel its publication of this work.”

In a phone interview Thursday afternoon, Mr. Lefevre said that he and his agent demanded a conference call with Touchstone, and received one Thursday morning, but were not told why the deal had fallen through. “All they would say is our hands are tied,” he said.

Only Goldman Sachs seemed to be enjoying the moment. “Guess elevators go up and down,” @GoldmanSachs tweeted in response to the news.

Mr. Lefevre’s proposed book, titled “Straight to Hell: True Tales of Deviance and Excess in the World of Investment Banking,” had drawn widespread attention — for the window it promised to provide into Wall Street’s often raucous culture, and as the latest test case in whether social media postings, some resembling online performance art, could be transformed into successful books.

(click here to continue reading Book Deal Falls Apart for Parodist of Goldman – NYTimes.com.)

Don't Bring Your Dog Shet to Town
Don’t Bring Your Dog Shet to Town

from John Lefevre, the banker behind Goldman Sachs Elevator, this defense:

For the avoidance of any doubt, any person who actually thought my Twitter feed was literally about verbatim conversations overhead in the elevators of Goldman Sachs is an idiot.

Newsflash: GSElevator has never been about elevators. And, it’s never been specifically about Goldman Sachs; it’s about illuminating Wall Street culture in a fun and entertaining way. Without highlighting the obvious evolution of the tweets into more generally-appealing observations, let’s start with the simple fact that each of my tweets says “Sent from Twitter for Mac,” hardly the work of someone pretending to be hiding in the walls of 200 West.

Being called a “fake” or a “hoax” by the same people who embraced me as “satire” is simply laughable – and it really speaks to the silly and opportunistic attempts at cheap headlines.

(click here to continue reading GSElevator’s Open Letter To Haters – Business Insider.)

Gawker piled on, claiming it discovered plagiarism on the @GSElevator feed

and the beat goes on…

Beer Baron John Hickenlooper Hates The Cannabis Competition

Seth Anderson0 comment

Ballin'
Ballin’

What nearly amuses me is that Beer Baron John Hickenlooper is so opposed, still, to citizens of his state taking positive steps towards ending the ridiculous drug war in the US. The vote wasn’t even very close, considering. No, if Gov Hickenlooper had his way, only beer should be legal…

Colorado Democrat John Hickenlooper has a firm answer to other U.S. governors asking him about marijuana as source of revenue: Just say no.

Hickenlooper said yesterday that about a half-dozen called or asked him at this weekend’s National Governors Association meeting in Washington about his state’s experience legalizing recreational pot. They want to know about the potential to collect money and avoid the costs of enforcement and incarceration, he said.

Colorado projected last week that sales would generate more than $100 million a year toward a general fund of about $9 billion. But Hickenlooper, who opposed legalizing marijuana, said he’s telling fellow governors that he’s not counting on it to lower other taxes or for spending — and that they shouldn’t, either.

(click here to continue reading Colorado’s Experience With Legal Pot Has U.S. Governors Curious – Bloomberg.)

and this is despite admitting in his own state budget that legal cannabis sales could reach $1,000,000,000 in their very first year! Just consider that for a second: a newly legal industry that already is this significant, despite foot dragging from the Beer Baron, and others of his ilk who hold anachronistic viewpoints about the demon weed.

Beer Money at the MCA
Beer Money at the MCA

new budget numbers predicted that those marijuana taxes could add more than $100 million a year to state coffers, far more than earlier estimates.

The figures offered one of the first glimpses into how the bustling market for recreational marijuana was beginning to reshape government bottom lines — an important question as marijuana advocates push to expand legalization beyond Colorado and Washington State into states including Arizona, Alaska and Oregon.

In Colorado, where recreational sales began on Jan. 1 with hourlong waits, a budget proposal from Gov. John W. Hickenlooper estimated that the state’s marijuana industry could reach $1 billion in sales in the next fiscal year, with recreational sales making up about $610 million of that business.

“It’s well on its way to being a billion-dollar industry,” said Michael Elliott, executive director of the Marijuana Industry Group, a Colorado trade association. “We went from 110,000 medical marijuana patients to four billion people in the world who are 21 and up.”

In the budget proposal that Mr. Hickenlooper released Wednesday, his office said the state could collect about $134 million in taxes from recreational and medical marijuana for the fiscal year beginning in July.

(click here to continue reading Colorado Expects to Reap Tax Bonanza From Legal Marijuana Sales – NYTimes.com.)

Shiner Bock in Lower Yurtistan
Shiner Bock in Lower Yurtistan

and the truth is that Gov Hickenlooper is just a hypocrite, a politician, in other words:

But the state’s Democratic governor said he “hates” his state’s legal weed “experiment.”

Gov. John Hickenlooper revealed his feelings about marijuana legalization to the Durango Herald’s editorial board Friday.

“I hate Colorado having to be the experiment,” he told the newspaper.

The governor said he intends the regulation of legal weed to be even more strenuous than alcohol. “We are going to regulate the living daylights out of it,” he told the Herald.

Hickenlooper was a beer brewer before governor and made his fortune from selling alcoholic beverages — a fortune that wouldn’t have been possible had the U.S. not ended its prohibition on alcohol in 1933. The irony that he hates the the end of another drug’s prohibition in Colorado was not lost on Marijuana Policy Project’s communications director, Mason Tvert.

“I doubt Gov. Hickenlooper felt like he was participating in an experiment when he was making a living selling alcohol in a legal market,” Tvert told The Huffington Post. “Our state has been successfully regulating alcohol for quite some time, so regulating a less harmful substance like marijuana is hardly something new. Does the governor want to go back to a system in which cartels control marijuana instead of licensed businesses and thousands of responsible adults are punished each year simply for using it? We let that experiment go on for 80 years and it never worked.”

Tvert also called out the governor for suggesting that marijuana should be more heavily regulated than alcohol. “Every objective study on marijuana has concluded that it is less toxic than alcohol, less addictive, and less likely to contribute to violent and reckless behavior,” Tvert said. “If he is truly concerned about public health, he should be encouraging adults to consider making the safer choice to use marijuana instead of alcohol when they are socializing or relaxing after work.”

(click here to continue reading Colorado Gov. John Hickenlooper Hates His State’s Legal Weed ‘Experiment’.)

Wouldn’t our society be better off if fatties were smoked at sports arenas instead of endless 20 oz mugs of beer? Not to say that pot smokers can’t be aggressive or violent, but let your own experience with drunks be a guide. 

Chicago wins bid for $320 million manufacturing hub, probably on Goose Island

Seth Anderson0 comment

Goose Island in black and white
Goose Island in black and white

This sounds like a good thing for Chicago; in our society, Defense budget items are sacrosanct, as we1 would rather cut the ability of poor people to eat2, or the medical cost reimbursements of a veteran before we3 slice a dime from the military machine’s budget…

Chicago will be the site of a digital manufacturing institute backed by $70 million in government money and another $250 million of private finding…Chicago competed against several other locations in a bidding process run by the Defense Department. The city envisions the institute would focus on such projects as the faster and cheaper production of a next-generation aircraft engine; drastically reducing the amount of scrap material associated with small manufacturing runs; and speeding the design process among geographically dispersed suppliers.

“This is clearly, without a doubt, one of the most significant things to secure Chicago’s long-term economic future,” Chicago Mayor Rahm Emanuel said in a Saturday interview. “It is the best insurance policy you can buy, which is major research capacity.”

The $70 million grant will come from the Department of Defense. But far more was at stake, as city officials and business leaders quietly raised private commitments in excess of $5 million each from General Electric, Rolls-Royce, Procter & Gamble, Siemens, Lockheed Martin and The Dow Chemical Co.

The new institute, which is proposed for a leased building on the northern end of Goose Island, would fall under the oversight of UI Labs, a nascent University of Illinois-affiliated effort focused on turning academic research into moneymaking, job-creating products. UI Labs stands for “Universities and Industries.”

(click here to continue reading Chicago wins bid for $320 million manufacturing hub – chicagotribune.com.)

Train on Cherry Avenue
Train on Cherry Avenue

Ambitions Are Low
Ambitions Are Low

Check out the old timey religion
Check out the old timey religion

Footnotes:
  1. as a country [↩]
  2. SNAP [↩]
  3. again, as a nation, via our corrupt political class [↩]

Amazon and the Perils of Non-Disclosure

Seth Anderson0 comment

Amazon - The Original Store
Amazon – The Original Store

George Packer discovers a truth about corporate America, including the faux Libertarian strain in the tech industry: namely, they are extremely reluctant to talk to outsiders about anything, consequential, or not.

To some degree, secrecy prevails in all American corporations, and in large institutions generally. No one at these places wants to get caught saying the wrong thing. A gaffe (famously defined by Michael Kinsley as inadvertently telling the truth) is more likely to get you fired than dishonesty, deception, or any number of other ethical breaches. And this situation keeps getting worse, as any reporter who has had to negotiate ground rules with phrases like “on background with quote approval” knows all too well. It was a great relief to read Will Blythe’s Times Op-Ed about refusing to sign a termination agreement after being fired from the digital publisher Byliner because it would have prohibited him from saying anything disparaging about the company. The inexorable inflation of ground rules, non-disclosure agreements, and other impediments to speaking and writing can only be stopped when people refuse to go along with them.

I was naïve about tech companies until I started reporting on them. They turn out to be at least as closed as companies in other industries. This seems backwards—aren’t they filled with hardcore libertarians who want an end to privacy as we’ve known it, a more open and connected world? Apparently for everyone except themselves. And perhaps a sector that monetizes information is more likely to become obsessed with protecting it than if the product were oil or cars. But even in this atmosphere, Amazon is reflexively, absurdly secretive—only giving the absolute minimum information required by law or P.R. In response to a host of fact-checking questions, many of the company’s answers were along the lines of “We don’t break out that number externally,” “We do not share Kindle sales figures,” and “As a general practice, we don’t discuss our business practices with publishers or other suppliers.”

…

But I would argue that a culture of secrecy is bound to end up harming the institution itself, especially when it’s firmly under the control of one leader, as Amazon is under Jeff Bezos. Without some permeability to the outside world, groupthink takes over, bad habits become entrenched, and a company, like a government, is slow to recognize problems that are apparent to everyone else. I saw this happening with American officials in Iraq, holed up in the Embassy in the middle of the Green Zone and beguiled by their own data points while the country outside spiraled down in flames.

(click here to continue reading Amazon and the Perils of Non-Disclosure : The New Yorker.)

Randy's Bookshelves Number 1
Randy’s Bookshelves Number 1

If you are interested in Amazon and the book publishing industry, you should also read Mr. Packer’s fascinating article, Cheap Words, with its byline, Amazon is good for customers, but is it good for books? which begins;

Amazon is a global superstore, like Walmart. It’s also a hardware manufacturer, like Apple, and a utility, like Con Edison, and a video distributor, like Netflix, and a book publisher, like Random House, and a production studio, like Paramount, and a literary magazine, like The Paris Review, and a grocery deliverer, like FreshDirect, and someday it might be a package service, like U.P.S. Its founder and chief executive, Jeff Bezos, also owns a major newspaper, the Washington Post. All these streams and tributaries make Amazon something radically new in the history of American business. Sam Walton wanted merely to be the world’s biggest retailer. After Apple launched the iPod, Steve Jobs didn’t sign up pop stars for recording contracts. A.T. & T. doesn’t build transmission towers and rent them to smaller phone companies, the way Amazon Web Services provides server infrastructure for startups (not to mention the C.I.A.). Amazon’s identity and goals are never clear and always fluid, which makes the company destabilizing and intimidating.

Bezos originally thought of calling his company Relentless.com—that U.R.L. still takes you to Amazon’s site—before adopting the name of the world’s largest river by volume. (If Bezos were a reader of classic American fiction, he might have hit upon Octopus.com.) Amazon’s shape-shifting, engulfing quality, its tentacles extending in all directions, makes it unusual even in the tech industry, where rapid growth, not profitability, is the measure of success. Amazon is not just the “Everything Store,” to quote the title of Brad Stone’s rich chronicle of Bezos and his company; it’s more like the Everything. What remains constant is ambition, and the search for new things to be ambitious about.

(click here to continue reading George Packer: Is Amazon Bad for Books? : The New Yorker.)

 

—

 

Blogger’s Note:  I was working on this blog post, and had a few more sentences written than appear here. However, I typed relentless.com into my browser1, and my computer instantly crashed with a System Kernel Panic. So only Jeff Bezos knows what else I had written, I don’t time to recreate my blah-blah…

Footnotes:
  1. Safari [↩]

No You Cannot Use My Photo For Free Part 91

Seth Anderson0 comment

Old Town Triangle District

Old Town Triangle District

I received this email last week:

Hi- your photo of the Old Town Triangle/ Historic District sign is fantastic. I’d love to use it for a mailing…I’m a Realtor. How do you feel about that and how would you want to be credited for the image?
Thanks-Jennifer Kindel

I politely responded that I’d let her use the photo for a reduced rate of $300, asked where I should send her a purchase order, and then even asked as a post script if she had any interesting loft style properties she could show us, preferably live/work buildings.

I never heard from Ms. Kindel again. She only wanted an image to use for free in her mailer, I’m sure she frequently agrees to waive her real estate commission when she sells a place, right? I wonder if she pays anything to the USPS when she sends out her mailer? Probably not, they don’t expect compensation for their work either.

If I wanted to send a follow-up, it wouldn’t be too difficult, here’s Jennifer Kindel’s LinkedIn page, her Twitter account, her Prudential-Rubloff home page, and so on. But I guess no response is enough of a response, actually better than an indignant reply, as long as she doesn’t go ahead and use the photo without compensating me.

This has been another edition of NYCHMPFF 1

Old Town Ale House
Old Town Ale House

Good Humor Man
Good Humor Man

Footnotes:
  1. No You Cannot Have My Photo For Free [↩]

Drapac USA Moving to West Loop – 1215 W. Fulton St

Seth Anderson0 comment

Technicolor Haze over West Loop
Technicolor Haze over West Loop

I continue to be flabbergasted at the number of new businesses and restaurants moving into the West Loop, especially in Fulton Market, despite the large number of remaining food processing plants remaining that share the space. If you walk down Fulton St in the late afternoon, you still have to evade being splashed by bleach, or stepping on raw chicken bits. The old companies haven’t been forced out yet, in other words. It isn’t a sleek, modern neighborhood by any stretch of one’s imagination. The sidewalks are often cracked, if available at all, the train tracks are a scant couple of blocks away – with accompanying noise and diesel fumes – and yet…

NAI Hiffman represented Drapac Group, an Australian-based company with U.S. headquarters in Los Angeles, in its new lease with event planner, The Revel Group, at 1215 W. Fulton St. in Chicago. Drapac closed on the 36,730-square-foot building purchase on Dec. 31; the new lease was completed just 10 days earlier. “The collective goal of our team was to secure a tenant and stabilize the asset prior to closing,” said Kelly Disser, vice president with NAI Hiffman’s industrial services group. “The transaction was a great success for Drapac as it enters a popular Chicago market.”

The activity reflects the growing transformation of Chicago’s West Loop neighborhood as dozens of office, residential, hotel and restaurant developments are underway, including: the makeover of the Fulton Market Cold Storage Building that will be anchored by Google, a Nobu hotel and restaurant on Randolph Street, and Soho House on Green Street. 1215 W. Fulton offers a premium West Loop location on the southwest corner of Fulton Street and Racine Avenue. The property includes a 30,862-square-foot warehouse with office space and a fenced and secured parking lot.

(click here to continue reading Drapac acquires, leases 36,730-square-foot West Loop property | REJournals.com.)

This made me chuckle:

In 2010, Drapac Group USA was established with a head office in Los Angeles to invest in the rapidly rebounding US real estate market, and capitalise on the unprecedented real estate opportunities that were created as a result of the Global Financial Crisis.

(click here to continue reading Drapac Australia » Home.)

Sunset in Fulton Market, with pallets
Sunset in Fulton Market, with pallets

Cleaning Up
Cleaning Up

Nothing Ever Stays The Same
Nothing Ever Stays The Same

Fulton Market Lineup
Fulton Market Lineup

Beam Inc. being bought by Suntory

Seth Anderson0 comment

Mmm Crunchy Chicago Dogs
Mmm Crunchy Chicago Dogs

Does this mean that Maker’s Mark Whisky will become Maker’s Mark Whiskey?

Suntory Holdings Ltd has agreed a $16 billion deal to buy Deerfield’s Beam Inc, making the Japanese company the world’s third-largest maker of distilled drinks with a global footprint.

The company is paying $13.6 billion in cash for Beam shares as well as assuming its net debt, bringing together Beam’s Jim Beam and Maker’s Mark bourbons, Courvoisier cognac and Sauza tequila with Suntory’s Yamazaki, Hakushu, Hibiki and Kakubin Japanese whiskies, Bowmore Scotch whisky and Midori liqueur.

…

Suntory said on Monday it will pay $83.50 per share in cash, a 25 percent premium to Beam’s closing share price of $66.97 on Friday. Beam shares jumped 24 percent to $83.27 on Monday.

The price is more than 20 times Beam’s earnings before interest, tax, depreciation and amortization (EBITDA), a multiple that comes close to the record 20.8 times EBITDA Pernod Ricard paid in 2008 for the maker of Absolut vodka.

 …

Suntory and Beam already have a business relationship under which Suntory distributes Beam products in Japan and Beam distributes Suntory’s products in Singapore and other Asian markets.

(click here to continue reading Beam Inc. being bought by Suntory – chicagotribune.com.)

Maybe now Maker’s Mark will stop trying to futz with their alcohol content to sell more product of a lesser quality…

remember this?

Maker's Mark - a collectors edition?
Maker’s Mark – a collectors edition?

90 Proof Whisky without an E a thing of the past?

my.chicagotribune.com/#section/-1/article/p2p-74379067/

Maker’s Mark announced it is reducing the amount of alcohol in the spirit to keep pace with rapidly increasing consumer demand.

In an email to its fans, representatives of the brand said the entire bourbon category is “exploding” and demand for Maker’s Mark is growing even faster. Some customers have even reported empty shelves in their local stores, it said.

After looking at “all possible solutions,” the total alcohol by volume of Maker’s Mark is being reduced by 3 percent. Representatives said the change will allow it to maintain the same taste while making sure there’s “enough Maker’s Mark to go around.” It’s working to expand its distillery and production capacity, too.

Bonus: via Lost in Translation

Senator Rockefeller Warns Marketing Data Giants: You’re On Notice

Seth Anderson0 comment

Video Flag Z by Nam June Paik
Video Flag Z by Nam June Paik

We’ve long been dismayed by how powerful and secretive the massive data broker corporations have become. Our data is collected, often surreptitiously, then repackaged and sold to other corporations, and we don’t get a percentage of the profits, nor any real notice that this is happening.

Good news, maybe, from Washington, as reported by Kate Kaye of AdAge:

Today the Senate Commerce Committee held a long-awaited hearing about the consumer-data-broker industry.

“We have a feeling people are getting scammed or screwed,” said Senator Jay Rockefeller, D-W.V., whose office sent inquiries to several data brokers in the past year. He called out data giants Acxiom, Epsilon and Experian, threatening to use more forceful ways of getting them to divulge information about how they do business and with whom.

One concern shared by Mr. Rockefeller and privacy advocates is predatory marketing activity conducted by financial firms or other companies targeting vulnerable groups such as the impoverished or immigrant populations. Another concern is the practice of scoring individuals determined by algorithmic data analysis and serving them with tailored offers. In some cases that could involve higher interest rates for loans or dynamic prices for products based on prior web behavior or demographic data.

“To date they have not given me complete answers,” said Mr. Rockefeller of Acxiom, Epsilon and Experian. “I’m putting these three companies on notice today…that I am considering further steps and I have steps I can use to get this information.”

…

Mr. Rockefeller sent letters to data companies such as Acxiom, Datalogix, Epsilon, Experian and Transunion in June, then broadened the inquiry to include media firms — typically big collectors of behavioral web data — like About.com, Babycenter.com, Cafemom.com, Time’s Health.com and Conde Nast’s Self.com.

 

(click here to continue reading Rockefeller to Marketing Data Giants: You’re On Notice | Privacy and Regulation – Advertising Age.)

Bares paying attention to…

ADM to move headquarters to Chicago after all, sans tax break

Seth Anderson0 comment

I Am A Lonely Visitor
I Am A Lonely Visitor

We’ve been following this story for a while, so an update from Phil Rosenthal and Ray Long:

Archer Daniels Midland, unable to secure the special tax incentives it sought from Illinois legislators, nonetheless announced Wednesday that it will go forward with its plan to move its world headquarters to Chicago from Decatur, Ill.

The agriculture giant said it plans to locate 50 to 75 executives in Chicago to a site that has not yet been selected. That’s down from the 100 jobs the company originally cited in its bid to win Springfield approval for special payroll tax incentives worth up to $30 million over 20 years.

“While we considered other global hubs, Chicago emerged as the best location to provide efficient access to global markets while maintaining our close connections with U.S. farmers, customers and operations,” said ADM Chairman and CEO Patricia Woertz said in a statement Wednesday morning. “Chicago also provides an environment where we can attract and retain employees with diverse skills, and where their family members can find ample career opportunities.”

…

The politicians who opposed a cash-strapped state giving a $1.5 million annual tax break to a company with a market cap of more than $27 billion can claim they held their ground. But absent the incentives package, ADM would not have to make assurances about ongoing staffing levels.

(click here to continue reading ADM to move headquarters to Chicago – chicagotribune.com.)

Like I said before, talented executives want to live in a place that’s interesting, in a city that has culture, restaurants, and so on. If free money is offered, of course corporations are going to take it, but without it? They would still rather live somewhere where nightlife consists of more than just Wednesday night bingo.

Your Allusion Was Too Subtle
Your Allusion Was Too Subtle

It appears that ADM has a robust enough business that they don’t need corporate welfare to stay in business after all, in contrast to the barely above-water Office Depot/OfficeMax corporation, which decided to keep its HQ in Florida. 

Office Depot said Tuesday it has chosen Boca Raton, Fla. for its new headquarters over Naperville.

Office Depot completed its merger with Naperville-based OfficeMax last month, but the pair hadn’t yet announced where the combined company would be based.

The companies asked for tax breaks from both states. Illinois lawmakers adjourned last week before making a decision.

(click here to continue reading Office Depot picks Florida over Illinois for new headquarters – Chicago Tribune.)

A cynic might note that Office Depot was the purchaser of OfficeMax, and Office Depot’s HQ was already located in Florida, thus any discussion of moving to Illinois was mostly about leverage to shake down the State of Florida for tax breaks. Also, for what its worth, Florida doesn’t have a state income tax, a fact overpaid executives are probably well aware of.

One last point, ADM might have negotiated a back-room deal with Illinois politicians – the tax incentives might miraculously show up during next year’s legislative session, we’ll have to continue to pay attention.

No You Cannot Have My Photo for basically Free Either

Seth Anderson0 comment

Today’s edition of NYCHMPFF1 is brought to you by indignant potential clients who want to spend less, much less, and resent being told their offered price is too cheap.

After being told that no, I would not give him my high resolution Photoshop file for him to print at his own printer for less than a cost of print, I received this rather snide email (partially redacted to protect the guilty)

Second, I am not looking to use your work in a mass produced publication. Before I could explain that the piece would be hung in my private residence, printed once by in archival pigment [you] started dropping numbers… I constantly have people complimenting me on the pieces displayed in my Chicago residence, and my girlfriend and mother happen to be interior designers. Best of luck to you in the future.

Taking advantage of Tim Kreider’s phrasing, as mentioned here, I responded, in part:

Sorry for any misunderstanding. I was under the impression you wanted to purchase a print. If you wish to use my digital file and your own print service, I’d have to involve my attorney to ensure my copyright being maintained, and that would make the price triple, at the very least. I’m not comfortable with the liability involved with this. 

Thanks very much for your compliments on my photography. I’m flattered by your invitation to be displayed in your house. But photography is work, it takes time, and in this economy I can’t afford to do it for a couple of nickels in my cup and a pat on my head. I’m sorry to decline, but thanks again, sincerely, for your kind words about my work.

Drink Your Big Champagne and Laugh
Drink Your Big Champagne and Laugh

I could have continued, but didn’t, “Do you get mad at your electric bill and demand to pay one twentieth of the cost of your service because you know some electricians? I am not Filene’s Basement For Photography” 

Footnotes:
  1. No You Cannot Have My Photograph For Free [↩]

Ayn Rand-loving CEO destroys his empire

Seth Anderson0 comment

Who Is John Galt?
Who Is John Galt?

This really made me giggle, though I feel sorry for the employees of Lampert’s companies…

Once upon a time, hedge fund manager Eddie Lampert was living a Wall Street fairy tale. His fairy godmother was Ayn Rand, the dashing diva of free-market ideology whose quirky economic notions would transform him into a glamorous business hero.

For a while, it seemed to work like a charm. Pundits called him the “Steve Jobs of the investment world.” The new Warren Buffett. By 2006 he was flying high, the richest man in Connecticut, managing over $15 billion thorough his hedge fund, ESL Investments.

Stoked by his Wall Street success, Lampert plunged headlong into the retail world. Undaunted by his lack of industry experience and hailed a genius, Lampert boldly pushed to merge Kmart and Sears with a layoff and cost-cutting strategy that would, he promised, send profits into the stratosphere. Meanwhile the hotshot threw cash around like an oil sheikh, buying a $40 million pad in Florida’s Biscayne Bay, a record even for that star-studded county.

Fast-forward to 2013: The fairy tale has become a nightmare.

Lampert is now known as one of the worst CEOs in America — the man who flushed Sears down the toilet with his demented management style and harebrained approach to retail. Sears stock is tanking. His hedge fun is down 40 percent, and the business press has turned from praising Lampert’s genius towatching gleefully as his ship sinks. Investors are running from “Crazy Eddie” like the plague.

That’s what happens when Ayn Rand is the basis for your business plan.

(click here to continue reading Ayn Rand-loving CEO destroys his empire – Salon.com.)

Turns out Ayn Rand is as good of a real-world economic strategist as she is a writer of fecund, pithy prose. In other words, horrible. No wonder she ended up on welfare…

Which End Has the Pot of Gold?
Which End Has the Pot of Gold?

For instance:

Plagued by the realities threatening many retail stores, Sears also faces a unique problem: Lampert. Many of its troubles can be traced to an organizational model the chairman implemented five years ago, an idea he has said will save the company. Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. (Many declined to go on the record for a variety of reasons, including fear of angering Lampert.) Shaunak Dave, a former executive who left in 2012 and is now at sports marketing agency Revolution, says the model created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

(click here to continue reading At Sears, Eddie Lampert’s Warring Divisions Model Adds to the Troubles – Businessweek.)

More Spare Change
More Spare Change

and because this should get repeated more often – hedge fund managers are not necessarily the geniuses they think they are:

But the epic incompetence of guys like Lampert may be dispelling the myth that financiers are the smartest guys in the room. Research suggests that not only do hedge fund managers typically understand squat about running a company, they’re often not much good at beating the stock market, either. A recent Bloomberg article points out that in 2013, hedge funds returned 7.1 percent. That doesn’t sound so bad, until you consider that if you had just stuck your money in the Standard & Poor’s 500 Index you would have seen returns of 29.1 percent.

Companies Say Goodbye to the Dead Zones of the Suburbs

Seth Anderson0 comment

Deeper Than Your Heart Allows
Deeper Than Your Heart Allows

I’ve long suspected this to be true:

When Motorola Mobility lined up a Silicon Valley candidate a few months ago for a VP-level role, the phone maker was hopeful he’d accept. After all, the company offered the chance to develop products at a subsidiary of Google Inc. 

The engineer declined. His reason: the prospect of relocating to Libertyville, Ill., about 35 miles from downtown Chicago, said Scott Sullivan, Motorola’s head of human resources.

Mr. Sullivan expects recruiting to get a lot easier next February when the company moves into a new space in the storied Merchandise Mart building in downtown Chicago.

Motorola will join United Continental Holdings Inc., Hillshire Brands Co. —the successor to Sara Lee Corp.— and other corporate giants abandoning vast suburban campuses for urban offices nearer to the young, educated and hyper-connected workers who will lead their businesses into the digital age. Archer Daniels Midland Co. recently said it would move its headquarters from Decatur, Ill., and in the Bay Area, startups like Pinterest Inc. are departing Silicon Valley for San Francisco.

After decades of big businesses leaving the city for the suburbs, U.S. firms have begun a new era of corporate urbanism. Nearly 200 Fortune 500 companies are currently headquartered in the top 50 cities. Many others are staying put in the suburbs but opening high-profile satellite offices in nearby cities, sometimes aided by tax breaks and a recession that tempered downtown rents. And upstart companies are following suit, according to urban planners. The bottom line: companies are under pressure to establish an urban presence that projects an image of dynamism and innovation.

(click here to continue reading Companies Say Goodbye to the ‘Burbs – WSJ.com.)

Apollo Visits the New Google HQ
Apollo Visits the New Google HQ

which makes it more puzzling why governments (state, city both) dangle tax breaks to encourage corporations to relocate. The truth is the executives much rather would live in vibrant cities, not B.F.E. rural Alabama for the most part. The employees would rather live in a place that is fun to live in, a place with culture, award-winning restaurants, recreation, and even sports teams. As a totally random example, Sinead O’Connor came through Chicago, playing for a few days at the City Winery. Do you think she’s playing in Gulfport, Mississippi? Or Decatur, IL? So why does ADM, for instance, stamp its feet for a tax break from a state that’s already operating at a deficit? Happily, the Illinois House adjourned before granting payola graft to ADM, though the IL Senate passed their version of this travesty, right before cutting pensions for teachers.

Two bills that would grant special tax breaks for three companies have stalled until state lawmakers return here in the spring. The bills, aimed at allowing Archer Daniels Midland, Office Depot, and Univar to retain withholding taxes that would go to the state, passed the Senate during a one-day special session Tuesday. But the House adjourned, stalling the bills.

All three companies have said they are considering proposals from other states.

“We appreciate the support of the senators who voted for the bill, especially the leadership of Sen. (Andy) Manar. Given that the House did not act, we will review our options. We expect to make an announcement soon,” Jackie Anderson, an ADM spokeswoman, said in a statement.

…Office Depot and Univar declined to comment.

Had the bills been approved, the incentives would have cost the state an estimated $88 million.

…

Unions, which opposed the plan to deal with worker pensions, criticized the incentives bills.

“At a time when Illinois is a chronic deadbeat and critical resources such as education, public safety and healthcare remain woefully under-funded, our elected representatives today voted to sink the state further into red ink by absolving some of its richest corporations from paying their fair share in taxes,” Keith Kelleher, president of SEIU Healthcare Illinois, Indiana, Missouri and Kansas, said in a statement.

Office Depot, chemical distributor Univar and agriculture giant ADM are among at least a half-dozen companies seeking special state legislation to keep their employees’ tax withholdings instead of forwarding them to the state. The companies want the special breaks because they have years in which they have little or no state corporate tax liability and can’t take advantage of state tax breaks awarded to spur economic development.

 

(click here to continue reading Tax breaks for Office Depot, Univar inch closer to approval – chicagotribune.com.)

Yeah, I’d rather Office Depot and A.D.M. have strong enough businesses that they could survive without resorting to corporate welfare…

Amazon Affiliate Program Back in IL

Seth Anderson0 comment

http://farm6.staticflickr.com/5545/11213398444_0b931224a3_z.jpg
Amazon dot com box

We’ve written about the Amazon Affiliate program in Illinois on a few previous occasions. Today I received this email:

Hello,

We’re pleased to announce that the Amazon Associates program is again open to residents of the State of Illinois. We’re now able to re-open the program because the Illinois State Supreme Court recently struck down legislation that had forced Amazon to close the program to residents of Illinois. Amazon strongly supports federal legislation like the Marketplace Fairness Act that’s now pending before Congress, which is the only constitutional way to resolve interstate sales tax collection issues.

Residents of Illinois who would like to participate in the Amazon Associates program can submit an application here:

http://affiliate-program.amazon.com/gp/associates/apply/main.html

Thanks for your past participation in the Amazon Associates program. We hope to see you again soon.

Well that was a big circle around the campfire…